RONALD R. GUSTAFSON, Complainant

C. J. W. INC., Respondent A

GEROLMO LIQUOURS, LTD., Respondent B

TRIANGLE WHOLESALE, INC., Respondent C

In a complaint filed with the Equal Rights Division of the Department of Industry, Labor and Human Relations on February 14, 1986, the Complainant, Ronald R. Gustafson ("Gustafson") alleged that Respondents C.J.W. Inc. ("C.J.W."), Gerolmo Liquors, Ltd. ("Gerolmo"), and Triangle Wholesale, Inc. ("Triangle") had fired him because of his arrest record in violation of the Wisconsin Fair Employment Act, sec. 111.31-111.395, Stats. In an Initial Determination issued on July 23, 1986, an investigator for the Equal Rights Division concluded that there was probable cause to believe that such discrimination had occurred. Efforts at conciliation were waived and the matter was certified to hearing. Pursuant to notice, hearing was held on October 19, 1987 before Administrative Law Judge John A. Grandberry. On September 19, 1988, Judge Grandberry issued a decision in which he concluded that C.J.W., Gerolmo and Triangle had discriminated against Gustafson as alleged. C.J.W., Gerolmo and Triangle filed a timely petition for review of Judge Grandberry's decision by the Labor and Industry Review Commission.

Based on a review of the record in its entirety, the Labor and Industry Review Commission now makes the following:

1. C.J.W., Inc., Gerolmo Liquors, Ltd., and Triangle Wholesale, Inc. are all closely held Wisconsin corporations engaged in the business of wholesale provision of beer and liquor. Members of the Madrigrano family own controlling interests in all three companies. The three companies employ one man, Richard Knapp, as their general manager. All three companies operate out of the same location. C.J.W. and Triangle own or use some trucks in common. Gerolmo does sane work for Triangle on a subcontracting basis, but does no other such subcontracting work for any other beer and liquor wholesaler.

2. Ronald R. Gustafson began working for C.J.W. and Triangle on December 27, 1984 as a warehouseman. His duties initially involved helping to load the trucks used by C.J.W. and Triangle. After several months, Gustafson took on additional duties as driver, delivering beer and liquor. At various times, he loaded and drove trucks for Gerolmo, C.J.W. and Triangle.

3. On January 22, 1986, Gustafson was arrested for driving while under the influence of alcohol and operating a motor vehicle with a blood alcohol content of .10 percent or greater. Gustafson had not previously been charged with this offense. The arrest occurred at about 2:00 a.m. while Gustafson was driving his personal vehicle. At the time of the arrest, he was not performing any services for the Respondents.

4. Gustafson disclosed his arrest to general manager Richard, Knapp on January 24, 1986. At that time, Gustafson told Knapp that he had been driving while drunk, that he had been in an accident, and that he had been arrested for driving while under the influence of alcohol and for driving with a blood alcohol content of .10 percent or greater.

5. On January 28, 1986, Knapp telephoned Gustafson and told him that he was terminated. Knapp told Gustafson that he was being terminated because the Respondents could not have anyone driving for them who had a driving while intoxicated offense on their driving record. Knapp also sent Gustafson a letter confirming his termination, and that letter also stated that the reason for the termination was that the Respondents could not have anyone driving for them who had a driving while intoxicated offense on their driving record for their 'insurance reasons No other reason for the termination of Gustafson was mentioned either in the conversation between Gustafson and Knapp on January 28, 1986 or in the termination letter which Gustafson was sent.

6. The charge against Gustafson for operating a motor vehicle while under the influence of alcohol and operating a motor vehicle with a blood alcohol content of .10 percent or greater was dismissed on June 18, 1986.

7. Although the Respondents knew that Gustafson had been driving while drunk and had been in an accident on January 22, 1986, by virtue of Gustafson's admission of these facts to Richard Knapp, these facts were not the reason that the Respondents decided to terminate Gustafson. The Respondents decided to terminate Gustafson only because of his arrest, and because of the Respondents' concern that he would be convicted and would have the offense on his driving record.

