LOUIS E OERTEL, Complainant

K & A MANUFACTURING COMPANY, Respondent

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission 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. In paragraph 10 of the ALJ's FINDINGS OF FACT, change "choise" to "choice".

2. Delete the ALJ's MEMORANDUM OPINION.

The decision of the administrative law judge (copy attached), as modified, is affirmed.

Dated and mailed June 16, 2014

oertelo_rmd . doc : 107 :

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

/s/ C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner

Standard of review for exclusion of evidence

Generally, evidence is permitted in a rebuttal case(1) only if it is responsive to new facts put in evidence by the respondent in its case, but this rule is flexible, and an exception is made when admission of the proposed evidence is necessary to achieve justice. Rausch v. Buisse, 33 Wis.2d 154, 167, 146 N.W.2d 801 (1966).(2) When that is claimed, the reviewing tribunal looks to whether the evidence was so crucial that a refusal to admit the evidence would be an abuse of discretion by the trier of fact. Id.; Pophal v. Siverhus, 168 Wis.2d 533, 555, 484 N.W.2d 535 (Ct. App. 1991).

Consistent with this, the commission examines a ruling excluding evidence on the basis of whether it was a reasonable exercise of discretion. Williams v. Salvation Army, ERD Case No. 200501162 (LIRC Oct. 19, 2007). An erroneous exclusion of evidence would require reversal only if it was prejudicial, in the sense that there was a reasonable probability that it contributed to the outcome of the proceeding. Obasi v. Milwaukee School of Engineering, ERD Case No. CR201003882 (LIRC Oct. 14, 2013) (citing Martindale v. Ripp, 2001 WI 113,  30, 246 Wis.2d 67, 629 N.W.2d 698).

Proposed evidence was not rebuttal in nature

Course of proceedings

In his case-in-chief, the complainant pursued both the direct and indirect methods of proof. Under the indirect method, established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), and adopted by Wisconsin in Puetz Motor Sales v. LIRC, 126 Wis.2d 168, 376 N.W.2d 372 (Ct. App. 1985), the complainant's prima facie case consisted of showing that he was forty or older; was discharged; was qualified for the job; and was treated less favorably than others not in the protected class. During the complainant's case-in-chief, the complainant acknowledged that the owner told him at the time of discharge that he was being laid off because there was not much work in the assembly department at the time. Lack of work, then, emerged during the complainant's case as the respondent's proffered non-discriminatory reason for discharge. The effect of this was that it no longer mattered whether the complainant had made a prima facie case under the indirect method of proof; the complainant had the burden to show the non-discriminatory reason to be a pretext for discrimination. Binversie v. Manitowoc Tool & Manufacturing, Inc., ERD Case No. CR200901810 (LIRC Mar. 28, 2013).

Under the direct method of proof, the complainant's case consisted of showing that he was protected under the act, that he suffered an adverse action, and that a causal connection existed between the two. Hanners v. Trent, 674 F.3d 683 (7th Cir. 2012). A plaintiff proceeding under the direct method may rely on direct evidence or circumstantial evidence. Id. Direct evidence is evidence that amounts to an admission by the decision-maker that his actions were based on prohibited animus. No such evidence was presented in the case at hand. Circumstantial evidence "consists of suspicious timing, ambiguous statements oral or written, behavior toward or comments directed at other employees in the protected group, and other bits and pieces from which an inference of discriminatory intent might be drawn." Troupe v. May Department Stores, 20 F.3d 734, 736 (7th Cir. 1994), cited in Gunty v. City of Waukesha, ERD Case No. 200401540 (LIRC Mar. 31, 2010). The bits and pieces of circumstantial evidence presented by the complainant in his case-in-chief included testimony about negative, age-related comments made by two managers, Mike Bauer and Dean Kolbeck.

The complainant called Victoria Knighton, the respondent's vice president, and Bill Knighton, the respondent's president and owner, as adverse witnesses during the complainant's case-in-chief. Victoria Knighton testified that business was declining in the assembly department at the time of the complainant's layoff, and that Bill Knighton made the final decisions regarding separations from employment, at times after he consulted with Kolbeck, the plant manager. She testified that she did not believe Bill Knighton ever consulted with Bauer, the plant supervisor, about termination decisions, but she did not have first-hand information about the decision to terminate the complainant's employment. The complainant's attorney did not ask Bill Knighton about his decision to terminate the complainant, and rested without presenting evidence that Kolbeck or Bauer had any influence on the decision to terminate the complainant's employment.

