RACINE EDUCATION ASSOCIATION, Complainant

RACINE UNIFIED SCHOOL DISTRICT, Respondent

On October 9, 1987, an administrative law judge (ALJ) for the Department of Industry, Labor and Human Relations issued a decision in the above-captioned matter concluding, that Acquired Immune Deficiency Syndrome (AIDS) and AIDS-Related Complex (ARC) are handicaps within the meaning of the Wisconsin Fair Employment Act, that the Complainant proved Respondent violated s. 111.322(2), Wis. Stats., by circulating an adopted policy statement (Policy 5151) which implied and expressed a limitation, specification or discrimination with respect to individuals handicapped with AIDS or ARC, and that Respondent had not proved that such policy was justified as an exception under s. 111.34(2)(b), Wis. Stats. The ALJ also concluded that Respondent violated s. 111.322(2) with respect to sexual orientation because it caused to be circulated a statement which implies and expresses a limitation, specification and discrimination regarding individuals who are homosexual or bi-sexual.

Subsequently, on August 19, 1988, the AL J issued a decision on the Complainant's and Respondent's petitions for attorney's fees and costs. The ALJ awarded Complainant attorney's fees in the amount of $105,957 (706.38 hours at an hourly rate of $100 per hour and enhanced by 50 percent for the risk of non- recovery), plus $11,820.58 for costs associated with bringing this case. The Respondent's petition for attorney's fees and costs was denied.

The Respondent filed timely petitions for Commission review of the ALJ's decision on the merits and her decision on the matter of attorney's fees. The Complainant has filed a timely cross-petition limited to certain portions of the ALJ's decision on the merits. Complainant has also filed a request for additional attorney's fees and costs associated with this case.

Based upon a review of the record in its entirety, the Labor and Industry Review Commission hereby issues the following:

That the decisions of the Administrative Law Judge (copies attached) are modified as follows:

1. In FINDING OF FACT number 14 of the ALJ's October 19, 1987 decision, the words "The initial draft" are deleted and the words "An early draft" are substituted therefor.

2. Paragraph number 2 of the CONCLUSIONS OF LAW AND ORDER in the ALJ's August 19, 1988 decision is deleted and the following paragraph substituted therefor:

"2. That the appropriate award of attorney's fees to the Complainant in this matter is $73,980. This reflects a combination of 693 hours of work at an hourly rate of $100 per hour for time spent litigating the merits before the ALJ and for the preparation of the petition for fees and costs, and an additional 46.80 hours of work at the same hourly rate for time spent briefing the fee issue before the ALJ and for briefing the various issues before the Commission."

3. Paragraph number 3 of the CONCLUSIONS OF LAW AND ORDER in the ALJ's August 19, 1988 decision is deleted and the following paragraph substituted therefor:

"3. That the total amount of costs associated with Complainant bringing this case is $11,916.08."

4. Finally, paragraph 3 of the ORDER in the ALJ's October 19, 1987 decision and paragraph. 5 of the CONCLUSIONS OF LAW AND ORDER in the ALJ's August 19, 1988 decision are deleted. The Respondent is now directed to submit to the Commission, within 30 days of the expiration of time within which an appeal may be taken herein, a compliance report detailing the specific action taken to comply with the relief ordered in this matter. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P. 0. Box 8126, Madison, Wisconsin 53708."

As modified, the decisions of the Administrative Law Judge shall stand as the FINAL ORDER herein.

Dated and mailed July 17, 1989

/s/ Kevin C. Potter, Chairman

/s/ Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

On appeal the Respondent first argues that no violation of s. 111.322(2), Wis. Stats., has occurred because that section was intended to curb discriminatory hiring and advertising practices, and that the legislative drafting file for the Wisconsin Fair Employment Act (WFEA) clearly indicates this legislative intent.

Section 111.322 of the Wisconsin Fair Employment Act provides in part as follows:

111.322 Discriminatory action prohibited. Subject to ss. 111.33 to 111.36, it is an act of employment discrimination to do any of the following:

(1) To refuse to hire, employ, admit or license any individual, to bar or terminate from employment or labor organization membership any individual, or to discriminate against any individual in promotion, compensation or in terms, conditions or privileges of employment or labor organization membership because of any basis enumerated in s. 111.321.

(2) To print or circulate or cause to be printed or circulated any statement, advertisement or publication, or to use any form of application for employment or to make any inquiry in connection with prospective employment, which implies or expresses any limitation, specification or discrimination with respect to an individual or any intent to make such limitation, specification or discrimination because of any basis enumerated in s. 111.321.

Section 111.321 provides in part as follows:

111.321 Prohibited bases of discrimination. Subject to ss. 111.33 to 111.36, no employer . . . may engage in any act of employment discrimination as specified in s. 111.322 against any individual on the basis of . . . handicap . . . sex . . .

The drafting file referred to by Respondent contains a memo from an attorney at the Legislative Reference Bureau describing revisions to the WFEA (1982). The memo states that a substitute amendment to the bill revising the Act takes the language and concepts from the definition of discrimination then existing and organizes them into three separate areas concerning: (1) the bases upon which discrimination is prohibited, such as race of sex; (2) the types of actions which may constitute discrimination, such as terms and conditions of employment, advertising for employment and retaliation against an employe because the employe has filed a discrimination claim; and (3) the exceptions and special cases applicable to a particular prohibited basis. The Respondent argues that because subsection (2), which outlines the types of actions which may constitute discrimination, is identical to the present substructure of s. 111.322, Stats., and because the "terms and conditions of employment" are discussed in s. 111.322(1), Stats., and "advertising for employment" is discussed in s. 111.322(2), it can only be concluded that s. 111.322(2) curbs only discriminatory advertising and hiring practices.

