KERESA ANN SULT, Complainant
JERRY'S ENTERPRISES INC, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusions in that decision as its own, except that it makes the following modifications:
1. Paragraph 4 of the ALJ's order is deleted and the following paragraph is substituted therefor:
"That Jerry's shall pay Sult's reasonable attorney's fees in the amount of $33,264.90 and costs in the amount of $5,825.74, for a total of $39,090.64 as reasonable attorney's fees and costs associated with this matter. A check in the amount of $39,090.64 shall be made payable jointly to Keresa Ann Sult and Attorney Julie A. Lewis and delivered to the law firm of Nolan & Mouat, LLP."
2. Paragraph 5 of the ALJ's order is deleted and the following paragraph is substituted therefor:
"Within 30 days of the expiration of time within which an appeal may be taken herein, Jerry's shall submit a compliance report which provides details of the specific action it has taken to comply with the commission's decision. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P.O. Box 8126, Madison, Wisconsin 53708. Wis. Stat. § § 111.395, 103.005(11) and (12) provide that every day during which an employer fails to observe and comply with any order of the commission shall constitute a separate and distinct violation of the order and that, for each such violation, the employer shall forfeit not less than $10 nor more than $100 for each offense."
The decision of the administrative law judge (copy attached), as modified, is affirmed.
Dated and mailed February 8, 2008
sultke . rmd : 125 : 9
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
The ALJ summarizes a critical basis for her determination that the respondent, Jerry's Enterprises, Inc., terminated complainant Keresa Sult's employment because it perceived her to be disabled stating:
By late July of 2003, [John] Boogren was obviously still concerned about keeping Sult's medical condition a secret from upper management because he pointedly told her during their telephone conversation that she had to obtain the disability forms she requested from him, rather than from Jerry's corporate office. The ALJ believes that the confluence of Sult's growing concerns about [Wendy] Koca that she addressed with Koca at the meeting she held with her on August 4, 2003, Koca's resulting allegations against Sult that she presented to Boogren in the following days, and Boogren's and [David] Gerdes' perception that they had a key employee on their hands with a disability who was about to request a disability leave, provided Jerry's with a convenient pretext to terminate Sult's employment without having to address her request for an accommodation. The ALJ finds Koca's allegations against Sult to be so outrageous that she does not believe that Boogren, who valued Sult's work ethic and trustworthiness and hardly knew Koca, or Gerdes, to whom Boogren reported regularly about Sult, could have possibly believed that Koca was being truthful. Their failure to investigate Koca's allegations by interviewing other Jerry's employees who reported to Sult or to interview Sult prior to a termination meeting, supports the ALJ's conviction. Finally, the ALJ notes that Jerry's replaced Sult with [Dick] Depies, an employee whom it had terminated less than a year earlier because of performance problems including customer complaints about his violent temper, odor of alcohol and his disparaging remarks about Save-A-Lot.
ALJ decision, p. 22.
David Gerdes is the respondent's vice president of human resources. John Boogren is the respondent's corporate director of retail operations. Boogren reported to Gerdes. Wendy Koca worked as a part time hourly meat and produce manager at the respondent's Portage store. (1) Dick Depies was a former Madison store manager whose employment the respondent had terminated in January 2003.
On appeal, the respondent argues that the ALJ erred in finding that it discharged Sult because of a perceived disability. First, the respondent argues that there was no evidence that Gerdes-the decision maker-believed that Sult had any continued medical issues at the time of her discharge. The respondent argues that while Gerdes was certainly aware that Sult had "some prior medical condition", as he had authorized that she continue to receive full pay during that time, it is "undisputed" he was not aware she had been diagnosed with acute transverse myelitis, or had any information about her prior condition, let alone information that would have suggested the condition continued through August 2003. The respondent argues that indeed, both Boogren and Gerdes believed Sult was fully recovered from her illness and was performing well in her job. The respondent argues that even if Sult had asked Boogren for disability forms in July 2003, there was no evidence that Gerdes was aware of this, or that he had any knowledge regarding her medical condition at the time of her discharge because of Koca's claims.
The respondent's arguments are unpersuasive for several reasons. First, Jackie Sult, the complainant's mother, testified that on April 11, 2003, she called Boogren and told him the complainant was being checked for transverse myelitis and that in a second call to Boogren while the complainant was still in the hospital she told him that they had determined the complainant did have transverse myelitis. Second, Darlene Day, the Madison store meat and perishable manager, corroborated the complainant's testimony about her calling Boogren during July 2003 to obtain medical forms and telling him that she needed to take some time off because of medical issues. Third, Boogren himself admitted that every time he got a phone call about Sult and her condition that he either directly talked to Gerdes personally or gave him a phone call on the update. T. II, 102.
