Wis.LIRC ER Decision: Biggers, Gaile - March 25, 1998 - Remedy - mitigation of damages - sufficiency of evidence

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

GAILE PAULETTE BIGGERS, Complainant

ISAACS LOUNGE, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 9150422, EEOC Case No. 26G910625

For reasons that are set forth in the attached memorandum opinion regarding the above-captioned matter, the Labor and Industry Review Commission issues the following:

ORDER

This case is remanded to the Equal Rights Division of the Department of Workforce Development for a hearing and determination of the appropriate remedial relief due Ms. Biggers.

Dated and mailed: March 25, 1998
biggega . rpr : 125 : 9

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

In a decision issued on October 21, 1993, the commission held that Isaac Wilson, the owner of Isaac's Lounge, had discriminated against complainant Gaile Biggers by subjecting her to sexual harassment because of her sex and by terminating her employment on December 5, 1990, because she resisted the sexual advances of Mr. Wilson. Ms. Biggers had been employed as a waitress and a bartender before becoming an assistant to Mr. Wilson during her last period of employment at Isaac's Lounge. The commission's decision held that Ms. Biggers had been paid $7 per hour, plus tips, that she averaged 15 to 20 hours of work each week and that her average earnings were $140 per week.

The commission ordered the respondent to cease discriminating against Ms. Biggers and to make her whole for all losses in pay and benefits by paying her what she would have earned as an employe but for the termination of her employment. It was ordered that this sum, minus an offset for Ms. Bigger's interim earnings, be computed from the date of Ms. Bigger's termination of employment until the respondent complied with the commission's order. The back pay was to be computed on a calendar quarterly basis with an offset for any interim earnings during each calendar quarter, and any amounts received as unemployment insurance or welfare benefits were not to reduce the back pay award but to be withheld by the respondent and paid to the applicable agency. Additionally, the amount payable to Ms. Biggers after all the statutory setoffs was to be increased by interest at the rate of 12 percent simple interest, and the respondent was ordered to pay Ms. Bigger's attorney's fees and costs, which totaled $2,027.70 as of the date of the commission's decision.

The respondent appealed the commission's decision but it was affirmed by the circuit court, and again by the court of appeals in April 1995. The award ordered by the commission has not yet been paid by the respondent.

The parties are at odds over what amount must be paid. The dispute appears to be pretty much focused on whether or not Ms. Biggers exercised reasonable diligence to mitigate her damages following the termination of her employment, although reference has also been made to an offer by the respondent to reinstate the complainant to her position, apparently during the fall of 1995. Wisconsin Statute section 111.39(4)(c) states that "Interim earnings or amounts earnable with reasonable diligence by the person discriminated against...shall operate to reduce back pay otherwise allowable." Also, a valid offer of reinstatement terminates the accrual of back pay. Anderson v. LIRC, 111 Wis. 2d 245, 330 N.W.2d 594 (1983).

The parties had been requested, and have attempted without success, to resolve between themselves the specific amount that the respondent must pay the complainant. At one point in March 1996 it was necessary to reiterate to the parties what the commission's order held. Later, in June 1996, it was necessary to inquire of the respondent why it had not yet complied with the commission's order, and then in December 1996 the commission was advised that Isaac Wilson had filed a petition for liquidation under Chapter 7 of the Bankruptcy Code. Among other things, this petition noted that the debtor (Wilson) was seeking a discharge of debts (i.e., that certain debts are made unenforceable against the debtor personally), that creditors were prohibited from taking action against the debtor to collect money owed or to take property of the debtor, but that if a creditor believed the debtor should not receive any discharge of debts under section 727 of the Bankruptcy Code or that a debt owed to the creditor is not dischargeable under sec. 523(a)(2), (4), (6), or (15) of the Bankruptcy Code, timely action had to be taken in the bankruptcy court.

After receiving notice of the bankruptcy petition, the parties were notified in January 1997 that in view of the bankruptcy petition filed by Wilson, no further effort would be made to enforce the award ordered by the commission's decision.

In a letter dated February 10, 1998, notice was received from the complainant's counsel that the bankruptcy court had determined that Ms. Bigger's claim against Isaac Wilson was nondischargeable, (1 ) and requesting that the commission act on her petition for an award of back pay and attorney's fees. A computation was enclosed showing that the combined wage lost, interest and attorney's fees owed as of the date of this letter was $89,028.13.

In a letter dated February 23, 1998, the respondent's counsel responded to the complainant's counsel's letter of February 10, asserting, among other things, that given the number of taverns and saloons in the Milwaukee area it was difficult to believe that Ms. Biggers, using reasonable diligence, was unable to find any part-time work in a tavern during a 3-year period. (2 ) The respondent questioned how often the complainant had submitted job applications during this period, and whether she could have been working for pay when instead she was volunteering her time in running a tavern for a friend. The respondent offered two suggestions, the second of which would be to have a hearing on the mitigation issue, with time allowed for discovery. The respondent's first suggestion, which it stated would be the best way to resolve the matter, would be through the submission of briefs after the complainant provided the following information:

1. Copies of all State and Federal tax returns filed by (Ms. Biggers) from 1990 through 1997.

2. An affidavit which outlines in detail all efforts made by (Ms. Biggers) to secure employment, including a listing of all places where she submitted resumes or filled out applications and detailing all dates and times she volunteered her time in assisting in the operation of her friend's tavern (and any other times she was volunteering her time in operating for-profit businesses). Additionally, the affidavit should include an accounting of any unemployment benefits received, any employment held, and the reasons for leaving such employment.

Counsel for the respondent asserts that this is the information he would be seeking in discovery and at a hearing.