Further, the Respondent argues that the WFEA was modeled after Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(b) which makes it an unlawful employment practice for an employer to print or publish or cause to be printed or published any notice or advertisement relating to employment by such employer which indicates any preference, limitation, specification, or discrimination based on race, color, religion, sex or national origin (except in cases in which religion, sex, or national origin is a bona fide occupation qualification for employment). Respondent argues that the federal legislation was directed at discriminatory advertising and hiring practices, citing the following language from an "Interpretative Memorandum" prepared by Senators Clark and Case, the floor managers of the Civil Rights Act:

Section 705(b) prohibits discriminatory advertising by employers, employment agencies and labor organizations . . . It should be noted that the prohibition does not extend to newspapers or other publication printing the advertisement. It runs solely to the sponsoring firm or organization. (Respondent's brief at p. 18) (emphasis added by Respondent)

Additionally, citing several cases, the Respondent asserts that the federal courts have been called upon with regularity to interpret this statute and virtually every decision handed down by these courts has dealt with "discriminatory advertising in the hiring process." (emphasis in original.)

Neither the legislative drafting explanations regarding the revisions to the WFEA nor the assertions Respondent makes with respect to Title VII support the Respondent's construction of s. 111.322(2).

First, despite Respondent's reference to the drafting file on the WFEA revisions, it has cited no authority therein for the proposition that the intent of the Wisconsin Legislature was to limit the application of s. 111.322(2) only to hiring and advertising for prospective employes. Moreover, the plain language of s. 111.322(2) does not restrict the application of that section to prospective employes. Section 111.322(2) does two things. It prohibits the printing or circulating or causing to be printed or circulated any statement, advertisement or publication which implies or expresses any limitation, specification or discrimination with respect to an individual or any intent to make such limitation, specification or discrimination because of any basis enumerated in s. 111.321. It also prohibits the use of any form of application for employment or the making of any inquiry which implies or expresses any limitation, specification or discrimination with respect to an individual or any intent to make such limitation, specification or discrimination because of any basis enumerated in s. 111.321. Nowhere in this statute does it state or suggest that the printing or circulating clause prohibition applies only to the hiring of prospective employes, and not to the terms and conditions of employment of an employer's existing employes.

The Respondent's argument with respect to Title VII fares no better. A mere reading of the quoted portion of the "Interpretative Memorandum" prepared by Senators Clark and Case shows that it does not stand for the assertion made by Respondent. This memorandum simply says that the employers, employment agencies and labor organizations sponsoring the discriminatory advertising were to be held in violation of the federal law and not the newspapers or other publication which merely printed it. Further, while the Respondent cites extensive authority showing that federal courts have been regularly called upon to interpret the federal law and asserts that virtually every decision handed down by these courts has dealt with discriminatory advertising in the hiring process, the Respondent has not cited one single case for the proposition that the Title VII provision has been interpreted to apply only to the hiring of prospective employes.

The ALJ addressed the Respondent's contention regarding s. 111.322(2) at p. 33 of her Memorandum Opinion stating:

. . . Respondent contends that this provision was adopted with the intent to curb discriminatory hiring practices only. Respondent made the same argument in its motion to dismiss the complaint for failure to state a claim upon which relief may be granted. In ruling upon that Administrative Law Judge David Nance stated:

Finally, I believe that sec. 111.322(2), Stats., prohibiting the printing or circulation of statements expressing an intention to discrimination in the future, is fully applicable here. I think it is an unreasonably narrow construction, inconsistent with the direction that the Act be liberally construed for the accomplishment of its purposes, sec. 111.31(3), Stats., to argue that sec. 111.322(2), Stats., only prohibits announcing plans to discriminate in hire, while not prohibiting announcement of plans to discriminate in other ways. Under such a construction an employer could adopt and promulgate a policy that all newly-hired Black employees would be terminated immediately upon employment, and such a policy expression could not be enjoined. This is, simply put, ridiculous. Sec. 111.322(2), Stats., clearly is broad enough to cover, generally the publication or promulgation of plans to engage in discrimination.

Extending Judge Nance's analogy further, suppose that a School Board enacted and published the following policy:

Students or District staff members who are black are excluded from regular school attendance or attendance at work. Black students will be placed in alternative education settings such as home tuitoring (sic) or other appropriate education programs. Black District employees will be placed on leave until a determination can be made about a further work assignment.

Even if the District never carried out its threat of discriminatory action, the very fact that such a statement had been made would affect both prospective employees of the District and current employees of the District. Such a threat of discrimination would be fully actionable under Sec. 111.322(2), Stats.

Further, as noted by the Complainant the Act is designed to apply to both prospective employes and employes and the intent of the Legislature in passing s. 111.322(2), Stats., is clearly stated in the WFEA itself. Specifically, Complainant correctly notes that as stated in s. 111.31 -- the Act's declaration of policy: (1)"...It is the intent of the legislature in promulgating this subchapter to encourage employers to evaluate an employe or applicant for employment based upon the employe's or applicant's individual qualifications rather than upon a particular class to which the individual may belong (s. 111.31(2));" and (2) "In the interpretation and application of this subchapter, and otherwise, it is declared to be the public policy of the state to encourage and foster to the fullest extent practicable the employment of all properly qualified individuals ... This subchapter shall be liberally construed for the accomplishment of this purpose." (s. 111.31(3))

Next, the Respondent continues to argue that s. 111.322(2) requires an element of volition on the part of the employer and that the complainant has failed to prove that the District caused the policy to be printed in violation of the statute asserting that (1) the local newspaper unilaterally decided to print the policy as a part of its news coverage, a decision in which the District was not involved, and further; (2) that state law (s. 120.11(4), Stats.) required that to minutes of the school board meeting be published in the local newspaper. However, as noted by the ALJ at p. 34 of her Memorandum Opinion, while Policy 5151 was published pursuant to statutory duty, "the Board (was) aware that every time it formally adopts a policy, the policy will be printed and circulated. . . . In adopting Policy 5151, Respondent not only caused the policy to be printed and circulated, but must have intended that it be printed and circulated as a foreseeable and inevitable consequence of the Board's action."