The respondent next argues that even if Gerdes did believe Sult had a disability at the time of discharge, Sult did not present sufficient evidence that she was terminated because of her medical condition. The respondent argues that the ALJ based her ruling on speculation that Boogren did not want management, aside from Gerdes, to know about her medical condition, but this simply does not make sense because Gerdes is the only member of its upper management with oversight over the Save-A-Lot stores. Further, the respondent argues that the ALJ based her ruling that Gerdes' motives were suspect on speculation that Gerdes discharged Sult because he was concerned she would seek additional leave but that this is no motive for discharging Sult because any leave would have been at no cost to the respondent since FMLA leave is unpaid, and disability leave is provided through an insurance policy. In addition, the respondent argues that its treatment of Sult prior to her termination is also contrary to a finding of discrimination since Boogren and Gerdes ensured that she received her full pay for the six weeks she was out of work. The respondent asserts that after her hospitalization Boogren advised Sult that it was fine with the respondent if she needed to come back and work some in small amounts of hours, and that Boogren and Gerdes then continued to grant Sult every request she made for time off to attend doctor appointments without question and without requiring her to take vacation time.
The respondent's arguments fail. First of all, while Gerdes may have had oversight over the Save-A-Lot stores, he did not operate in a vacuum. Gerdes was one of several company officers that also sat on the respondent's board of directors. As Gerdes himself testified, every Monday there is an operations meeting with the officers of the company and "We all are, have involvement in every area." T. II, 244. Second, the respondent's argument that a leave would have been at no cost or provided through an insurance policy misses the point. It was not the financial cost of a leave for Sult that was of concern to the respondent, but the availability of a trusted and highly productive employee to oversee the operations of its stores. Indeed, evidence of the respondent's concern about Sult's availability to oversee the operation of its stores is reflected by Boogren's May 2003 denial of Sult's request for a demotion, and again in July 2003, just weeks prior to her discharge, when in response to Sult's request for medical leave forms, Boogren told her that he needed to get the forms and forbid her from calling the office for the medical leave forms. Third, while the respondent may have supported Sult while she was in the hospital, by allowing her to come back and work some in small amounts of hours and to attend doctors appointments without question or using vacation time, in July 2003 Sult was not just requesting reduced hours or time off to attend doctor's appointments, Sult was requesting a leave from work due to her medical condition.
Next, the respondent argues that it had a legitimate, nondiscriminatory reason for terminating Sult's employment-she violated a company zero tolerance policy-and that Sult cannot show that its articulated reason for terminating her was a pretext for unlawful discrimination.
The respondent argues that Sult's own testimony validates the respondent's decision to discharge her for violating a company zero tolerance policy because Sult admitted that Koca complained that she made her work off the clock, that Koca could have worked off the clock and that forcing an employee to work off the clock is a terminable offense. Further, the respondent argues that for Sult to prevail in her claim of pretext, the fact finder must believe that the following occurred: Koca admitted stealing $1,600.00 but the respondent ignored her confession; Sult suspected Koca of stealing $1,600.00 from the respondent for more than six weeks without taking any steps to investigate or discipline Koca, and permitted Koca unfettered access to the Portage and Madison stores during that entire time; Gerdes and Boogren, despite having a signed confession of store theft, did not have Koca arrested and did not terminate her employment although that was their regular practice; Gerdes and Boogren both lied about seeing the videotape confirmation of Koca's claims of working off the clock; the respondent paid Koca "$3,075" for the time she worked off the clock without pay just to have a reason to terminate Sult; the respondent refused to provide Sult with paperwork regarding disability leave even though it would not have to pay Sult while she was on disability leave and had urged her to take as much time off as she wanted with full pay; and that although Sult admitted Gerdes and Boogren always treated her well and provided her with time off as requested at full pay, on the date of her termination they suddenly turned against her for no reason.
Again, the respondent's arguments fail. The respondent's argument about it not having to pay for a disability leave while Sult was on such a leave and having previously provided Sult time off prior to her July 2003 request for a disability leave is addressed above and need not be repeated again here. Contrary to the respondent's argument, Sult's testimony does not validate the respondent's decision to discharge her. Indeed, Sult emphatically denied forcing Koca to work off the clock (or even implying that she should) in violation of the respondent's zero tolerance policy.
