Wis.LIRC ER Decision: Currie - June 16, 1995 - Proof, standards and burdens - burden on respondent when prima facie case made is burden of production, rather than persuasion - respondent's asserted reasons shown to be pretext

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

DENISE CURRIE, Complainant

BETTY MEINHARDT, Complainant

LINDA SORENSON, Complainant

GARROW OIL CORPORATION, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 9203731, EEOC Case No. 26G930142
ERD Case No. 9203732, EEOC Case No. 26G930143
ERD Case No. 9203734, EEOC Case No. 26G930144

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Industry, Labor and Human Relations 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.

DECISION

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

Dated and mailed June 16, 1995
currideo.rsd : 164 : 9

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

James R. Meier, Commissioner

MEMORANDUM OPINION

In the petition for commission review the complainants' attorney argues that, once the complainants established a prima facie case of discrimination, the burden of persuasion should have shifted to the respondent to establish that the adverse employment action taken by the respondent was not discriminatory. The complainants' attorney bases this argument on the Wisconsin Rules of Evidence as they pertain to presumptions, wherein, once a party has established certain facts that are prima facie evidence of other facts, the burden of proving the nonexistence of the presumed facts is shifted to the party against whom the presumption is directed. Section 903.01, Wis. Stats. The complainants aver that reliance on this portion of the Wisconsin Rules of Evidence is consistent with the United States Supreme Court's reliance on subsection 301 of the Federal Rules of Evidence in determining that, under federal employment discrimination law, the establishment of a prima facie case shifts only the burden of production to the opposing party. See St. Mary's Honor Center v. Hicks, 113 S.C. 2742, 62 FEP Cases 96 (1993). In support of their argument the complainants point out that the North Dakota Supreme Court recently applied the North Dakota Rules of Evidence, which contain a rule on presumptions virtually identical to the Wisconsin rule, to an employment discrimination case arising under the North Dakota Human Rights Act and concluded that, once the plaintiff establishes a presumption of discrimination, the burden of persuasion is shifted to the defendant. Schweigert v. Provident Life Insurance Co., ND S. Ct. , 503 N.W.2d 225, 62 FEP Cases 443, 446 (1993). The complainants further observe that the Third Circuit Court of Appeals recently decided to apply Hicks to discrimination cases arising under New Jersey law, on the grounds that the evidentiary rule in New Jersey tracked the federal rule. McKenna v. Pacific Rail Service, F. 2d , 65 FEP Cases 961 (3rd Cir. 1994).

The complainants' argument was recently considered and rejected by the commission in Franklin v. The Foxboro Company (LIRC, November 16, 1994). In Franklin, the commission reviewed established Wisconsin case law on the subject and held that, pursuant to such case law, the burden of proving discrimination rests squarely upon the complainant, even after the prima facie case has been established. For example, in Puetz Motor Sales, Inc. v. LIRC, 126 Wis. 2d 168, 376 N.W.2d 732 (Ct. App. 1985), an age discrimination case arising under the Wisconsin Fair Employment Act, the court of appeals adopted the same allocation of burdens as that utilized by the federal courts in deciding federal employment discrimination cases. The court stated in relevant part:

"McDonnell Douglas requires the complaining party to establish a prima facie case, which then raises a presumption of discrimination. To rebut the presumption, the defendant need only articulate a legitimate, nondiscriminatory reason for the action taken. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 254 (1981). The complainant then must be given the opportunity to prove that the proffered reason is merely a pretext for discrimination. McDonnell Douglas, 411 U.S. at 803, 805; see also Hamilton v. DILHR, 9 Wis. 2d 611, 619, 288 N.W.2d 856, 860-61 (1980). In age discrimination cases, the ultimate burden of persuading the trier of fact that age was a determining factor rather than merely a factor remains at all times with the plaintiff. La Montagne v. American Convenience Products, Inc., 750 F.2d 1405, 1409 (7th Cir. 1984)."

Puetz, at 126 Wis. 2d 168, 172.

The complainants suggest that Puetz is not persuasive with respect to the burdens of proof because in that case neither party called to the court's attention the difference between the effect of a presumption under the Federal Rules of Evidence and under the Wisconsin Rules of Evidence. This argument was also addressed by the commission in the Franklin case, supra. The commission noted that Puetz, as cited above, shows that the court of appeals relied on Texas Dept. of Community Affairs v. Burdine, supra, wherein the Supreme Court specifically noted that the employer's burden was one of production as governed by Federal Rule 301, and that Burdine stated at footnote 8:

"This evidentiary relationship between the presumption created by a prima facie case and the consequential burden of production placed on the defendant is a traditional feature of the common law. "The word `presumption' properly used refers only to a device for allocating the production burden." F. James G. Hazard, Civil Procedure s.7.9, at 255 (2d ed. 1977) (footnote omitted). See Fed. Rule Evid. 301." (emphasis added).

It is, therefore, apparent that the court of appeals was cognizant of the rules of evidence in arriving at its decision in Puetz.