The Respondent argues, however, that what the ALJ failed to consider is that even if Policy 5151 had been considered and defeated by the school board, it still would have been printed in accordance with s. 120.11(4), Stats., and the District could hardly be considered to be in violation of the WFEA for "considering and rejecting a 'discriminatory' policy." However, as noted by the Complainant, this is correct but misses the point. The Board of Education in adopting Policy 5151 stated an intent to discriminate. If instead the Board had rejected the policy, the minutes subsequently published would have constituted a statement of intent not to discriminate.

Secondly, arguing alternatively, the Respondent asserts that it established by a fair preponderance of the evidence that Policy 5151 constitutes an exception to the prohibition against handicap discrimination under s. 111.34(2)(b) and s. 111.34(2)(c) because such policy is justified as a concern for the present and future safety of its employer and students. Section 111.34(2)(b) provides that:

(b) In evaluating whether a handicapped individual can adequately undertake the job-related responsibilities of a particular job, membership or licensed activity, the present and future safety of the individual, of the individual's coworkers and, if applicable, of the general public may be considered. However, this evaluation shall be made on an individual case-by-case basis and may not be made by a general rule which prohibits the employment or licensure of handicapped individuals in general or a particular class of handicapped individuals.

Section 111.34(2)(c) provides that:

(c) If the employment, membership or licensure involves a special duty of care for the safety of the general public, including but not limited to employment with a common carrier, this special duty of care may be considered in evaluating whether the employe or applicant can adequately undertake the job-related responsibilities of a particular job, membership or licensed activity. However, this evaluation shall be made on an individual case-by-case basis and may not be made by a general rule which prohibits the employment or licensure of handicapped individuals in general or a particular class of handicapped individuals.

In Bucyrus-Erie Co. v. DILHR, 90 Wis. 2d 408, 280 N.W.2d 142 (1979), a case involving an employer with an ordinary duty of care, the court held that in order to come under the "future safety" exception, the employer had the burden of establishing to a reasonable probability that the employe's handicap would pose a hazard to the health or safety of himself, others, or the public.

Under a line of cases which include Boynton Cab Co. v. DILHR, 96 Wis. 2d 396, N.W.2d 850 (1980) (involving a common carrier), and Samens v. LIRC, 117 Wis. 2d 646, 345 N.W.2d 432 (1984) (involving a company that produced and transmitted electricity), the Wisconsin Supreme Court has held that in cases involving an employer with a special duty of care the less restrictive reasonable possibility standard was appropriate for determining whether the employe's handicap would be hazardous to the health or safety of the employe, others, or the public. In Boynton Cab, the employer had an unwritten policy against hiring one-handed drivers which was largely based on federal safety regulations for motor carriers.

In Boynton, the court recognized that common carriers have a very different standard of care than do other institutions stating:

It is beyond dispute that Boynton is a common carrier, and as such owes a duty to its passengers to exercise the highest degree of care reasonably to be expected from human vigilance and foresight, in view of the conveyance adopted and consistent with the practical operation of the business." (citation omitted)

Boynton Cab, supra at 416. (emphasis added).

In Samens, the court stated:

. . . we hold that because of the nature of the groundsman's duties, involving work with a highly hazardous force, the teamlike efforts required of the groundsman, and the close proximity of the public, the common carrier standard is appropriate when reviewing WP&L's safety-based hiring standards relating to this particular position. We believe that extending this lesser standard is commensurate with the high degree of care imposed upon WP&L as an electric company and recognized by this court.

It is also elementary that "electricity is a power and subtle force. Electric wires are highly dangerous agencies, and it is well settled that companies generating and transmitting electricity over their wires are required to exercise a high degree of care and caution in order to prevent injury." Reiland v. Wisconsin Valley Electric Co., 202 Wis. 499, 503-04, 233 N.W. 91 (1930), citing Ottman v. Wisconsin- Michigan Power Co., 199 Wis. 4, 6, 255 N.W. 179 (1929). See also, Dansbery v. Northern States Power Co., 199 Wis. 586.

Samens, supra, at 671-672. (emphasis added.)

In support of its argument under s. 111.34(2)(c), the Respondent cites s. 143.12, Stats. (see below), and asserts that it has a special duty of care to its employes and the public and that this special duty of care has not been disputed in these proceedings. Both of these assertions are inaccurate. The question of whether the reasonable probability standard or reasonable possibility standard was applicable was in dispute before the ALJ and she resolved the matter at p. 46 of her Memorandum Opinion stating:

Respondent contends that it has a special duty of care for the safety of its students. In support of this, it introduced into evidence various statutes and regulations governing such things as school lunches, school busses, student immunizations, smoking on school premises, etc. However, Respondent is not a common carrier. It's (sic) employees' responsibilities do not involve control over hazardous instrumentalities. The common law duty of a school teacher is to use "reasonable care" in the supervision of pupils. Larry vs. Commercial Union Ins. Co., 88 Wis. 2d 728, 738, 277 N.W.2d 821 (1979). A school district owes only a duty of ordinary care to the public and its employees. The applicable standard of proof, therefore, is whether the employer can prove to a reasonable probability that the employment of an AIDS/ARC afflicted teacher would be hazardous to the health or safety of that teacher, the teacher's co-employees, students or the public in general.

