ELIZABETH A. DONOVAN, Complainant
GRAEBEL VAN LINES INC., Respondent
An Administrative Law Judge for the Equal Rights Division of the Department of Industry, Labor and Human Relations issued a decision in the above-captioned matter on May 25, 1989. Respondent filed a timely petition for review by the Commission and both parties subsequently submitted written arguments.
Based upon a review of the record in its entirety, the Labor and Industry Review Commission issues the following:
1. Respondent Graebel Van Lines, Inc. ("Graebel") is an interstate carrier of household goods with terminals in, among other places, Wausau, Wisconsin.
2. Complainant Elizabeth A. Donovan ("Donovan") was offered a position as claims manager for Graebel by letter dated October 3, 1986. She began her employment as claims manager on October 6, 1986.
3. By letter dated September 24, 1986, William Stafford was offered a position as personnel manager with Graebel. He began his employment with Graebel in that position on October 13, 1986.
4. In the fall of 1987, Graebel's management made a decision that, due to economic conditions, expenses had to be reduced. The decision was made that the savings would be achieved through a reduction in personnel reaching into the management level. Mr. Lee, Graebel's senior vice president and chief finance officer, was given a target figure for the savings he was expected to achieve.
5. At the time of Graebel's decision to reduce expenses by reduction in personnel, Graebel knew that all of the functions of its personnel manager were going to be consolidated into its Denver offices, and that as a result the position of personnel manager Stafford would be eliminated in the near future. Graebel also knew that its need for a claims manager in Wausau would continue.
6. In December 1987, John Koci, Graebel's vice president of operations, decided to terminate Donovan and to give Stafford her position as claims manager.
7. Koci advised Donovan of his decision in a meeting between then, also attended by director of corporate services Judith Kramer, on December 9, 1987. In this meeting, Koci told Donovan that due to economic reasons Graebel was cutting back on staff and that she was being let go. When Donovan asked who would handle claims management, she was told that Stafford would take over as claims manager. When Donovan then asked Koci what he based his decision on, Koci replied that it was "time in grade", and when Donovan asked him for clarification of that reason he explained that Stafford had worked there longer. When Donovan challenged this assertion, Koci responded by indicating that he had made the offer of employment to Stafford earlier although Donovan had actually started employment sooner. Koci gave no other reason for his decision; in particular, he said nothing suggesting that any dissatisfaction with Donovan's performance played any part in the decision.
8. Koci also confirmed his decision to terminate Donovan by a memorandum addressed to her dated December 9, 1987. That memorandum indicated that due to the recent financial performance of the company it was found necessary to reduce manpower and that it would be necessary to terminate Donovan; it further indicated that the company truly appreciated Donovan' s fine efforts on its behalf as manager of the claims department and that it was regrettable that circumstances beyond her control necessitated the termination.
9. In a memorandum to "file" dated December 15, 1987, Koci recapitulated his reasons for deciding to terminate Donovan and to retain Stafford in Donovan's position, and he summarized his meeting with Donovan on December 9, 1987. In this memorandum, Koci reiterated his indication that he felt Donovan was "junior" to Stafford based on dates of offer of hire. He also confirmed his indication that the decision was not performance related.
10. Graebel's Standards and Procedures Manual provides, in its "Employe Handbook--Administrative" section of the "Personnel and Administration" title, that if it is necessary to lay off regular employes for one week or more because of lack or scarcity of work, layoffs will be made on the basis of length of service and type of skills to be retained. No mention is made of dates of offer of employment; however, "job anniversary date" is defined as the date an employe has as their current position start date, and it is further provided that vacation pay entitlement is based on the employe's hire date.
11. Assertions which have been made by and on behalf of Graebel subsequent to Donovan's termination, to the effect that factors considered in terminating Donovan included concerns about her being too close to her subordinates, concerns about a "laissez faire" management style, her difficulty in accepting that style's conflict with Graebel, her resentment at not being included in meetings, complaints by Donovan about conflict with her family life regarding her schedule and babysitters, statements by Donovan that she was thinking of quitting, and the manner in which Donovan made layoff recommendations, were untrue. None of these matters in fact played a part in Koci's decision. An assertion made on behalf of Graebel subsequent to Donovan' s termination, to the effect that the factors considered in terminating Donovan included objections she had made to a requirement that she on occasion wear a telephone pager, were also untrue; this matter did not play a significant role in Koci's decision.