For the reasons set forth above, the commission concludes that the respondent's burden in a case arising under the Wisconsin Fair Employment Act is one of production, rather than persuasion, and that it is for the complainants to establish by a preponderance of the evidence that the respondent's actions were based upon prohibited factors.

The complainants also argue that, because the respondent's witnesses testified that complainants Currie and Meinhardt quit their employment when, in fact, they were discharged, those complainants succeeded in establishing that they were discharged because of their sex. In support of this argument, the complainants cite to prior commission decisions which indicate that when a respondent fails to rebut the complainant's prima facie case by presenting a legitimate nondiscriminatory reason for its actions, the complainant will prevail on the basis of the prima facie case. Ray v. Ramada Inn-Sands West (LIRC, March 5, 1991), Jorgensen v. Ferrellgas, Inc. (LIRC, January 10, 1992). However, while it is true that a respondent's failure to rebut a prima facie case of discrimination will permit the trier of fact to infer that prohibited discrimination occurred, the complainant is not entitled to a judgment as a matter of law simply because she proves a prima facie case and shows that the respondent's proffered reasons for its actions are false. Anderson. v. Baxter Healthcare Corp., 13 F.3d 1120, 63 FEP Cases 1016 (7th Cir. 1994). Where there is evidence that the respondent's actions were taken for a non-discriminatory reason, and where it was not demonstrated that it is more likely that a discriminatory reason motivated the respondent, the commission will conclude that the complainants failed to prove discrimination. Duarte-Vestar v. Goodwill Industries (LIRC, November 9, 1990). Even where a respondent's articulated reason is disbelieved, the trier of fact cannot ignore other evidence which shows that the respondent's real reason was nonetheless one that did not violate the Act. Von Neumann v. West Bend Co. (LIRC, March 30, 1992).

While in Ray, supra, the record was devoid of any evidence to establish a nondiscriminatory reason for the complainant's discharge, in this case the record contains sufficient evidence to permit a conclusion that the complainants were discharged for nondiscriminatory reasons. In the respondent's written position statements, which were placed in the record by the complainants, the respondent explained that the complainants were discharged due to the problem with inventory "shrinkage." Complainants Sorenson and Meinhardt both testified that shrinkage was a significant problem at the Friendship store and complainant Sorenson expressly acknowledged that the respondent had a basis to terminate her as a result. Sorenson further testified that Daniel Davis, the respondent's operations manager and the individual who made the termination decision, suggested to her that she had made a mistake in hiring her friends because they were likely to steal from her. From this the commission infers that all three of the complainants were discharged, at least in part, because of the inventory shrinkage problem. Finally, although no discharge report was prepared for complainant Meinhardt, the discharge report for complainant Currie specifically indicates that inventory shrinkage played a role in the respondent's decision to terminate her employment.

The complainants then argue that the respondent would not have denied discharging them if it had a lawful reason for doing so and that the respondent's efforts to conceal the discharges should have led the administrative law judge to infer that no lawful reason existed. While the respondent's failure to offer credible testimony regarding its reasons for discharging Currie and Meinhardt is troubling, the commission is nonetheless convinced that the record does not support a finding that the complainants were discharged because of their age or sex.

The complainants also note that, although the respondent introduced documents to show that complainant Sorenson's store had inventory problems, it produced no comparative evidence to show that these problems exceeded inventory problems at other stores. The complainants argue that the respondent's failure to introduce such evidence creates the inference that the evidence, had it been introduced, would have supported the complainants' position. Again, the complainants misconstrue the burdens of proof in this matter. A respondent is not obliged to prove that it did not discriminate; rather, a complainant bears the burden of proving that discrimination did occur. Duarte-Vestar, supra. The complainants had access to discovery throughout these proceedings and could have obtained the evidence in question through the use of interrogatories or depositions. Lacking such evidence, the commission sees no basis for concluding that male managers with similar inventory shrinkage problems were retained.

Finally, the complainants point out that their witness, Joan Heim, a former manager of one of the respondent's stores, testified that Daniel Davis told her he thought men made better managers. The complainants assert that this statement is supported by statistical evidence of Davis' hiring practices and constitutes direct evidence of discriminatory motive. However, even presuming the commission were to credit Ms. Heim's testimony that Davis made the statement in question, discriminatory attitudes are not unlawful unless they actually result in discriminatory treatment. Schiller v. City of Menasha Police Dept. (LIRC, January 14, 1993). Here, the record indicates that Davis' selection of store managers was not limited to males and that he retained a number of female store managers, including Ms. Heim. More importantly, the evidence established that the respondent had a nondiscriminatory reason for its decision to discharge the complainants.

cc: John S. Williamson, Jr.
Joel A. Seymour

Appealed to Circuit Court. Affirmed May 6, 1996. Appealed to Court of Appeals; affirmed sub nom. Currie et al. v. DILHR Equal Rights Division, 210 Wis. 2d 380, 565 N.W.2d 253 (Ct. App. 1997).

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