In the respondent's case, Bill Knighton testified that he made the decision by himself to terminate the complainant, and that he did so because of a slowdown in orders for assembly work. After the respondent rested, the complainant asked to call Bauer and Kolbeck in rebuttal, primarily to ask them what input they had in the termination decision. Based on having deposed Bauer and Kolbeck prior to hearing, the complainant believed he could show that Bauer "instigated" the discussion about permanently laying off the complainant. Through rebuttal, then, the complainant wanted to connect the alleged negative comments of Bauer and Kolbeck (and the presumed discriminatory animus that prompted them) to the termination decision. The ALJ denied the request, stating that the complainant had to have "set that up ahead of time," apparently reasoning that the complainant should have presented that evidence in his case-in-chief.(3)

Rebuttal evidence

The commission discussed the nature of rebuttal evidence at length in Vaisman v. Aldridge, Inc., ERD Case No. 8751142 (LIRC Oct. 21, 1991), and upheld an ALJ's exclusion of exhibits offered in rebuttal. The commission explained that the complainant should have anticipated having to put the exhibits in evidence because they were an integral part of her case, as opposed to rebutting the respondent's case:

In this case, Vaisman's theory of her case revolved around the premise that she was discharged and did not voluntarily terminate her employment. This premise involves accepting her assertion that she did not come to work after November 17 because she was not placed on the schedule, not because she voluntarily terminated her employment. As such, it would seem that the employer's work schedules for that period of time after she stopped coming to work would be an integral part of her case in attempting to establish that she was discharged and that the discharge was established by her absence from the work schedules, rather than that she had quit her employment. Consequently, there is no reasonable basis upon which to believe that Vaisman could not have anticipated prior to the hearing that she would need such work schedules to establish her assertion.

Id. This idea that the evidence in the complainant's rebuttal case cannot include evidence that is integral to the complainant's case-in-chief is consistent with Wisconsin case law. Brockman v. Wisconsin Power & Light Co., 197 Wis. 374, 222 N.W. 239 (Wis. 1928); Rausch v. Buisse, supra; McGown v. Chicago & N.W. Railway Co., supra. In Brockman, the testimony of the proposed rebuttal witness was essentially the same as the testimony of the witnesses offered by the plaintiff to prove negligence in his case-in-chief, and the court held it therefore should have been presented in his case-in-chief. The court referred to Wigmore's treatise on evidence to explain the problem with allowing an additional piece of the complainant's case to come in as rebuttal:

Practical disadvantages that would result from abandoning the natural order of evidence are, first, the possible unfairness to an opponent who has justly supposed that the case in chief was the entire case which he had to meet, and, secondly, the interminable confusion that would be created by an unending alternation of successive fragments of each case which could have been put in at once in the beginning.

Id. at 380.

Application to the present case

In his petition for review the complainant contends that under the burden shifting framework of McDonnell Douglas v. Green, because he presented a prima facie case he should have been allowed the opportunity to present evidence in rebuttal to the respondent's proffered non-discriminatory reason for discharging him. This contention is not sustained.

First, the complainant could have presented his rebuttal testimony from Bauer and Kolbeck during his case-in-chief, because the respondent's proffered non-discriminatory reason for discharge was in evidence before the complainant closed his case. More importantly, though, the complainant should have presented the testimony in his case-in chief, because it was an integral part of his case under the direct method of proof. Under the direct method of proof, it is part of the complainant's case to make a causal connection between the complainant's protected status and the employer's adverse action. The evidence that the complainant wanted to put on was that Bauer instigated the discussion about permanently laying off the complainant. By presenting evidence only of Bauer's and Kolbeck's negative age-related comments, the complainant only put in part of his evidence toward making that case. Evidence of a manager's bias, standing alone, does not prove that a discriminatory motive was responsible for a particular employment action. For instance, in Price Waterhouse v. Hopkins, 490 U.S. 228, 250 (1989), a sex discrimination case, the U.S. Supreme Court stated:

Remarks at work that are based on sex stereotypes do not inevitably prove that gender played a part in a particular employment decision. The plaintiff must show that the employer actually relied on her gender in making its decision.