Based on the Findings of Fact made above, the Commission makes the following:

1. Respondents C.J.W., Inc., Gerolmo Liquors, Ltd., and Triangle Wholesale, Inc., constitute a single employer of Ronald R. Gustafson within the meaning of the Wisconsin Fair Employment Act, sec. 111.31-111.395, Stats.

2. Respondents discriminated against Complainant because of an arrest record within the meaning of sec. 111.32(5)(a), Stats.

Based on the Findings of Fact and Conclusions of Law made above, the Commission now makes the following:

1. That Respondents cease and desist from discriminating against Complainant because of arrest record.

2. That Respondents immediately reinstate Complainant to the position he held prior to his discharge. Respondents shall upon the reinstatement of Complainant offer him all seniority and such benefits determined on the basis of length of service, including sick leave and vacation credit, to which Complainant would have been entitled, but for Respondents' unlawful termination of Complainant. Respondents shall reinstate Complainant unless Complainant, within 30 days of the receipt of this order, notifies the Commission in writing that he does not wish to be reinstated.

3. That Respondents make Complainant whole for all losses in pay and benefits that Complainant has suffered by reason of its unlawful conduct by paying Complainant the sum Complainant would have earned as an employe from the date of his termination until such time as Complainant is either reinstated or declines to accept reinstatement. The back pay for the period shall be computed on a calendar quarterly basis` with an offset for interim earnings during each calendar quarter. Any unemployment compensation or welfare benefits received by Complainant during the above-described period shall not reduce the amount of back pay otherwise allowable, but shall be withheld by Respondents and paid to the Unemployment Compensation Reserve Fund or to the applicable welfare agency. Reimbursement for unemployment compensation should be in the form of a check, made payable to the Department of Industry, Labor and Human Relations, and should note the Complainant's name and Social Security number. Additionally, the amount payable to Complainant after all statutory setoffs shall be increased by interest at the rate of 12 percent simple. Interest shall be computed as follows: For each calendar quarter in the back pay period, the amount of back pay due for that quarter, after statutory setoffs, shall be computed. Interest shall be computed for each amount from the last day of each such calendar quarter to the day of payment. Pending any and all appeals from this order, the back pay pay due will be the total of such amounts.

4. That Respondent shall pay for the reasonable attorney's fees and costs incurred by Complainant in pursuing this matter. The attorney's fees and costs attributable to proceedings up to and including the decision by the Administrative Law Judge are $1,585.00. A check for the reasonable attorney's fees and costs should be made jointly payable to the Complainant and:;' his attorney, Terry W. Rose, and should be delivered to the Complainant's attorney.

5. That Respondents shall, within 30 days of the date on which this order becomes final, submit a compliance report detailing the specific actions taken to achieve compliance with this order. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P. O. Box 8126, Madison, Wisconsin 53708.

Dated and mailed March 21, 1989

/s/ Hugh C. Henderson, Chairman

/s/ Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

Joint Employer -- Ronald R. Gustafson contends that C.J.W., Inc., Gerolmo Liquors, Ltd., and Triangle Wholesale, Inc. all jointly constitute his employer for purposes of the Wisconsin Fair Employment Act. The three named Respondents have asserted that only Gerolmo Liquors, Ltd. was the employer of Gustafson at the time of his termination, and that therefore only Gerolmo may be found liable for discrimination. The Commission agrees with Gustafson that the Respondents in this matter constitute a "joint employer."

Neither the Commission nor the courts in Wisconsin have yet had occasion to address the question of whether a number of entities may be found to constitute a "joint employer" for purposes of determining liability under the Wisconsin Fair Employment Act. However, the Wisconsin courts have typically looked to federal court decisions applying Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e), for guidance in interpreting the Wisconsin Fair Employment Act. See, e.g., Anderson v. LIRC, 111 Wis. 2d 245, 254, 330 N.W.2d 594, 598 (1983), Puetz Motor Sales, Inc. v. LIRC, 126 Wis. 2d 168, 172, 376 N.W.2d 372, 374 (1985).