The Respondent could not be further from the analysis required by Boynton Cab and Samens. A school teacher's duties include writing, reading, speaking and thinking. If a school teacher had a lapse due to handicap, it is conceivable that the class might become rowdy or perhaps fall behind in their course work. No car would go out of control and no power lines would fall. The school district owes only a duty of ordinary care to the public and its employes. Its undertakings are not of a nature involving a high degree of danger to the public and the students.

Respondent argues that s. 143.12, Stats., mandates that a teacher, school nurse or principal who knows of or suspects that a communicable disease is present in the school in which he works must at once notify the local health officer. Further, Respondent argues that under this statute, any teacher, school nurse or principal may send a pupil home who is even suspected of having a communicable disease or any other disease the department specifies by rule. The Respondent's reliance on ch. 143 for establishing itself as a special duty employer is misplaced. First, it should be noted that a school district's authority under s. 143.12 is limited to sending students home and does not include authority to send employer home. Secondly, it must be noted that nowhere under this statute does it give public health duties to the school district. Section 143.12(1) of the Wisconsin Statutes simply provides that teachers, nurses or principals of any school knowing or suspecting that a communicable disease is present in the school shall at once notify the local public health officer.

Exclusion or isolation of adults with communicable diseases is controlled by s. 143.05 of the Wisconsin Statutes, and provides that the Department of Health or the local health officer is empowered to require isolation, modified forms of isolation or restrictions of any type on a person due to their infection with a communicable disease. This section does not in any way give to a school board any public health powers or duties.

The general duties of a person with knowledge of another's communicable disease are set out in s. 143.04(3) of the Wisconsin Statutes. That section provides that any person having knowledge or reason to believe that another person has a communicable disease should report that fact to the local public health officer. The district's duty in the reporting of communicable diseases is no different than any other person's.

Far from granting the school district authority to exclude teachers or other employes with suspected communicable diseases, ch. 143 reserves that power to the local public health officer.

Finally, the Respondent's assertion (regarding s. 111.34(2)(b)) that in adopting Policy 5151 it merely considered the present and future safety of individuals with AIDS, their co-workers and the students and that the testimony Respondent elicited at the hearing overwhelmingly indicated that such concern was reasonably related to the policy in light of the serious nature of the AIDS virus, is not.. supported by the record. Neither is its claim that what Respondent sought was to temporarily reassign an individual with AIDS or ARC for the purpose of determining whether his particular condition would affect the health and safety of others. The overwhelming evidence supports the ALJ's conclusion that Policy 5151 was intended to be an absolute bar on the attendance of individuals with the AIDS virus (see ALJ's Mem. Op. at pp. 25-27). Further, the Respondent was unable to produce even one expert on infectious diseases who would support its conclusion that the AIDS virus was communicable in the school setting through contact such as would occur between teachers and students and between students. Those persons called by the Unified School District as medical experts were unable to specify even one case in which transmission occurred in the school setting or through contact such as would occur in a school setting. The strongest testimony the school district could present was that it was possible that at some point in the future such a case might occur.

On the other hand, the Complainant presented the testimony of the state epidemiologist, the holders of endowed chairs in Infectious Diseases from the Medical College of Wisconsin and the University of Wisconsin, and experts in the study and treatment of AIDS, and all of these witnesses testified that the view of the superintendent of schools that there was a reasonable possibility of the transmission of the HIV virus in the school setting was not supported by any scientific or medical knowledge. These experts also uniformly testified that the state of knowledge about the transmission of the HIV virus in 1985, at the time that the superintendent of schools was formulating this policy, was advanced and thorough. Each of these experts agreed with the conclusions of the United States Department of Health and the Centers for Disease Control which had been presented to the school board and the superintendent of schools prior to the passage of the policy, to wit, that there was no danger of transmission of the virus in the schools through normal day-to-day contact. Further, these experts agreed that a person with ARC or AIDS would not constitute a risk to students and co-employer of contracting opportunistic infections from the person with ARC or AIDS; and that there are few harmful infections the presence of which in the school setting would warrant a recommendation that a person with ARC or AIDS automatically be removed for his or her own good. See the ALJ's findings of facts numbered 68-89.

As noted above, the "present and future safety defense" exception provided under s. 111.34(2)(b) states as follows:

(b) In evaluating whether a handicapped individual can adequately undertake the job-related responsibilities of a particular job, membership or licensed activity, the present and future safety of the individual, of the individual's coworkers and, if applicable, the general public may be considered. However, this evaluation shall be made on an individual case-by-case basis and may not be made by a general rule which prohibits the employment or licensure of handicapped individuals in general or a particular class of handicapped individuals. (Emphasis added.)

The ALJ found, and the evidence fully supports her determination, that Policy 5151 was a general rule prohibiting employment of all individuals who have AIDS or ARC. (See Mem. Op. at pp. 25-31 & p. 44)

However, the Complainant had argued before the AIJ that the Respondent could not justify a general rule of exclusion under the present and future safety exception to the handicap provisions because the statute specifically provided that the determination as to whether a handicapped individual could safely perform the job is to be made an individual case-by-case basis and may not be made by general rule .

