VICTOR E BETHKE, Complainant
VIRCHOW KRAUSE & CO, 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 conclusion in that decision as its own.
The decision of the administrative law judge (copy attached) is affirmed.
Dated and mailed January 29, 2010
bethkvi . rsd : 125 : 9
James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
This case arises from a complaint of discrimination that Victor Bethke filed against the respondent with the Equal Rights Division on June 16, 2006. Apparently, the respondent provides accounting and tax services and employed Bethke as a senior manager. In the complaint Bethke alleged that the respondent discriminated against him on the basis of age with respect to various alleged actions taken against him during his employment, with respect to his termination of employment on August 19, 2005, and when after his termination of employment the respondent mailed a letter to his clients dated September 6, 2005, announcing his retirement.
An equal rights officer (ERO) for the ERD issued a Preliminary Determination and Order on December 15, 2006, dismissing Bethke's complaint for not meeting the timeliness requirements under the Fair Employment Act. Bethke filed an appeal.
The Wisconsin Fair Employment Act provides, in relevant part, as follows:
"The department may receive and investigate a complaint charging discrimination...in a particular case if the complaint is filed with the department no more than 300 days after the alleged discrimination...occurred...."
Wis. Stat. § 111.39(1).
In a decision issued on May 23, 2007, an ALJ for the ERD noted that Bethke's allegation that he was "fired" on August 19, 2005, and all the other allegations that occurred during his employment and prior to August 19, 2005, occurred more than 300 days prior to Bethke's filing of a complaint on June 16, 2006. (1)
In the May 23, 2007 decision, the ALJ quoted part of the commission's discussion in Lau v. Latec Credit Union (LIRC, 02/07/03), regarding the United States Supreme Court's decision in Amtrak v. Morgan, 536 U.S. 101, 122 S. Ct. 2061 (2002). Quoting from Lau, the ALJ stated, in part, as follows:
Discrete employment actions are not susceptible to application of the continuing violation doctrine regardless of whether they are related in some way to employment actions which took place during the actionable period. Amtrak v. Morgan, (citations and footnote omitted).
The U. S. Supreme Court's decision in Amtrak v. Morgan clarified the state of the law regarding the continuing violation doctrine's application in equal rights cases. In this decision, the Supreme Court identifies two classes of employment actions, i.e., discrete acts and harassing acts underlying hostile work environment claims, and holds that discrete acts are generally not subject to application of the continuing violation doctrine but harassing acts generally are. In its decision, the Court identified the following as examples of discrete acts: termination, failure to promote, denial of transfer, refusal to hire, denial of training, written counselings, award of compensation.
Based upon the above, the ALJ concluded as follows:
The Complainant's own allegations indicate that the alleged termination (or forced retirement) occurred on August 19 of 2005. Consequently, the "Discrimination Complaint" that was filed on June 16 of 2005 was too late for the termination (forced retirement) allegation. Had the termination (forced retirement) claim been filed on time, the Complainant could have attempted to argue that some or all of the allegations of discrimination that occurred during his employment and prior to August 19 of 200 were part of a continuing violation. However, the Complainant did not file the termination (forced retirement[)] claim on time and thus also has forfeited any argument that he may have had that the allegations of discrimination that occurred prior to August 19 of 2005 were part of a continuing violation.
Thus, the only claim that the Complainant may proceed on is a claim of whether the correspondence allegedly sent out by the Respondent on September 6 of 2005 to the Complainant's client base constituted discrimination against the Complainant on the basis of age. While the discrimination occurred after the Complainant's alleged termination (forced retirement), it nevertheless is a viable claim and may be pursued just as a claim of discrimination may be pursued in cases where an employer gives a discriminatory or retaliatory job reference after an employee has been terminated. (Bold text added.)
Accordingly, the ALJ affirmed the Preliminary Determination and Order's dismissal of Bethke's complaint claims regarding his termination on August 19, 2005, and all the other allegations that occurred during his employment prior to August 19, 2005, but reversed the Preliminary Determination and Order's holding regarding Bethke's claim about the respondent sending correspondence to his clients dated September 6, 2005, announcing his retirement, and remanded that matter to the investigative unit for further investigation.