Counsel for the respondent also asserted that, "...given the fact that (Ms. Biggers) failed to act upon the respondent's offer to resume her employment, the Commission could fix, with specificity the amount of wages loss..."

The complainant's counsel submitted a reply by letter dated February 27, 1998, stating that the record was replete with documentation that Ms. Biggers had exercised reasonable diligence, including two affidavits, that she had provided the respondent's counsel with the exact affidavit being requested now two years ago, that the fact that the request for additional discovery was not raised until the case came before the bankruptcy court and that no evidence has been submitted to contradict her affidavits, suggests that the respondent's true intentions are not additional discovery, but to delay LIRC's 1993 mandate even further. Previously, in her March 1996 supplemental affidavit Ms. Biggers had stated, among other things, that between December 1990 and when she obtained part-time employment in 1993, she made application for part-time jobs at a hotel for a bartender position and a retail store as a clerk and recontacted those businesses, that in addition to these formal applications she contacted two other business entities (Hyatt Hotel and Milwaukee Athletic Club) for a bartender position and the Milwaukee Area Technical College for a position as a teacher's assistant, and that she was advised that due to her employment and overtime responsibilities with the Marquette School of Dentistry (Ms. Biggers had been employed at Marquette when she worked part-time at Isaac's Lounge and continued to be so employed), she was not suited for part-time employment with the Hyatt Hotel, Milwaukee Athletic Club or MATC. Further, Ms. Biggers stated that she had not applied for a position in a small neighborhood tavern between December 1990 through 1993 based on her experience at Isaac's Lounge but instead had contacted and submitted formal applications to large institutions such as those previously mentioned.

Ms. Biggers asserts that the commission has the legal authority, and a factual basis in the record, to set the amount of her damages. She asserts that if the commission disagrees, to schedule the case for a hearing immediately and without providing respondent's counsel the opportunity to subject her to additional discovery and litigation expense. Ms. Biggers also disputed that she had failed to act upon the respondent's offer to resume her employment, enclosing a copy of a December 21, 1995 letter she states was sent to respondent's counsel accepting the offer but the respondent never replied.

On March 3, 1998, a letter was received from the respondent's counsel stating, among other things, that the issue of mitigation had been raised prior to the bankruptcy proceedings, contrary to complainant's counsel's statement, and that he believes Ms. Biggers worked for a period of time, for cash wages, in a tavern, and had conveyed this belief to her counsel prior to this round of letter writing. Further, respondent's counsel acknowledges that Ms. Biggers has submitted affidavits, but states that he asked for affidavits to provide additional information to what was in the affidavits previously submitted, as a means of introducing evidence without a hearing.

While not particularly impressed with the parties' efforts to resolve this matter, the commission concludes there is no alternative but to remand this case for hearing and determination of the specific amount of back pay owed Ms. Biggers. The commission has held that the usual practice in discrimination cases is to issue a generally-worded back pay order if a statutory violation is proven, and then to hold a hearing to determine the specific amount of back pay owed if the parties cannot agree. Kacyzinski v. WSR Corporation, (LIRC, 10/29/97).

Whether or not Ms. Bigger's supplemental affidavit adequately details her efforts to mitigate her damages is subject to debate.

Consideration has been given to simply requesting that the complainant submit through affidavit the information that the respondent now seeks. However, it seems that if this would be all that were necessary to conclude the matter, it would have already been resolved by now.

The commission does not believe that it would be proper not to allow respondent's counsel the opportunity to conduct discovery prior to the hearing regarding Ms. Bigger's mitigation efforts, however. Section 804.01(3) of ch. 804 Wis. Stats., which governs the scope, method and use of discovery in equal rights cases, provides that for good cause shown, the court may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including, among other things, that discovery not be had. However, it is hard to make a case that good cause has been shown for ordering that discovery not be undertaken by the respondent when it is subject to debate whether or not Ms. Biggers has adequately mitigated her damages, and the respondent has stipulated to foregoing discovery and a hearing altogether if Ms. Biggers would submit her tax returns and an affidavit containing specified information regarding her mitigation efforts.

The parties should also present evidence at the hearing with respect to whether or not the accrual of back pay should be terminated because of an offer of reinstatement made by the respondent. Additionally, although there has apparently been no dispute as to the amount claimed for attorney's fees and costs, documentation should also be presented regarding the amount of attorney's fees and costs claimed so that a determination may be made as to what is owed for attorney's fees and costs.

cc: M. NICOL PADWAY
ROBERT E. HANEY

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Footnotes:

(1)( Back ) The bankruptcy court concluded, based upon the findings of the commission's decision, that Mr. Wilson's conduct toward Ms. Biggers constituted "willful and malicious injury" to Ms. Biggers, and as a consequence Mr. Wilson's debt was nondischargeable under the Bankruptcy Code. The Bankruptcy Code provides that a debtor is not discharged from any debt "for willful and malicious injury by the debtor to another entity or to the property of another entity." 11 U.S.C. � 523(a)(6). The bankruptcy court declined to determine the dollar amount owed Ms. Biggers, noting that to the extent it had jurisdiction to determine these amounts it was abstaining from doing so, that if there is a question as to Ms. Bigger's mitigation efforts or earnings, the commission would be the appropriate forum to determine the amount by which the damages should be reduced, if any, and that the commission, or the state court, was the appropriate forum to determine the amount of attorney's fees.

(2)( Back ) In an initial affidavit submitted in February 1996, Ms. Biggers failed to detail her efforts taken to mitigate her damages between December 1990 and 1993. She submitted a supplemental affidavit, referred to in greater detail below, to cover this period.