Further, as much as the respondent attempts to make it appear that it reasonably believed that Sult had forced Koca to work off the clock and that it had terminated Sult's employment for that reason, the evidence of record simply does not support the respondent's asserted basis for the adverse action it took against Sult. Several reasons support this conclusion. For example, when Gerdes met with Sult on August 13, he immediately told her he was terminating her employment; that she forced Koca to work off the clock. However, the respondent's decision to terminate Sult was based solely on the allegations by Koca, with whom up to this point Boogren had had very minimal contact and Gerdes had never met before. In sharp contrast, Gerdes and Boogren knew Sult to be an honest, trusted and highly valued employee, and they had never received a single complaint about Sult from any of her employees. Despite this and although there were allegations being made by an employee the respondent hardly knew, the respondent did nothing to evaluate Koca's credibility.
Moreover, the respondent never allowed Sult an opportunity to respond to Koca's allegations nor did it conduct an investigation into Koca's allegations. The respondent did not question Sult about Koca's allegations prior to her termination on August 13; the respondent did not inform Sult what the meeting on August 13 was about prior to meeting with her; the respondent never provided Sult with an opportunity to furnish a written statement or any witnesses who could support her position; and the respondent never allowed Sult to review the store videos that allegedly showed Koca working off the clock, Koca's time cards or the work schedules. Further, the respondent did not investigate Koca's allegations by questioning other employees prior to terminating Sult's employment nor it did verify whether or not Sult was in the store on the days it asserts the store videos showed Koca working off the clock. Indeed, the respondent asserts that it really did not matter whether or not Sult was at the store at the times Koca was allegedly working off the clock because "even if Sult did not know anything about Koca working off the clock, she still deserved to be fired because she was responsible for the operation." In addition, the respondent did not create an investigation file regarding Sult's alleged violation of company policy.
And if the above was not to expose the pretextualness of the respondent's asserted reason for terminating Sult's employment, the evidence also shows that while a termination letter is normally provided to employees being terminated, Sult did not receive a termination letter, and, further, while the respondent's general policy is to not give terminated employees severance pay (particularly someone that has committed an act that she can be terminated for), the respondent provided Sult several weeks of severance pay.
In response to the ALJ's decision comment that Gerdes could not have believed Koca's allegations, the respondent argues that the ALJ seems to have largely based her decision on Koca's credibility at the hearing, during which she admittedly raised a number of allegations she had not revealed earlier, while ignoring "uncontroverted" factors on which Gerdes' decision was based, including: (1) Koca having done more than complain; she had filed an administrative charge under oath; (2) the review of the video and time cards showing that Koca had worked off the clock; and (3) whether or not Sult had actually forced Koca to work off the clock, she failed in her managerial duties to ensure that her subordinates were complying with state and federal wage and hour law. Further, the respondent argues that moreover, the ALJ based her decision on what she thought was reasonable, while the proper analysis is whether Gerdes actually believed Koca's allegations at the time. The respondent argues that the fact that it paid Koca the full amount sought in her wage and hour charge is irrebuttable proof that Gerdes believed Koca's allegations and, similarly, the fact that Gerdes and Boogren took no action against Koca supports their testimony that they had no information regarding Koca's alleged admission to stealing $1600.00 from the respondent.
These arguments by the respondent also fail. Contrary to argument by the respondent, Koca's credibility was simply one of several factors considered by the ALJ in reaching her decision. For example, the ALJ's decision also shows that Gerdes' credibility was a significant factor in reaching her decision. While Gerdes testified that he did not know that Sult had a medical condition, the ALJ specifically found instead that Gerdes perceived Sult to be an individual with a disability. The ALJ's decision further specifically finds Gerdes' testimony about what occurred at the August 13, 2003, termination meeting to be less credible than that of Sult's testimony about what occurred at that meeting. The ALJ's decision also finds, if not explicitly, implicitly, contrary to Gerdes' claims that he was never informed of Sult's request for medical leave documents at the end of July and that he knew nothing about Sult's concerns regarding Koca and $1600.00 missing from a deposit, that Gerdes was aware that Sult was about to request a disability leave in August and that he was aware of Sult's concerns regarding Koca. Another significant factor in the ALJ's decision is about what was not done by the respondent: Gerdes and Boogren's failure to investigate Koca's allegations by interviewing other employees who reported to Sult or interviewing Sult prior to her termination. The ALJ's decision further indicates that other factors she considered were that Sult never received a termination letter and that Gerdes informed her that the respondent would pay her through the end of September.