The May 23, 2007 decision issued included a notice of appeal rights stating that the decision could be appealed to LIRC. Subsequently, on June 1, 2007, the ERD issued a corrected notice regarding appeal rights, which essentially informed the parties that no appeal could be taken in the matter until a final determination had been issued on the entire case.
By letter to the ALJ dated June 4, 2007, the respondent sought clarification of the June 1, 2007 notice. The respondent indicated that if the June 1 notice meant that no appeal could be taken from the ALJ's decision which reversed and remanded part of the Preliminary Determination and Order, the respondent was requesting that prior to the remand that the ALJ reconsider that part of his decision in light of the recently issued U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007).
In a letter to the parties dated June 13, 2007, the ALJ informed the parties that his May 23, 2007 decision mistakenly advised the parties about appeal rights to LIRC; that this decision was not a final decision which had disposed of the entire complaint. Further, the ALJ advised the parties that since the matter was currently pending in the investigative unit, the respondent could make its arguments regarding the Ledbetter case there, and also, that if at some point the case came back to the Hearing and Mediation Section, the respondent could make its argument to the ALJ then assigned to the case.
On October 26, 2007, the ERO issued an Initial Determination on Bethke's complaint. In this determination, the ERO recounts many of the findings that were made in the original Preliminary Determination and Order, and identified the purpose for the matter being remanded. In the Initial Determination the ERO decided that there was no probable cause to believe the respondent violated the WFEA by "terminating the employment of the Complainant because of age" or by "discriminating against the Complainant in terms and conditions of employment because of age".
On November 15, 2007, Bethke filed an appeal of the October 26, 2007 Initial Determination.
On November 16, 2007, the ERD issued a notice to the parties stating that the case was certified to hearing.
Subsequently, in a letter to the ERD dated December 5, 2007, the respondent requested that no hearing date be set until the timeliness issue had been revisited, and that a briefing schedule be issued. The respondent noted the ALJ's initial denial of the respondent's request for reconsideration of the ALJ's May 23, 2007 decision (in light of Ledbetter) allowing Bethke to proceed on his claim regarding the respondent's September 6, 2005 correspondence sent to Bethke's clients and the ALJ's statement that the respondent could make its argument should the case come back to the Hearing and Mediation Section.
The matter was assigned to a second ALJ of the ERD and the parties submitted written arguments to this ALJ.
In written argument submitted to the second ALJ, the respondent argued, in pertinent part, that:
Ledbetter...interpreted Morgan as meaning that "current effects alone cannot breathe life into prior, uncharged discrimination," and that a person alleging discrimination "cannot shift forward the intent associated with prior discriminatory acts.... A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent, non-discriminatory acts that entail adverse effects resulting from the past discrimination." Ledbetter, [550 U.S. 618, 628-629].
In this case, the "uncharged discrimination" consists of a decision to terminate the Complainant's employment as senior manager with Virchow Krause that fell outside the limitations period. Under Ledbetter, the point in time when this decision was announced to the Complainant was the time at which any alleged discriminatory intent was exercised. Id. The September 6, 2005, letter announcing that the Complainant had retired merely implements the earlier decision. As a matter of law, no new discriminatory intent can be inferred from the characterization of this prior decision as a retirement, even if the underlying decision was unlawful discrimination. Conduct during the 300-day charging period that merely gives effect to prior discriminatory conduct outside the charging period has, in itself, 'no present legal consequences.' " Id. at [628-629].
Ledbetter cites Delaware State College v. Ricks, 449 U.S. 250 (1980) for the proposition that the alleged discriminatory intent possessed by a college when it denied an employee tenure could be attached to a subsequent act of terminating the plaintiff's employment when his contract ran out. The only applicable discrimination occurred before the limitations period commenced when the tenure decision was made and communicated. No independent discrimination occurred when the plaintiff's contract was allowed to expire. Ledbetter, citing Ricks, 449 U.S. at 258.
This case is similar to Ricks and distinguishable from the "discriminatory reference letter" referred to by ALJ Lawent.... The decision to terminate itself may or may not be discriminatory, and an independent decision later to give a reference letter may be either discriminatory or retaliatory, depending on the circumstances. However, if the letter is given in connection with the initial termination decision, then under Ledbetter, it would constitute mere subsequent "effects," and would have no "present legal consequences," even if it fell within the charging period.