12. An assertion made on behalf of Graebel subsequent to Donovan' s termination, that the termination was based in part on a concern that someone be available to perform personnel manager functions for Graebel between the time of the layoffs and the time at which personnel functions were to be taken over by the Denver office, was untrue; this was not a significant factor in the decision. Graebel was aware that the transfer of personnel functions to Denver was imminent. To the extent that Graebel had any genuine concern about coverage of personnel functions prior to this takeover by the Denver office, it had at least two reasonable options to the termination of Donovan, those being the postponement of Stafford' s layoff until the personnel function was actually eliminated, or the retention of Donovan with the personnel functions to be performed by her during the hiatus period. This latter option would have suggested itself to an unbiased employer as an obvious possibility given the fact that Donovan's claims manager position was going to be continuing and the fact that Donovan herself had ten years of experience in personnel, as a personnel research analyst, a coordinator of recruiting and placement, and most recently as a personnel manager for Wausau Insurance Company in Wausau.
13. An assertion made on behalf of Graebel subsequent to Donovan' s termination, to the effect that one factor in the decision to terminate Donovan was that Stafford had been involved in a process of obtaining a new telephone system for Graebel, is untrue. Stafford did not have sole responsibility for the installation of this system, but was merely one member of a task force, composed of a number of managers, set up to oversee the change in the telephone and telecommunications system. Given that Stafford had no prior experience in the selection of telephone and telecommunications systems, and that he was merely one member of a managerial task force charged with responsibility for seeing to the change to the new system, it is not reasonable to believe that Graebel genuinely considered that his retention was so central to the completion of this one-time, temporary function that it justified the elimination of another regular managerial employe whose position was continuing, and the substitution of Stafford for her.
14. The assertion that Koci decided to retain Stafford and terminate Donovan because of "time in grade," is not true. Koci had an absolute preference for Stafford, and he had a predetermined intention to retain him as an employe based on that preference, irrespective of other considerations. The assertion that Stafford was preferred due to "time in grade" or due to the date of the offer of employment to Stafford as compared to the date of the offer of employment to Donovan, was a pretext used by Koci to explain his decision to Donovan without having to explain the actual reasons for his preference for Stafford, and without having to assert other reasons, such as alleged dissatisfaction with Donovan' s performance, that were not only untrue but that also could not have been credibly supported by Koci had Donovan challenged them.
15. Donovan' s sex was a determining factor in the decision by Graebel to terminate her.
Based on the Findings of Fact made above, the Commission makes the following:
1. The Respondent, Graebel Van Lines, Inc., is an employer within the meaning of the Wisconsin Fair Employment Act.
2. Graebel discriminated against Elizabeth Donovan because of her sex, in violation of the Wisconsin Fair Employment Act, when it terminated her employment on December 9, 1987.
Based on the Findings of Fact and Conclusions of Law made above, the Commission makes the following:
1. That Graebel cease and desist from discriminating against Donovan because of her sex.
2. That Graebel offer Donovan a position as claims manager under the same terms and conditions as those existing on December 3, 1987. This offer is to be made in writing within 30 days of the date of this Order and shall be either accepted or refused in writing within ten days of its receipt. In the event that Donovan refuses or fails to respond to the offer of reinstatement, she shall be deemed to have refused the offer of reinstatement as of the date on which it was made. It is specifically intended by this order that the rate of pay offered Donovan on reinstatement shall reflect any increases in pay which Donovan would have received had her employment continued without interruption to the date of reinstatement, and that any employment benefits, the right to which or the amount of which is based on time in service as an employe, shall be computed for Donovan as if she had been employed without interruption to the date of reinstatement.