The ALJ's decision does not ignore Gerdes' asserted bases for his decision to terminate Sult's employment. The ALJ determined, because of the circumstances surrounding Sult's termination, that Gerdes' asserted bases for his decision were unworthy of credence. Proof that the defendant's explanation is unworthy of credence is simply one form of circumstantial evidence that is probative of intentional discrimination, and it may be quite persuasive. Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 147 (2000), citing St. Mary's Honor Center v. Hicks, 509 U.S. 502, 517 (1993).
Contrary to argument by the respondent, the ALJ followed the proper analysis by assessing whether or not Gerdes could have believed Koca's allegations. "A plaintiff may demonstrate his (or her) employer's reason is pretextual, i.e., that it is 'deceit to cover one's tracks,' by showing 'the reason (1) had no basis in fact; (2) did not actually motivate [the adverse employment action]; or (3) was insufficient to motivate [the adverse employment action].' " Davis v. Wis. Dept. of Corrections, 445 F.3d 971, 977 (7th Cir. 2006), citing Davis v. Con-Way Trans. Cent. Express, Inc., 368 F.2d 776, 784 (7th Cir. 2004). The ALJ determined that under the circumstances presented in this case, Koca's allegation that Sult forced her to work off the clock was insufficient to have motivated his decision to terminate Sult's employment and that the actual motivation for the respondent's decision was its perception that they had a key employee on their hands with a disability who was about to request a disability leave.
Finally, for all of the reasons cited above, the respondent's argument that the fact that it paid Koca the full amount sought in her wage charge and that it took no action against her for stealing $1600.00 is entirely unconvincing.
ALJ's award of remedial relief
The ALJ's order of remedial relief includes a requirement that the respondent offer Sult reinstatement to a position comparable to her former position. Her order further requires that the respondent pay Sult what she would have earned from January 1, 2004, (2) until such time she resumes employment with the respondent, or would resume such employment but for her refusal in writing of a valid offer of a comparable position "or at such time it is shown that reinstatement is no longer feasible."
Shortly after the ALJ had issued her non-final decision with the above-stated remedial relief award, the respondent wrote to the ALJ requesting that in her final decision she correct an oversight in the non-final decision. The respondent reminded the ALJ that the respondent's Portage and Madison Save-A-Lot stores were both closed in September 2005 and never reopened, that the Save-A-Lot stores nearest to Sult were in the Milwaukee area and that Sult testified that after her employment was terminated, she did not seek work in the Milwaukee area "because the drive was too much", citing volume 2 of transcript, page 42. The respondent asserted that therefore, reinstatement was no longer feasible as of September 2005 and back pay should stop at that time.
The ALJ addressed the respondent's request in her final decision stating as follows:
At the hearing in this matter, Jerry's presented no evidence regarding the circumstances that lead to it[s] decision to close both the Madison and Portage stores. Consequently, it is not clear to the ALJ that those stores would have closed had Sult continued to manage them rather than Depies. Therefore, the mere fact that the stores closed just over a year after the termination of Sult's employment does not persuade the ALJ that the award of back pay should cease as of the date of the store closings. Additionally, as Attorney Lewis indicated in her letter to the ALJ dated January 5, 2007, the full context of Sult's remark that she did not seek employment in Milwaukee after her termination "because the drive was too much" was the following, "My intention was going back to school, different career, that kind of thing. So I had to find something that was close to MATC." Tr. II at 42: 16-18. The ALJ believes that in the absence of clear evidence that since January 1, 2004, Sult was not physically able to commute to Milwaukee for work, an award of reinstatement is appropriate.
ALJ decision, p. 22.
On appeal, the respondent again argues that any wage loss award should stop in September 2005, when it closed its Madison and Portage stores; that Sult necessarily would have lost her job with the respondent when the Madison and Portage stores were closed in September 2005. The respondent argues that the ALJ's claim that there was no evidence Sult could not physically commute to Milwaukee is irrelevant; Sult's testimony was that she was not willing to work in Milwaukee and this is sufficient to end the back pay period. Further, the respondent argues that the ALJ impermissibly extended the back pay period based on her unsupported speculation that the Portage and Madison stores may not have closed if Sult had remained in charge. The respondent argues that the fact that this argument was "created, out of the whole cloth, by the ALJ is highly disconcerting and indicative of the speculative and arbitrary natures of the ALJ's decision here." [Citing Holmes v. DILHR (Wis. Pers. Comm., 4/15/87) for proposition that no remedy is available where alleged damages are speculative.]