The concept of "joint employer" was discussed by the Fifth Circuit Court of Appeals in Trevino v. Celanese Corp., 701 F.2d 397 (5th Cir. 1983), 31 EPD par. 33,489. The court noted that the term "employer" as used in Title VII was meant to be liberally construed, and it continued by stating:

"Over the past decade, numerous courts :have drawn upon theories and rules developed in the related area of labor relations in determining when separate business entities are sufficiently interrelated' for an employe whose Title VII rights have been violated to file a charge against both entities. Thus the rule has emerged that superficially distinct entities may be exposed to liability upon a finding, that they represent a single, integrated enterprise: a single employer. Factors considered in determining whether distinct entities constitute an integrated enterprise are (1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control. Courts applying this four-part standard in Title VII and related cases have focused on the second factor: centralized control of labor relations. (citations omitted] This criterion has been further refined to the point that 'the critical question to be answered then is: what entity made the final decisions regarding employment matters related to the person claiming discrimination?' Odriozolo v. Superior Cosmetics Distributors, Inc. (DPR 1982) 531 F.Supp. 1070, 1076, 30 EPD par. 33,004." 31 EPD at p. 29,251.

The Commission considers that in this case there is evidence of all four factors necessary to a determination that there is a "joint employer." The operations are interrelated; the businesses work out of the same location, there is some sharing of trucks, there is some sharing of business through subcontracting arrangements, and there is sharing of employes as evidenced by statements in the record that the employe herein was "assigned to" or "transferred" between various Respondents at various times. That there is centralized control of labor relations and common management is evident in the fact that these three Respondents all have the same general manager. The Commission does not consider it significant that some drivers are covered by a collective bargaining agreement while there is no collective bargaining unit covering other drivers. What is important in the test established by Trevino is not that the arrangements which the labor relations take be identical between the various entities, but that there be common control of the labor relations among the entities. Finally, there is common ownership or financial control here. At the hearing, counsel for the Respondents made a number of assertions, which were subsequently supported by the inclusion in the Respondents' hearing brief of documents, which show that members of one family, the Madrigranos, own a controlling interest in each of the three corporations named as Respondents in this matter. The Commission considers that the fact that a family has controlling interest in each of these corporations is adequate to establish the type of common ownership and financial control that the test enunciated in Trevino looks to. The fact that it is not exactly the same members of the Madrigrano family who own a controlling interest in each of these corporations does not, in the Commission's view, negate the presumption of common ownership and financial control that is created by the type of multi-generational family control that is evident here.

The "critical question" identified by Odriozolo, supra, can also be answered in favor of a finding of "joint employer": the final decision on employment matters, including the termination of Gustafson, was made by Knapp, an agent for all three Respondents. 
 

Arrest Record Discrimination -- A dispute of fact existed in this case concerning the question of whether Gustafson told Richard Knapp, on January 24, 1986, merely that he had been arrested for driving while drunk, or told him that he had actually been driving while drunk and had been arrested for that behavior. The Administrative Law Judge made no express finding on this question. The Commission has concluded that the employe did tell Mr. Knapp that he had been driving while drunk, based on the employe's testimony to that effect at the hearing (T. 27). Although the employe attempted to recant that testimony later in the hearing on re-direct examination, the Commission finds that subsequent attempt to be unconvincing. The Commission therefore concludes that, on January 24, 1986, Gustafson told Knapp that he had been driving while drunk at the time that he was arrested.