3. That Graebel make Donavan whole for all losses in pay and benefits that Donovan has suffered by reason of Graebel' s unlawful conduct by paying Donovan the sum she would have earned as an employe from December 9, 1987 until such time as Donovan is reinstated or refuses reinstatement, as the case may be. The back pay order herein shall be computed on a calendar quarter basis with offsets for interim earnings during each calendar quarter. Any unemployment compensation or welfare benefits received by Donovan during the back pay period shall not reduce the amount of back pay otherwise allowable, but shall be withheld by Graebel and paid to the Unemployment Compensation Reserve Fund or the applicable welfare agency. Any 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 Donovan's name and Social Security number. Additionally, the amount payable to Donovan after all statutory setoffs shall be increased by interest at the rate of 12 percent, simple (not compound). Interest shall be computed as follows: For each calendar quarter in the back pay period, the net amount of back pay due for that quarter (which shall be equal to the total amounts Donovan would have earned in that quarter as an employe of Graebel less actual earnings from other employment during that quarter and any unemployment compensation or welfare benefits receiving during that quarter) shall be computed. Interest shall be computed for each such amount from the last day of each such calendar quarter to the day of payment. The check for back pay should include on its face Donovan's name and Social Security number and the case number with the initials ERD.
4. That Respondent pay the sum of $5,139.34 as Complainant' s attorney' s fees and costs in this matter. This sum shall be paid by check made payable jointly to Complainant and Attorney Brady and delivered to Attorney Brady.
5. That Respondent shall within 30 days of the expiration of time within which an appeal may be taken herein, submit a compliance report detailing the specific action taken to comply with the Commission's Order. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P. 0. Box 8126, Madison, Wisconsin 53708.
Dated and mailed May 23, 1990
/s/ Kevin C. Potter, Chairperson
Carl W. Thompson, Commissioner
/s/ Pamela I. Anderson, Commissioner
This case concerns the decision by Graebel Van Lines to terminate Elizabeth Donovan, its claims manager, and to give her job to William Stafford, Graebel's personnel manager. Graebel faced the necessity of personnel reductions to cut expenses, and contemporaneously with this a corporate decision was reached to consolidate all personnel functions in Denver office, as a result of which Stafford's position of personnel manager was going to be eliminated shortly after the point at which Graebel had decided to make personnel reductions. Although cuts in personnel were needed, and although Stafford' s position was being eliminated, Graebel did not take what would have appeared to be the obvious step of terminating Stafford. Instead, it terminated Donovan, whose position as claims manager was one which Graebel knew was going to have to continue, and it gave Stafford her job. Donovan asserts that her sex was a determining factor in Graebel's decision to terminate her, rather than. Stafford. Graebel denies this.
A prima facie case of discrimination in discharge can be proven by establishing that Complainant was a member of a protected, class, that she was qualified for the job she was performing, that she was terminated, and that she was replaced by someone who was not within the protected class. See, Puetz Motor Sales, Inc. v. LIRC, 126 Wis. 2d 168, 173 (Ct. App. 1985). Donovan clearly established a prima facie case of discrimination based on sex. The burden then passed to Graebel to articulate, by admissible evidence, a legitimate nondiscriminatory reason for its actions. Puetz, supra, 126 Wis. 2d at 172, Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 254, 101 S.Ct. 1089 (1981). By the introduction of testimony and exhibits at the hearing in this matter, Graebel did articulate a number of facially neutral reasons for its decision to terminate Donovan. It then became the burden of the Complainant to prove, by a preponderance of the evidence, that the reasons articulated by Graebel were merely a pretext for discrimination. Puetz, 126 Wis. 2d at 172, McDonnell Douglas Corp. v. Green, 411 U.S. 792, 804-05, 93 5. Ct. 1817 (1973). The issue in this case is whether she has done so. The Commission concludes that she has.
The contention that Koci preferred Stafford over Donovan because of "time in grade" is not credible. Donovan had worked for Graebel longer than Stafford. Koci's "fallback" position on this issue, that he looked at "time in grade" based on date of offer of employment, is also considered by the Commission not to be credible. For one thing, the Commission accepts the testimony of the employe that when Koci first gave Donovan the reason of "time in grade" in the discharge meeting, he explained it by asserting that Stafford had worked there longer. He adopted his "date of offer of employment" rationale only when Donovan pointed out that he was incorrect as to length of service. For another thing, nothing in Graebel 's Standards and Procedures Manual (or any other document used by Graebel, such as the "Employe Master File Sheet") appears to recognize any significance in date of offer of employment, while there are indications in the Standards and Procedures Manual that "position start date" is significant and that "length of service" is to be a determining factor in layoff.