The respondent's arguments fail. First, the evidence does not establish that Sult was unwilling to work in Milwaukee when the Madison and Portage Save-A-Lot stores closed in September 2005. The evidence indicates that after the respondent's termination of Sult's employment, during the summer of 2004, when she was enrolled in school at MATC in Madison to obtain certification as a nursing assistant, she wanted work that was close to MATC. T. I, 42, T II, 161-162. Second, the respondent operates multiple retail food stores in multiple states, as well as hardware store operations, printing operations and a clothing store. As noted by Sult, other managers at her level, like Glen Corvino, were transferred by the respondent to other locations to open and manage different stores in different markets. T. II, 201. (Sult has resided in cities other than Janesville, Wisconsin. She has lived and worked in Medford, Wisconsin. She has lived and worked in South Bend, Indiana.) Furthermore, Sult testified that after her 2003 hospitalization for her medical condition she would have taken a demotion to the position of store manager or even to the position of assistant manager. There is no reason to believe that an experienced and committed manager like Sult would not have several opportunities within the company under a bona fide make-whole evaluation of her reemployment options. Third, given the respondent's lack of evidence regarding the circumstances which led the respondent to close its Madison and Portage stores, together with the fact that the respondent replaced Sult with an individual the respondent had recently discharged because of performance problems including customer complaints about his violent temper, odor of alcohol and his disparaging remarks about the company, it was not unreasonable for the ALJ to opine that the Madison and Portage stores may have stayed open had Sult remained in charge of those stores. In any case, the issue of whether or not these stores would have remained open had Sult remained in charge was not the sole basis for ALJ's failure to end the back pay award in September 2005, but included the fact that there was an absence of clear evidence that since January 1, 2004, Sult was not physically able to commute to Milwaukee for work.
Alternatively, the respondent argues that if not in September 2005, any wage loss award should stop on October 5, 2005, when Sult left her full-time job at Culver's because it was physically too much for her. The respondent argues that Sult's quitting her full-time job at Culver's is evidence that she was no longer able to work full time.
Sult did testify that when she quit Culver's in October 2005, she was again experiencing symptoms that she had while at the respondent in May and July 2003, such as dropping things, falling and a weakness in her legs. However, the respondent's assertion that this is evidence that she was no longer able to work full time is not supported by the record. For example, first of all, Sult's testimony indicates that part of what influenced her decision to quit her employment at Culver's was the manager's unhappiness with her missing work to attend doctor's appointments. T. I, 159. The record is silent as to the availability or feasibility for Sult to have taken a short term leave of absence from Culver's in order to allow her situation to improve. Second, Sult had worked full time for nearly a year at Culver's (in addition to working 20 hours per week for a period of time at another job at the same time) after initially experiencing problems with dropping things, falling and weakness in her legs while employed by the respondent. Third, Sult has continued to seek employment after leaving Culver's and there is no evidence, medical or otherwise, that she is prevented from working full time.
Accordingly, the commission does not agree with the respondent's argument for ending the back pay award on October 5, 2005.
The ALJ determined that an award of $26,796.15 as attorney's fees and an award of $5,825.74 for costs were reasonable for this case.(3) The respondent has not contested the attorney's fees and costs awarded by the ALJ on appeal, and the commission finds no reason to question the reasonableness of the attorney's fees and costs awarded by the ALJ.
Sult has requested the additional amount of $6,468.75 as attorney's fees for services expended (23 attorney additional hours @ $210.00 per hour, plus 21.85 law clerk hours @ $75.00 per hour) to respond to the respondent's appeal of this matter. The respondent has not contested this fee request. This fee request is reasonable. The commission has therefore included this additional requested amount in the award for reasonable attorney's fees.
Attorney Julie A. Lewis
Attorney Jennifer Dellmuth
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(1)( Back ) Apparently Koca's position was actually not that of a manager but this is what meat and produce employees were called.
(2)( Back ) During the last 4 months of 2003, Sult did not look for employment because she was depressed after losing her job and still suffering the effects of her medical condition.
(3)( Back ) The attorney's fees awarded represented a 10 percent reduction due to Sult's failure to prevail on her claim that the respondent failed to reasonably accommodate a disability. The ALJ declined to find that the respondent had a duty to reasonably accommodate a disability given the absence of any competent medical evidence/testimony to establish the permanency of Sult's diagnosis of transverse myelitis.