The ALJ rejected the Complainant's argument stating:

Under this interpretation of the statute, Policy 5151 could be declared illegal without any further inquiry as to whether or not individuals who have AIDS or ARC would be a threat to the safety of others in the schools. Perhaps this is what the statute requires. However, it is unlikely that the legislature would have intended that a general rule of exclusion would be unlawful if in fact an employer could prove that every individual with a particular handicap would be a threat to the present or future safety of others in the work place. If all individuals with AIDS/ARC would pose a threat to the safety of themselves, of their co-workers or of the general public if they were allowed in the Racine Unified Schools, then Respondent would be justified in adopting a general rule of exclusion. (emphasis in original)

Mem. Op. pp. 44-45.

However, the ALJ 's decision on this question is difficult to reconcile with either the plain language of the statute or the declared policy of the Act. The Commission therefore rejects the ALJ's determination on this question. Section 111.34(2)(b)'s prohibition against evaluating a handicapped individual by general rule (effective 1982) was apparently passed by the Legislature in direct response to the Boynton Cab decision which had been decided in 1980. Boynton Cab had allowed an employer with a special duty to the public to exclude all persons with a specific handicap from employment by a general rule.

The language of s. 111.34(2)(b) is clear and unequivocal. The evaluation of the present and future safety of the individual, his or co-workers' safety and the general public where applicable "shall be made on an individual case-by-case basis and may not be made by a general rule which prohibits the employment . . . of handicapped individuals in general or a particular class of handicapped individuals." (emphasis added) Further, the Act's policy declaration specifically states that "it is the intent of the legislature in promulgating this subchapter to encourage employers to evaluate an employe or applicant for employment based upon the employe's or applicant's individual qualifications rather than upon a particular class to which the individual belongs." (s. 111.31(2)) Thus, the goal of the Act is to ensure that every individual employe and applicant gets judged on individual merit, rather than under a set of preconceived notions packaged into a "label." If a general rule can be used sometimes because all members of a group present a safety hazard, this only invites the use of general rules whenever an employer believes all members of a group to pose a hazard. At the core of the WFEA is an understanding that unfair discrimination works precisely this way -- the belief that all members of a group are the same and can be generalized about. The legislative intent and purpose of the Act is better served by not permitting an exception to be carved out of the statute. Finally, although the statute would make the mere declaration of a general rule of exclusion illegal under the Act, in order to obtain any relief beyond a mere determination that a general rule of exclusion was discriminatory, a complainant would need to make a showing as to his or her ability to safely perform the job-related responsibilities of his or her employment.

Section 111.322 provides that subject ss. 111.33 to 111.36, it is an act of employment discrimination to do any of the following:

(1) To refuse to hire, employe, admit or license any individual, to bar or terminate from employment or labor organization membership any individual, or to discriminate against any individual in promotion, compensation, or in terms, conditions or privileges of employment or labor organization membership because of any basis enumerated in s. 111.321)

The ALJ ruled (by way of her Memorandum Opinion) that the Complainant failed to establish a cause of action under s. 111.322(1) because Complainant had presented no evidence that Respondent had refused to hire, employ, admit or license, barred or terminated from employment any person with AIDS or ARC. The Complainant has appealed this determination, arguing that the Respondent's adoption of Policy 5151 in and of itself should be held to be an act of discrimination under Wisconsin law. However, the plain language of the statute makes it clear that what is prohibited under s. 111.322(1) is for an employer to do one of the actions enumerated in s. 111.322(1). This intent of s. 111 .322 (1 ) is further borne out by s. 111. 321 of the Act which provides:

Subject to ss. 111.33 to 111.35, no employer, labor organization, employment agency, licensing agency or other person may engage in any act of employment discrimination as specified in s. 111.322 against any individual on the basis of age, race, creed, color, handicap, marital status, sex, national origin, ancestry, arrest record or conviction record.

As found by the ALJ, s. 111.322(1) requires the Complainant to show that the Respondent acted against an individual in a prohibited manner and Complainant has failed to do this.

In her decision and order regarding attorney's fees and costs the ALJ held that:

(1) the Complainant had completely prevailed for purposes of determining its entitlement to attorney's fees and therefore its petition for attorney's fees shall not be reduced;

(2) the reasonable number of hours devoted to the case by Complainant's attorneys was 706.38 hours;

(3) the reasonable hourly rate for Complainant's attorneys is $100 per hour;

(4) the "lodestar" amount (reasonable hours multiplied by reasonable hourly rate) should be enhanced by 50 percent due to the substantial risk Complainant's attorneys undertook in accepting and prosecuting this case; and

(5) that Respondent is not entitled to an award of attorney's fees because it was not the prevailing party in this matter.

On appeal, the Respondent characterizes the litigation in this matter as "wholly unnecessary litigation" and argues that an attorney fee award for such litigation is contrary to public policy considerations. Specifically, citing Watkins v. LIRC, 117 Wis. 2d 753, 345 N.W.2d 482 (1984), the Respondent contends that the dual purpose of awarding attorney's fees under the Act is to make the individual victims of discrimination whole and to discourage discriminatory practices in the employment area but no purpose could be furthered by awarding attorney's fees to the Racine Education Association because: (1) there are no "individual victims of discrimination" to "make whole;" (2) there has not been, nor could there be, any discrimination arising from the policy, since it has always been held in abeyance pending receipt of an Attorney General's opinion regarding its legality; and (3) the Racine Education Association ignored the District's attempt to bargain the impact of the policy and end this conflict short of litigation. The Respondent's contentions cannot be sustained.