See also Randle v. LaSalle, 876 F.2d 563, 569 (7th Cir. 1989) (direct evidence must speak not only to intent but also to the specific employment decision in question). If the complainant had evidence to present to form a causative link between the remarks of Bauer and Kolbeck and the decision to discharge the complainant, it was the responsibility of the complainant to present that as part of his case-in-chief.

Complainant failed to show that the proposed evidence was crucial

Under Rausch and Pophal, supra, a judge's refusal to admit evidence as not being rebuttal in nature would be an abuse of discretion if it was necessary to allow the evidence in order to achieve justice. Here, however, the complainant did not show that his proposed rebuttal evidence was so crucial that it would have been an abuse of discretion to refuse to admit it. The complainant's attorney alluded to deposition testimony of Kolbeck and Bauer, in which one or the other or both apparently admitted that Bauer initiated a discussion with the owner about laying off the complainant, but the attorney did not, in her offer of proof or in her argument to the commission, provide the actual deposition testimony on which the complainant relied, making it impossible to determine how crucial that testimony might have been. In addition, regardless of who might have initiated the discussion, the complainant's offer of proof did not challenge the respondent's evidence that the owner was the final decision-maker, and that he relied on his own prognostication about the need for employees in the assembly department, not on any advice from Kolbeck or Bauer. It does not appear that the proposed evidence was crucial in the sense that it would have changed the result in this case had it been allowed. The commission concludes that the ALJ's exclusion of the evidence in this case was not an abuse of discretion.

Whether the ALJ correctly found no discrimination

Even without the proposed rebuttal evidence the complainant argues that he has proven that he was discharged because of his age. The complainant bears the burden of proof to show that the respondent's reason for laying him off, that business was declining in the assembly department, was a pretext for age discrimination. Stern v. RF Technologies, ERD Case No. 200200780 (LIRC Feb. 6, 2004). If the respondent genuinely believed its asserted non-discriminatory reason to be true, even if it was mistaken, the respondent cannot have acted with discriminatory intent. Thobaben v. Waupaca Sheriff's Department, ERD Case No. CR200602483 (LIRC Dec. 23, 2011).

The complainant challenged the idea that business in the assembly department was actually declining at the time of the layoff, pointing to a graph of quarterly invoices of products coming from three departments, and to statements made by the respondent's owner printed in a magazine on January 9, 2012, to the effect that business was expanding. These do not show pretext. First, the graph, which was not available to the owner at the time of discharge, tracks invoices, whereas the owner based his prognostication on foreseeable orders, which did not necessarily match current invoices. Second, the graph is not really inconsistent with the owner's stated belief that business would decline in the assembly department, and increase in the furniture department. Although the graph shows a lot of volatility in the furniture department, it suggests a potential for growth. The graph does not appear to show a significant uptick in invoices from the assembly department at the time of the complainant's layoff, as the complainant argued, but instead shows a fairly steady decline in the assembly department over the six months before and after the complainant's discharge.(4) This is not inconsistent with the owner's testimony. As to the owner's comments published in a magazine article in January 2012, the owner attributed them to an increase in the furniture business, and there is nothing in the record to suggest that that was not true.

The complainant also argued that the respondent's retention of Derek Palesh, a young employee in the furniture department, showed age discrimination against the complainant. Palesh had been a temporary employee in the furniture department beginning in December 2010. In July 2011, about one month before laying off the complainant, the respondent gave Palesh a permanent position in the furniture department. The complainant had been cross-trained in the furniture department, and claimed to have been working 40-50% of his time in the furniture department. This was contested by the owner, who estimated that the complainant worked about 10% of his time in the furniture department. In any case, the owner testified that he never considered laying off Palesh, or anyone else who was not in the assembly department. Given that the complainant failed to show any insincerity in the owner's professed belief that business was declining in the assembly department and increasing in the furniture department, it is difficult to see the owner's failure to consider furniture department employees for layoff as evidence of age discrimination.

NOTE: Much of the debate between the parties on review before the commission had to do with a department rule that requires parties to give notice of proposed witnesses and exhibits to each other ten days prior to hearing, and includes a reference to rebuttal evidence. The rule states:

Exchange of names of witnesses and copies of exhibits. By no later than the tenth day prior to the day of hearing, the parties shall file with the division and serve upon all other parties a written list of the names of witnesses and copies of the exhibits that the parties intend to use at the hearing. For the purposes of this section, service is complete upon mailing rather than on receipt. 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 reasonably have anticipated using prior to hearing.