The assertion that Stafford was preferred over Donovan because of alleged short comings in Donovan' s performance was also considered by the Commission not to be credible. It is clear to the point of obviousness in the record that these matters were not considered by the decision-maker, Koci, and that they have only been advanced post hoc during the course of investigation into and litigation of Donovan's claim. Koci not only failed to affirmatively assert any performance-related considerations as reasons for his decision at the time thereof, but he affirmatively disclaimed them to Donovan and in his memo to "file." Contradicting the importance which was laid upon these allegations of performance problems in the letter from Graebel's counsel to the Equal Rights Division during the course of the investigation, Koci expressly disclaimed reliance on the great majority of those factors in his testimony at hearing. Even in the face of persistent efforts by counsel for Graebel to elicit complaints from Koci about Donovan's performance by way of leading questions, see Transcript, pp. 68, 70, 71, Koci's testimony as to the significance of performance problems in his decision was, at best, ambivalent.
Graebel has argued, in reliance on Logue v. International Rehab. Associates, Inc., 837 F.2d 150, 155 (4th Cir. 1988), 45 EPD par. 37,711, that the fact that an employer articulates several alternative, independent, legitimate nondiscriminatory reasons one of which is determined to be false does not necessarily justify finding the remaining articulate reasons pretextual. However, the fact that advancing a false reason "does not necessarily justify" finding the remaining reasons pretextual, does not mean that it cannot be taken into account. In Logue, the court noted that a plaintiff may establish pretext simply by showing that the defendant's articulated reason is unworthy of credence, and it noted that the fact-finder has the discretion to evaluate the credibility of witnesses. In a footnote to the proposition for which Respondent cites Logue, the court in that case noted that the district court had rightfully concluded that sane of the employer' s asserted reasons for firing the employe were beyond credence, and it stated that it was "therefore understandable that the court was suspicious of the employer's motives." The reversal in Logue resulted primarily from a judgment on the part of the court of appeals, that the district court did not even consider the remaining assertions by the employer. Logue does not stand for the proposition that the assertion of demonstrably false reasons for an employment action may not even be taken into account in the overall process of considering all of the evidence to determine whether the other reasons are pretextual or not. On the contrary, it offers some support for the proposition that advancing a false justification for an employment action can, where the viability of all the proffered reasons is considered, constitute sane evidence of the presence of an impermissible motivation. See also, Blowers v. Lawyers' Cooperative Publishing Co. (W.D. N.Y., 1981), 27 EPD par. 32,284 at p. 22,990. The Commission considers that Graebel' s assertions that the decision to terminate Donovan was related to perceived deficiencies in her performance, were demonstrably false, that being evidenced if by nothing other than Kocil's virtually total disclaimer at hearing of any reliance on such factors. Additionally, the assertion by Koci that he preferred Stafford because he had worked for Graebel longer was also demonstrably false. While the Commission has considered the other reasons advanced by the employer, it concludes that the employer's assertion of these false reasons is at least some evidence that an impermissible motive was actually present. The Commission found unconvincing the assertion by Graebel, that Stafford was preferred because of his involvement in the changeover in Graebel ' s telecommunications system. Both Stafford and Graebel appear to have overstated the importance of Stafford in this process. He was simply one member of a task force that was addressing the matter. Additionally, and most significantly, the failure of Graebel to assert this as a factor in the decision until long after it had adopted a position of reliance on other reasons, suggests that it is pretextual.