The basic issue in any arrest record discrimination case is whether the employer discriminated against the employe because of the arrest record. In Onalaska v. LIRC, 120 Wis. 2d 363 (Ct. App. 1984), the court of appeals held that, where an employer takes an employment action based upon its belief that an employe has engaged in certain conduct for which the employe was subsequently arrested, and where that belief is based not on the fact of the arrest: but on other information which the employer obtained (such as a statement by the employe to the employer that the conduct had been engaged in), the employer has not taken the employment action in question "because of an arrest record" within the meaning of the Wisconsin Fair Employment Act. Thus, in any case in which it appears that an employe has told the employer that the employe engaged in the conduct for which the employe was arrested (or convicted), the situation must be analyzed with the Onalaska decision in mind to determine whether the subsequent action taken by the employer was taken because of the employer's belief about what the employe had done based on what the employe said, or because of the arrest or conviction itself. It should not be assumed that in such cases the employer's actions are always because of what the employe told the employer. While it is certainly possible that an employer would decide to take a negative employment action against an employe after finding out that the employe engaged in certain conduct, because of that conduct rather than because of a subsequent arrest, it must be acknowledged that it would also be conceivable that an employer would become aware of certain conduct that an employe engaged in but not care about that conduct, and only be concerned about the fact that the employe had been arrested.

In this case, the Commission has concluded that the Respondents, acting through their general manager Richard Knapp, did not actually care that the employe had been driving drunk on the night of the incident in question, but cared only about the fact that he had been arrested and that an arrest and potentially a conviction would be reported on his driving record. The Commission has drawn this conclusion based on the fact that this is precisely what Knapp told the employe. Both in the telephone conversation by which he discharged him, and in the letter of termination, Knapp told the employe specifically that he was being discharged because the employer did not want to have anyone working for it who had a driving while intoxicated offense on his driving record. The Commission considers- that the complete failure of Knapp to express any sort of concern about what Gustafson had done, as opposed to the mere fact that he had been arrested, precludes a finding that he was concerned only about Gustafson's actions and not about the consequences (the arrest). This is therefore not a situation within the rule of Onalaska. The termination was "because of" the arrest record, not "because of" the employer's belief as to what the employe had done.

The Fair Employment Act provides, at sec. 111.335(1)(b), Stats., that it is not employment discrimination because of arrest record to suspend from employment any individual who is subject to a pending criminal charge if the circumstances of the charge substantially relate to the circumstances of the particular job. This affirmative defense is not applicable here, because the charge on which Gustafson was arrested was not a "criminal charge." The evidence establishes that this was the first time that Gustafson had been charged with the offense of driving while under the influence of alcohol and driving with a blood alcohol content of .10 percent or greater. This offense is defined by sec. 346.63, Stats. A first offense under that section is not a criminal offense. State v. Albright, 98 Wis. 2d 663 (Ct. App. 1980), State v. Schultz, 100 Wis. 2d 329 (Ct. App. 1981). 
 

Excessive Delay in Conduct of Hearing --The Respondents have asserted that the Equal Rights Division took an excessively long period of time to conduct a hearing in this matter, and that for this reason its liability should be limited. The Commission does not agree. A delay of this type, like a delay in the issuance of a decision after hearing, may be unfortunate, but it merely delays payment: of an award to the Complainant and his attorney that they. are entitled to by virtue of the wrongful action of the Respondents. An employer concerned that it may eventually be found liable for discrimination and that a potential monetary liability is thus growing while it awaits the outcome of the case may take the option provided by Anderson v. LIRC, 111 Wis. 2d 245 (1983), to make an unconditional offer of reinstatement to the employe. If such an offer of reinstatement meets the standards established in Anderson, it will cut off the back pay liability. No such offer has been made in this case. (The Commission notes, from its inspection of the Division's file, that the Respondents apparently did make an offer to the employe to reinstate him pending resolution of the case, but this offer was not unconditional; it provided that the employe would be expected to agree that if the employer prevailed on appeal it would be entitled to immediately discharge the employe. Without deciding whether an employer would be entitled to carry out such a discharge, the Commission notes that it believes that attaching such a proviso as a condition on a reinstatement offer renders that reinstatement offer not "unconditional" under Anderson.)

NOTE: The Commission was in agreement with the findings and conclusions of the Administrative Law Judge, and has rewritten the decision to supply express findings which were implicit in the Judge's conclusions, and to better conform the findings to the evidence.

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