While the Respondent has correctly identified the two purposes of an attorney's fee award cited in Watkins, even if an award of attorney's fees may not be required to make a party "whole," there is still the second purpose of discouraging discriminatory practices in employment. which will be accomplished through a fee award. Watkins did not hold that an award of attorney's fees was to be made in a particular case only if an award would satisfy both purposes of an award of attorney's fees.

Secondly, the Respondent does correctly note that approximately one month after the District adopted Policy 5151 the District did seek an Attorney General opinion which in part questioned whether Policy 5151 would violate the Wisconsin Fair Employment Act or a new law (Assembly Bill 487, Wis. Act 73) which prohibited pre-employment tests for HTLV-III infection and prevented an employer from affecting the terms and conditions of employment for individuals treated for the AIDS virus. However, the Respondent is not correct in its assertion that Policy 5151 has always been held in abeyance pending receipt of an Attorney General's opinion regarding its legality. In fact, the evidence shows that the situation was just the opposite. After the Attorney General's opinion was requested Superintendent Woods commented at the December 16, 1985 Board meeting as follows:

. . . We have asked our attorney, Mr. Johnson to request an Attorney General's opinion on at least a portion of that which indicates there may be same limitation on your ability as a Board to reassign a person or staff member afflicted with AIDS. That Attorney General's opinion will probably take a minimum of 30 days; perhaps could take 60 to 90 days. So pending that, we would still want the policy to stay in place . . . (emphasis added)

Further, as of the hearing in this matter in late March 1987, Policy 5151 was still the official policy of the District and had never been amended, rescinded or suspended by the Respondent's Board of Education.

Policy 5151 is violative of s. 111.322(2) even if the District has never carried out its threat to engage in discriminatory action. Section 111.322(2) prohibits an employer from printing or circulating or causing to be printed or circulated any statement which implies or expresses any limitation, specification or discrimination with respect to an individual or any intent to make such limitation, specification or discrimination because of, among other bases, handicap or sexual orientation. Respondent's request for an AG's opinion and assertion about what might have been done if the Attorney General had found the policy to be in violation of the law misses the point. Further, the Respondent's assertion that the Complainant's decision to litigate was somehow unreasonable is simply not supported by the record. First, as noted above, Policy 5151 is still the official policy of the District. Moreover, the evidence shows that the District adopted Policy, 5151 in disregard of the advice of its own medical advisor and the overwhelming weight of medical and scientific opinion, and that it adopted said policy despite advice by Janice Hand (the Executive Director of the Great Lakes Hemophilia Foundation) that the policy was in conflict with the latest draft of the Wisconsin Department of Health Task Force's AIDS guidelines, and warnings by the Executive Director of the Racine Education Association that the policy did not comply with Wisconsin and federal case law. Furthermore, as noted by the Complainant, an opinion of the Attorney General is a non-binding statement of opinion. It could not be enforced by the Complainant. Also, such opinions are not due as a matter of right to school districts, and may only be required by state agencies, district attorneys and the Legislature. Section 165.015, Wis. Stats.

Thirdly, the Respondent's assertion that this conflict could have been ended short of litigation had Complainant accepted the District's offer to bargain regarding the impact of Policy 5151 misconstrues the facts and the law. First, the District had already passed and adopted Policy 5151 at the time of the offer to bargain. Further, Complainant points out that since "impact bargaining" refers to discussion between a labor union and an employer regarding a decision already made by the employer, it is not the function of impact bargaining to change the decision already made, but rather to compensate the employes for the change which has been made by the employer.

Next, the Respondent argues that Complainant actually alleged two violations of the WFEA . . . violation of s. 111.322(1) and a violation of s. 111.322(2) . . . and only prevailed on the issue involving s. 111.322(2). Respondent argues that Hensley v. Eckerhart, 31 FEP Cases 1169, 461 U.S. 424, 103 S.Ct. 1933 (1986), held that a prevailing complainant is not entitled to payment of attorney's fees for issues which were litigated unsuccessfully. First of all, Respondent's statement of the holding in Hensley is not quite an accurate statement of the Court's holding. What the Court actually held was that:

Where the plaintiff has failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of a reasonable fee. Where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his attorney's fees reduced simply because the district court did not adopt each contention raised.

31 FEP Cases at 1176. (Emphasis added.)

In any case, in the instant case the Complainant advanced no unsuccessful claim. The Complainant complained of handicap and sexual orientation discrimination under the WFEA. The Complainant advanced more than one theory of liability, but all theories were brought on the bases of handicap and sexual orientation discrimination and the ALJ has found for the Complainant on both claims of liability advanced -- handicap and sexual orientation discrimination. In Hensley the Court stated that same "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... the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit... (citation omitted) Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters." The ALJ's order of October 9, 1987, awarded Complainant the same injunctive relief it would have received if it had prevailed under the theory of a s. 111.322(1) violation. That relief was a cease and desist order directing Respondent to withdraw its policy banning individuals with AIDS or ARC from the work place from its book of craft policies. (See ALJ Decision and order regarding attorney's fees at p. 3.)