The Commission also found unconvincing, the assertion that the need to have personnel functions covered during the hiatus between the December 1987 layoffs and the transfer of personnel functions to Denver was a factor of any significance in the decision. The Commission is satisfied that Koci and Graebel were well aware that the transfer of personnel functions to Denver was imminent, and that the hiatus period was therefore not likely to be lengthy.. Significant in this conclusion is the evidence of inconsistency in claims by Graebel s witnesses as to the length of that hiatus. Stafford testified that it was during a period of six weeks to two months after his termination that he continued to perform these personnel functions before they were taken over by Denver (Transcript, p. 20), but then he subsequently testified that it was a period of two to three months (Transcript, p. 84), and he was then successfully impeached by reference to testimony at his deposition that it was a period of only two to four weeks (Transcript, p. 85). Koci testified that it was a period of almost 60 days (Transcript, p. 17), but he also testified to "a period of time until we determined what was going to be happening exactly with that function," without specifying a length of time (Transcript, p. 64). Also, Donovan testified that in the discharge meeting, Koci told her that Joy VandenHeuvel, from the Denver office, was planning to come to take over the personnel function. Although Koci had testified earlier in the hearing, that: he was not aware of this fact on December 9, when he later testified after Donovan he did not contradict her testimony with respect to what was said in the discharge, meeting; he simply indicated that: he might have said that Joy would be involved, that he never said she was coming to Wausau, that he didn't know that at the time, but that he did not really remember what he said respecting the matter at the discharge meeting. As the Commission has found, Donovan's experience clearly qualified her to perform personnel functions. Whether or not (as reflected by the original decision, to hire Stafford rather than Donovan for the position of personnel manager) Graebel thought that Stafford was superior when it came to personnel management abilities, the fact remains that what was at issue was not a permanent job as a personnel manager but a need to have personnel functions attended to for a very limited period. The idea that it was so necessary to have Stafford rather than Donovan perform this short-term personnel function, that Donovan would be terminated from her permanent and continuing claims manager job so that Stafford would have something to do after he finished the personnel function, is such an unreasonable one that it leads the Commission to infer that this would not have been a genuine motivation on the part of the Respondent.
For these reasons, the Commission concluded that the reasons asserted by Graebel were pretextual, and that Koci' s unequivocal intention to retain Stafford in the company, see Transcript p. 63, at the expense of Donovan, was substantially determined by the fact that Stafford was a man while Donovan was a woman.
The Administrative Law Judge' s Order provided that if Donovan refused or failed to respond to the offer of reinstatement which he ordered, she would be deemed to have refused reinstatement "as of the date of this [i.e., the Administrative Law Judge's] Order." The Commission has modified this to provide that actual or constructive refusal of reinstatement will be deemed effective as of the date of the reinstatement offer. Depending on the number of appeals taken, the offer of reinstatement may not be made until years after the date of the Administrative Law Judge's Order. (It has already been approximately one year.) If Donovan declines reinstatement as a result of reasons that developed long after the date of the Order, she would be unfairly deprived of back pay entitlement by the Order's requirement that the refusal be considered retroactive. The Commission considers it more equitable to place on the wrongdoer the obligation to remedy its wrong until such time as the employe declines that remedy.
ATTORNEY' S FEES
In her brief to the Commission, Donovan sought additional attorney's fees of $1,105.70 for ten hours of attorney time at $100 an hour, plus $105.70 in costs, incurred in connection with the appeal. In its reply brief, the Respondent raised no objection to these amounts. Finding that they are reasonable, the Commission has allowed them.
The Commission has modified the order of the Administrative Law Judge with respect to attorney's fees to allow 3.4 hours of time, disallowed by the Administrative Law Judge, expended in connection with preparation of the fee petition. The Administrative Law Judge excluded these hours, apparently on his own motion, because they related to the request for fees and not to "assisting the Complainant in her claim against the Respondent." The Commission concludes that the Administrative Law Judge erred as a matter of law in this respect. It is well established that an attorney' s time spent in establishing entitlement to fees is itself normally recoverable. Laffey v. Northwest Airlines, 572 F. Supp. 354, 32 FEP 770 (D.D.C. 1983), affirmed in relevant part 746 F.2d 4, 35 PEP 1609 (D.C. Cir. 1984), Coulter v. Tennessee, 805 F.2d 146, 42 PEP 305 (6th Cir. 1986), cert. denied 482 U.S. 914, 107 S.Ct. 3186, 96 L.Ed.2d 674 (1987), Manhart v. City of Los nge1es Dept. of Water, 652 F.2d 904, 909, 26 FEP 721 (9th Cir. 1981), Johnson v. University College, 706 F.2d 1205, 31 PEP 1744 (11th Cir. 1983), cert. denied 464 U.S. 994, 104 S.Ct. 489, 78 L.Ed.2d 684, 33 FEP 440 (1983).
NOTE: The Commission had no disagreement with the material findings of fact of the Administrative Law Judge, and has issued its own decision merely in order to set forth. more fully the basis on which it determined to arrive at the same result on the issue of liability. The Commission's modification of aspects of the remedial order reflects a different view of fundamentally legal issues.
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Ed. Note: This decision is shown as affected by a corrective amendment made on June 8, 1990.