In this case, the letter sent to clients that merely characterizes a prior termination decision has no independent legal effect; it flows incidentally from the initial discriminatory act...The correspondence at issue here is not a discrete act in the way it might have been if it had been issued subsequent to -- and independently of -- the termination, either at the Complainant's request or the request of a prospective employer. In such a case, the letter would not be merely incident to the underlying alleged discriminatory act (nor would it even depend on the underlying action being discriminatory), and thus could be considered a discrete action for application of the limitations period. That is not the case with the September 6, 2005, letter at issue in this case, which was merely part of the overall plan to effectuate the decision to terminate the Complainant's employment. (Bold text added; Italicization emphasis in original.)
In response to respondent's arguments, Bethke asserted, in relevant part, as follows:
My appeal was not for back wages as [the respondent] argues in citing Ledbetter v. Goodyear Tire & Rubber Co., Inc. but related to discriminating acts which occurred with the mailing of the letter to my clients of September 6, 2005. In that letter, signed by Todd Hagedorn, it was stated I had decided to retire. This was a lie as they had fired me. And, even though this letter was "merely a part of the overall plan to effectuate the decision to terminate my employment", it effectively ended my career as a CPA. (Bold text added.)
In reply, the respondent argued, in relevant part, as follows:
Mr. Bethke essentially concedes in paragraph 2 of his letter that the letter sent to clients announcing his retirement merely effectuated a decision that was made outside the applicable statute of limitations. Thus, under the Ledbetter decision, Mr. Bethke cannot shift forward the intent of the prior alleged discrimination. Mr. Bethke does not detail how this letter constituted a separate act of discrimination other than that he claims the letter "effectively ended [his] career as a CPA." Leaving aside for the moment that this is a fact not in evidence, he does not articulate exactly how the letter supposedly ended his career as a CPA or how the outcome might have been different had the letter said something else, for example, that he was "terminated," as he claims. Thus, Mr. Bethke has not made a legally significant argument that characterizing his termination as a retirement had any detrimental effect beyond the kind of post-discrimination actions discussed in Ledbetter or the cases cited therein.
The ALJ issued a decision dismissing Bethke's "complaint". (Technically, however, the ALJ's decision only dismissed Bethke's complaint allegation regarding the September 6, 2005 letter to his clients. The other allegations of Bethke's complaint were previously dismissed by the first ALJ.) After briefly setting forth the procedural history of the case and the arguments made by the parties, the ALJ made the following determination:
The holding in Ledbetter, supra, addresses this very issue and disposes of Bethke's argument. An act (the letter) that merely effectuates a prior discriminatory decision does not create a new claim. The letter is announcement of VKC's earlier decision to terminate Bethke's employment. It was not a discrete act of discrimination and was, therefore, untimely.
In his petition for commission review, stating that he wishes to appeal the ALJ's decision, Bethke asserts as reason for his appeal the following:
1. Lilly Ledbetter Fair Pay Act of 2009 signed into law January 29, 2009.
2. The facts of this case have never been investigated.
3. The complaint was mailed on June 14, 2006, Certified, with a request for a return receipt. The Equal Rights Division dated it received on June 16, 2006. Doesn't DWD 218.25 Wis. Adm. Code apply, or the "mail box' rule?
Bethke's assertions on appeal fail to provide a reason as to why this matter should not be dismissed.
In Ledbetter, the essence of the U.S. Supreme Court's decision was that a plaintiff who alleges that he or she is paid less today than a person of the opposite sex because, during an earlier period of time (outside of Title VII's limitation period), the plaintiff was denied appropriate salary increases on account of the plaintiff's sex, does not state a claim cognizable under Title VII; specifically, that each paycheck the plaintiff receives reflecting compensation the plaintiff asserts is less than it would be but for past discrimination does not constitute an actionable wrong.
The Lilly Ledbetter Fair Employment Act was signed into law by President Obama on January 29, 2009. Congress passed the Lilly Ledbetter Fair Pay Act of 2009 to amend Title VII, the ADEA, the ADA and the Rehabilitation Act of 1973 to:
[C]larify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes. Public Law 111-2, 111th Congress.
The LLFPA provides in relevant part as follows:
Congress finds the following:
(1) The Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades. The Ledbetter decision undermines those statutory protections by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions or other practices, contrary to the intent of Congress....