Wis. Admin. Code § DWD 218.17 (emphasis added).

This rule does not define rebuttal evidence, and does not permit or exclude any rebuttal evidence-it simply exempts a certain kind of rebuttal evidence from the 10-day disclosure rule, namely, rebuttal evidence that "the party could not reasonably have anticipated using prior to hearing." The import of the rule for the parties is that if, prior to hearing, a party learns of an exhibit or witness that he or she could reasonably anticipate presenting at hearing, even if the function of that evidence would be to rebut something that the opposing party is expected to present, then the party should disclose that witness or exhibit prior to hearing. The avoidance of surprise is the paramount purpose of the rule. Pohlen v. General Electric Company, ERD Case No. 8751496 (LIRC Apr. 18, 1991). Several times, the commission has upheld the exclusion of undisclosed rebuttal evidence on the ground that the party offering it could have reasonably anticipated using it prior to hearing. See Vaisman v. Aldridge, Inc., ERD Case No. 8751142 (LIRC Oct. 21, 1991); Gray v. Summit Place, ERD Case No. 200103598 (LIRC Apr. 30, 2004).

Here, though, the complainant did make a timely pre-hearing disclosure of the two witnesses he wanted to call in rebuttal (Bauer and Kolbeck). His disclosure did not list them by name; instead, it incorporated the respondent's list of witnesses by stating "[t]he Complainant reserves the right to call the witnesses disclosed by the Respondent in this case." The respondent put Bauer and Kolbeck on its list.(5) The respondent never argued that Bauer and Kolbeck were not disclosed as witnesses. In fact, respondent's counsel apparently had agreed to provide its witnesses for testimony without subpoena if called by the complainant. The respondent made no argument that it was unfairly surprised by the complainant's attempt to call Bauer and Kolbeck. Instead, the respondent's primary argument was that the two witnesses were properly excluded by the ALJ because the complainant could have reasonably anticipated using them prior to hearing.

The parties' arguments over Wis. Admin. Code § DWD 218.17 are misplaced. Since there is no dispute that the complainant timely disclosed Kolbeck and Bauer as potential witnesses under the disclosure rule, the complainant had no need to conform to the exemption from the disclosure rule. The real questions, as noted above, are whether the testimony that the complainant was seeking from Bauer and Kolbeck should properly be classified as rebuttal evidence, and even if it is not, whether it should nevertheless be admitted to achieve justice.

cc: Attorney Jenifer D. Binder
Attorney Shane J. VanderWaal

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(1)( Back ) Evidence that is rebuttal in nature may also be presented during a case-in-chief, so long as it is responsive to facts that come into evidence from the opposing party during the case. Vaisman v. Aldridge, Inc., ERD Case No. 8751142 (LIRC Oct. 21, 1991).

(2)( Back ) Citing McGown v. Chicago & N.W. Railway Co., 91 Wis. 147, 153-54, 64 N.W. 891 (1895) ("The plaintiff or party holding the affirmative must try his case out when he commences, and is bound to introduce all the evidence on his side, except that which operates merely to answer, avoid, or qualify the case as made out by his adversary's proof. At this alone the evidence in reply must be directed, but for sufficient reasons it may be found advisable to depart from the rule in order to attain justice. When this ought to be done must be left to the sound discretion of the court, and in general its action in this respect cannot be assigned as error.").

(3)( Back ) A secondary reason for the complainant's request to present rebuttal was to present evidence that Bauer discussed workload in the assembly department with the owner, that there was a perception that the slowdown in August 2011 was no different from slowdowns in the past, and that past slowdowns did not result in any permanent layoffs. In his petition to the commission, the complainant does not develop any argument that this testimony should be allowed in rebuttal. In addition, the contention that past slowdowns did not result in permanent layoffs seems to be incorrect. In 2009 another employee in the assembly department was permanently laid off for lack of work.

(4)( Back ) The blue line on the graph represents sales in the assembly department. (R. Ex. 10).

(5)( Back ) The respondent did a similar thing on its disclosure, listing a number of witnesses and then adding "[a]ny and all witnesses named or retained by any other party to this action or as discovery may disclose." This is a fairly common practice. 

uploaded 2014/08/08