The Respondent next argues that the Complainant's attorneys' rate of $100.00 per hour for their services is excessive based upon the fact that Respondent's attorneys charged $80.00 per hour. The determination of the appropriateness of an hourly rate is based upon whether that rate is in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation. While the rate Respondent's counsel charges its, clients may be relevant in making this determination, its relevancy in this particular case is outweighed by the fact that the Respondent has offered absolutely no evidence whatsoever to contradict the Complainant's fee petition and affidavits of three local attorneys which state that $100.00 per hour is within the prevailing rate of compensation charged in Racine County for work in civil rights and discrimination cases. Furthermore, the record does not disclose that Respondent's attorneys possessed legal experience and reputation similar to that of Complainant's attorneys. The Respondent also asserts that the cases of Johnson v. Georgia Highway Express, 7 FEP Cases 1, 488 F.2d 714 (5th Cir. 1974) and Waters v. Wisconsin Steel Works, 8 FEP Cases 577, 502 F.2d 1304 (7th Cir. 1974), both held that the nature and length of the attorney's professional relationship with his client is relevant to the award of attorney's fees and that it believes that the $100.00 hourly rate is in excess of the rate that Complainant's attorneys generally charge the union in "other matters." Actually what the court said in Johnson was that in computing the fee a court may consider the fact that a lawyer may vary his fee for similar work in light of the professional relationship of the client and his office. Complainant's counsel has previously indicated that it has not handled other discrimination cases for the union and that the work it does do for the union is dissimilar to that done in this case. The Respondent has not shown otherwise.

The Respondent additionally argues that 98.05 hours of Attorney Robert K. Weber's time should not be compensated because Attorney Weber did not produce contemporaneous time records to document his claim for those hours. The Respondent complains that the ALJ only reduced the hours Weber claimed by 20 percent to allow for the possibility of error in his reconstruction of the time spent on the case and did not bar payment for all of these hours.

In support of its argument here the Respondent cites cases stating that attorneys "must establish a system of keeping time that lends itself to judicial scrutiny in considering awards of attorney's fees (Lockheed Min. Sol. Coal v. Lockheed M&S Co., 406 F. Supp. 828 (N.D. Cal. 1976)), and that "it is not enough to offer a rough estimate of the time expended and then explain discrepancies that arise with claims that they were offset in other places." (Vocca v. Playboy Hotel of Chicago, Inc., 686 F.2d 605 (7th Cir. 1982). However, carefully reconstructed time records are recognized as proof of time expended

Time records, although highly desirable, are not the only means of proving time spent in multi-distinct litigation of this sort . . . although mere estimates of time are not acceptable, and allowance of attorney's fees may be based on reconstruction, provided that the time records are substantially reconstructed and are reasonably accurate. Lindy Brothers Builders v. American Radiation and Standard Sanitary Corp., 540 F.2d 102, 109 (3rd Cir. 1976).

The lack of contemporaneous records does not justify an automatic reduction in the hours claimed. See Johnson v. University College, 31 FEP Cases 1744, 706 F.2d 1205 (11th Cir. 1983). There the attorney's testimony and secondary documentation of the attorney who had maintained contemporaneous records were held sufficient to support her claim that she worked 100 hours. Also, see MacDissi v. Valmont Industries, 47 FEP Cases 1418 (CA 8th Cir. 1988). There the employer's attorneys protested an award of attorney's fees based on reconstructed records, but suggested no particular reason to believe the reconstructed records overstated the time actually spent and instead seemed to be urging the court to adopt a per se rule that failure to keep contemporaneous time records automatically precluded recovery of attorney's fees. The court refused to do so stating:

The question of whether reconstructed records accurately document the time attorneys have spent is best left to the discretion of the court most familiar with the litigation. The maintenance of such records is certainly desirable, and district courts may reduce or eliminate attorney's fees awards where the absence of such records leaves the court without a reliable basis on which to award fees. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). In this case, however, the District Court concluded that the attorneys' records reconstructed from contemporaneous notes did satisfactorily document their time, and that the time expended was reasonable in the context of this litigation.

47 FEP Cases at 1424 and 1425.

As noted by the ALJ, Attorney Weber has "submitted an affidavit setting forth in detail the actual work which he performed . . . along with copies of the actual work produced. That work product includes the complaint and a supplementary letter of January 31, 1987, detailed letters to the Equal Rights Division at the investigation and conciliation stages, and a brief in opposition to Respondent's first motion to dismiss. Attorney Weber has additionally submitted partial time records for 1986." Based upon this showing, the ALJ concluded that "in this particular case, it appears that Attorney Weber's reconstruction of the time he spent on this case is based upon a careful review of the work actually performed during this period. There can be no question that Attorney Weber spent a significant amount of time preparing the documents which he presents in support of his fee petition." (ALJ Decision and order re Attorneys Fees and Costs, pp. 3 & 4) Furthermore, as noted by the Complainant, the Respondent has affirmatively stated that it does not believe that Attorney Weber's reconstructed records were "manufactured."

The situation presented here does not justify a complete denial of the 98.05 hours claimed by Attorney Weber.

Further, the Respondent argues that none of the time spent by Attorney Weber as "second chair" at the hearing should have been reimbursed and that the fact that Complainant's counsel was willing to bill Respondent at a reduced rate (reduced by factor of 35/100) for this time lends credence to Respondent's contention that this time is not properly billable. Complainant's counsel have argued that this was a complicated case with multiple exhibits and that Respondent's attorney was supported at the hearings at all times by a paralegal while Complainant's law firm does not have a paralegal. While the case may have been complicated and involved multiple exhibits, Complainant's counsel's own statement here suggests that a paralegal would have been sufficient to assist at the hearing. For that reason, the Commission believes the expense of second chair time should be further reduced. The evidence indicates that the paralegal assisting Respondent's counsel was paid at a rate of $30 per hour during the hearings in this matter. Using this amount as the appropriate rate for second chair time the total second chair time of 39.20 hours (Complainant's counsel listed 40.20 hours due to an error in adding) should be further reduced by a factor of thirty-five one-hundredths (35/100) for a total reduction of seventy one-hundredths. An additional reduction of 13.38 hours from the existing award of 706.38 hours will establish a correct reduction in hours for second chair time. The new lodestar figure will be 693 hours times $100.00 per hour, or $69,300.00.