Section 706(e) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5(e)) [i.e., Title VII] is amended by adding at the end the following:
(3)(A) For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.
First of all, since what Congress was reacting to regarding the U.S. Supreme Court's decision in Ledbetter was the U.S. Supreme Court's decision that each paycheck the plaintiff received reflecting compensation the plaintiff asserted was less than it would be but for past discrimination did not constitute an actionable wrong, and that Bethke has conceded that his appeal is "not for back wages", the result is that the LLFPA has no relevance to his claim of discrimination.
The case law since enactment of the LLFPA has held that timeliness issues with respect to discrete acts of discrimination that do not involve issues of compensation continue to be controlled by the law as it existed before the LLFPA. For instance, in Joseph v. Commonwealth of Pennsylvania, Dept. of Environmental Protection, 2009 U.S. Dist. LEXIS 107136 (D.C. E. D. Pa., November 16, 2009), the court stated, in relevant part, as follows:
The FPA's "purpose was to reinstate the law regarding the timeliness of pay compensation claims as it was prior to the Ledbetter decision, which Congress believed undermined statutory protections against compensation discrimination by unduly restricting the time period in which victims could challenge and recover for discriminatory compensation decisions." (Internal citation omitted; Italicization emphasis in original.) In her dissent to the Ledbetter decision, Justice Ginsburg explained the difference between compensation claims and discrete acts of discrimination:
Pay disparities often occur...in small increments; cause to suspect that discrimination is at work develops only over time. Comparative pay information, moreover, is often hidden from the employee's view. Employers may keep under wraps the pay differentials maintained among supervisors, no less the reasons for those differentials. Small initial discrepancies may not be seen as meet (sic) for a federal case, particularly when the employee, trying to succeed in a nontraditional environment, is averse to making waves.
Pay disparities are thus significantly different from adverse actions "such as termination, failure to promote,... or refusal to hire," all involving fully communicated discrete acts, "easy to identify" as discriminatory....
The realities of the workplace reveal why [compensation discrimination] does not fit within the category of singular discrete acts "easy to identify." A worker knows immediately if she is denied a promotion or transfer, if she is fired or refused employment. And promotions, transfers, hirings, and firings are generally public events, known to co-workers. When an employer makes a decision of such open and definitive character, an employee can immediately seek out an explanation and evaluate it for pretext. Compensation disparities, in contrast, are often hidden from sight.
...Joseph provides no authority to support his implied assumption that a failure to hire constitutes a compensation decision. Therefore, the Ledbetter Act is inapplicable to Joseph's claims of discrimination based on defendant's failure to hire him.
The following quote from Pete Lareau's commentary, Lareau on Aftermath of Lilly Ledbetter Fair Pay Act: 2009 Emerging Issues 3783, June 16, 2009, Copyright 2009, Matthew Bender & Company, Inc., confirms that this is what the courts are saying, and also points out what issues remain:
The Fair Pay Act of 2009 only affects the Ledbetter decision with respect to the timeliness of discriminatory compensation claims. The more general rule announced in Ledbetter -- that the charging period is triggered when a discrete unlawful practice takes place -- reaffirmed the principles set forth in Ricks and Morgan. Courts have applied this rule, as well as the rule that a plaintiff may not sue for a prior discriminatory act outside the charging period based on the continuing effects of that act into the charging period, to other types of discrimination claims not involving compensation. The rule set out in Ledbetter and prior cases -- that current effects alone cannot breathe new life into prior uncharged discrimination -- is still binding law for Title VII disparate treatment cases involving discrete acts other than pay. [Citing, in n. 36, Leach v. Baylor College of Medicine, 2008 U.S. Dist. LEXIS 11845 (S.D. Tex. February 17, 2009.]
The legal principle enunciated in the language quoted [hyphenated in this opinion] above has been applied in numerous other cases (all of which have quoted the above excerpt), including cases involving claims of unlawful retaliation under Title VII [Citing, in n. 37, Richards v. Johnson & Johnson, Inc., 2009 U.S. Dist. LEXIS 46117 (D. N.J. June 2, 2009], unlawful failure to promote [Citing, in n. 38, Rowland v. CertainTeed Corporation, 2009 U.S. Dist. LEXIS 43706 (E.D. Pa., May 21, 2009], unlawful denial of tenure [Citing, in n. 39, Gentry v. Jackson State University, 2009 U.S. Dist. LEXIS 35271 (S.D. Miss. Apr. 17, 2009], and unlawful retaliation under the Family Medical and Leave Act [Citing, in n. 40, Maher v. Int'l Paper Co., 600 F. Supp. 2d 940 (W.D. Mich. 2009).