Next, the Respondent argues that the ALJ's enhancement of the lodestar amount to compensate for the contingent nature of success Complainant's counsel faced was inappropriate. The ALJ took her lodestar figure of $70,638 and enhanced it by 50 percent to establish a fee award of $105,957.

In Pennsylvania v. Delaware Valley Citizens' Council (Delaware Valley II), 107 S.Ct. 3078, 45 FEP Cases 1750 (1987), the Court addressed the issue of whether a prevailing party should or may be awarded separate compensation for assuming the risk of not being paid. A majority of the justices (Justice O'Connor together with the four dissenting justices, Blackmun, Brennan, Marshall and Stevens) held that attorney's fees may be enhanced due to contingency of payment. (That is, the fee award may be enhanced to compensate for the risk of not prevailing.) However, these justices agreed that the "compensation for contingency must be based on the difference in market treatment of contingent fee cases as a class, rather than on an assessment of the 'riskiness' of any particular case." 45 FEP Cases at 1758 (O'Connor, J., concurring) (emphasis in original). A different majority (Justice White, Chief Justice Rehnquist, and Justices Powell, Scalia and O'Connor concurring), held that "no enhancement for risk is appropriate unless the applicant can establish that without an adjustment for risk the prevailing party 'would have faced substantial difficulties in finding counsel in the local or relevant market."' 45 FEP Cases at 1759 (0'Connor, J., concurring, quoting Justice White at 1758). Justice O'Connor also agrees with this majority that "the 'novel and difficulty of the issues presented, and . . . the potential or protracted litigation,' are factors adequately reflected in the lodestar." 45 FEP Cases at 1758 (O'Connor quoting Justice White at 1756).

In accordance with the Court's guidelines, two basic criteria must be met to obtain an enhancement of the lodestar amount. The fee applicant must establish that 1) the rates of compensation in the relevant market for contingent fee cases as a class differ from the rate of compensation in non-contingency fee cases; and 2) the applicant would have faced substantial difficulty in finding counsel without an enhancement for risk.

The ALJ's 50 percent enhancement of the lodestar amount appears to be based on the very considerations that a majority of the Court held was insufficient to justify an enhancement. See p. 7 of ALJ decision on attorney's fees.

The Complainant had argued that an enhancement of its lodestar fee was appropriate because (1) the case had been accepted on a contingent fee basis; (2) the legal and factual issues were novel and complex; (3) the quality of representation provided; and (4) the length of time over which the representative has been provided in this case. The record in this case does not support the award of any fee enhancement. No evidence was submitted by Complainant to satisfy the two requirements for fee enhancement as set down by the Court in Delaware Valley II. For this reason the ALJ's enhancement of the lodestar fee by 50 percent has not been allowed by the Commission.

The Complainant has also submitted a petition for fees (and costs) incurred litigating the fee issues before the ALJ (29.10 hours at a rate of $100 per hour) and fees for briefing the issues before the Commission (14.45 hours expended in briefing the Complainant's issues for review and 13.95 hours expended for briefing the Respondent's issues for review. The hourly rate here is also $100.00 per hour.). The Respondent has not objected to this request for additional fees except to repeat all of its aforementioned arguments against allowing any award of attorney's fees.

Since the Commission has found it inappropriate to allow Complainant's request for enhancement of the lodestar amount the Commission finds that it would be appropriate to reduce the requested 29.10 hours spent litigating the fee issue before the ALL As stated in EEOC v. Burlington Northern, Inc., 45 FEP Cases 1701, 1703 (N.D. Ill. 1986)

In Hensley, the Supreme Court held that when determining the amount of a fee award, a crucial factor to consider is the extent of success on the merits. Id. at 1940-41. The Court reasoned that since Congress authorized that only reasonable fees be awarded, a reduction is warranted where a petitioning party achieves "only partial or limited success." Id. at 1941.

This court is of the opinion that the reasoning of Hensley is equally applicable to a petition seeking an award for time spent litigating a claim for fees. Any other result would be illogical; to allow a fee petition, which considers the degree of success on the merits, and then reimburse the petitioning party without regard to the extent of success on that original petition for fees, is contrary to the spirit of the Fees Act.

Complainant's fee application shows that Complainant's counsel spent time on the enhancement issue on April 14, 1988. There are two blocks of time for that date: 2.75 hours, and 1.50 hours which was combined with another function. By halving the 1.50 hours there is a total reduction of 3.50 hours for work involving enhancement of the lodestar amount.

Additionally, since the Complainant prevailed on only one of its two claims before the Commission, the Commission has reduced the Complainant's requested number of hours for time spent briefing those issues by one-half (7.20), while all of the 13.95 hours Complainant's counsel expended briefing the Respondent's issues for review has been allowed.

The total number of additional hours for which attorney's fees will be awarded is 46.80. At a rate of $100.00 per hour this yields $4,680.00 in additional attorney's fees. Expenses and costs shown amount to $95.50.

Finally, the Respondent argues that its request for attorney's fees should have been granted by the ALJ. However, as noted by the ALJ: The Respondent is not entitled to an award of attorney's fees because it is not the prevailing party. But even if it were the prevailing party, it would not be entitled to an award for attorney's fees because the Act does not authorize an award of attorney's fees to prevailing employers.

125

Appealed to Circuit Court.  Affirmed.  Appealed to the Court of Appeals.  Affirmed September 11, 1991 sub nom. Racine Unified School Dist.v. LIRC, 164 Wis 2d 567, 476 N.W.2d 707 (Ct. App. 1991).

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