While it appears clear that the LLFPA applies only to discriminatory compensation claims, the question still exists as to what may be considered a claim of discriminatory compensation. Further, it appears that the decisions of some courts, holding that the LLFPA was not applicable because of the lack of a discrimination claim were either incorrectly decided or required too much pleading specificity.
What is clear in the instant case, however, is that Bethke has conceded that his claim is not a discriminatory compensation claim and that the September 6, 2005 letter was "merely a part of the overall plan to effectuate the decision to terminate [his] employment". That being conceded by Bethke, as noted in the commentary by Pete Lareau, "The rule set out in Ledbetter and prior cases -- that current effects alone cannot breathe new life into prior uncharged discrimination -- is still binding law" for his termination claim.
Bethke's second assertion that the "facts of this case have never been investigated" also fails. Bethke's entire discrimination complaint was initially dismissed pursuant to Wis. Admin. Code § DWD 218.05. Where the department has determined that a complaint was not filed within the time period set forth in the Act (i.e., the 300-day limitations period), the department is required to issue a preliminary determination dismissing the complaint. See § § 218.05(1)(d) and (2). The department, pursuant to authority under § DWD 218.05 dismissed Bethke's complaint in a Preliminary Determination and Order issued on December 15, 2006. Bethke appealed that determination as provided under § DWD 218.05(3), and, after review, an ALJ of the Division affirmed the Preliminary Determination and Order in all respects, except for Bethke's claim about the September 6, 2005 letter by the respondent announcing his retirement, which the ALJ ordered remanded for investigation.
The case file indicates that Bethke's claim about the September 6, 2005 letter was investigated. It shows that pursuant to the first ALJ's remand order, the equal rights officer (ERO) requested evidence from the respondent regarding its practice of sending letters to the clients of employees whose employment had ceased. Subsequently, on October 26, 2007, the ERO issued an Initial Determination finding no probable cause to believe that the respondent had violated the WFEA. Bethke then filed an appeal from the Initial Determination on November 15, 2007, and on November 16, 2007, the ERD issued a notice to the parties certifying the matter to hearing. However, by letter dated December 5, 2007, the respondent requested that no hearing date be set in the matter until the issue of timeliness had been revisited, and that the ERD establish a briefing schedule. Following the close of the briefing schedule, a second ALJ issued a decision indicating that the September 6, 2005 letter merely effectuated a prior alleged discriminatory decision and did not create a new claim, and dismissed Bethke's complaint.
If, by asserting that "The facts of this case have never been investigated", Bethke is asserting that a hearing should have been held to present "facts" regarding the September 6, 2005 letter, Bethke's assertion is incorrect. Section DWD 218.10 provides that following certification of a case to hearing a complaint may be dismissed based upon the conditions set forth in § DWD 218.05(1), which include, among other things, whether the complaint states a claim for relief under the Act and whether the complaint was filed within the time period set forth in the Act. Although the September 6 letter falls within the 300-day limitations period, as noted above, the rule set out in Ledbetter and prior cases -- that current effects alone cannot breathe new life into prior uncharged discrimination -- is still binding law" for his termination claim. Further, if, by asserting that "The facts of this case have never been investigated", Bethke is contending that he was not contacted by the ERO for further information regarding the September 6, 2005 letter, whether or not this is true, this is of no consequence in the instant matter since Bethke has conceded that the letter was merely a part of the overall plan to effectuate the decision to terminate his employment. Furthermore, while Bethke has also asserted that the September 6 letter "effectively ended his career as a CPA", as noted by the respondent, Bethke: "does not articulate exactly how the letter supposedly ended his career as a CPA or how the outcome might have been different had the letter said something else, for example, that he was 'terminated,' as he claims. Thus, Mr. Bethke has not made a legally significant argument that characterizing his termination as a retirement had any detrimental effect beyond the kind of post-discrimination actions discussed in Ledbetter or the cases cited therein."
Finally, Bethke has asserted that he signed and sent his complaint in this matter to the ERD by certified mail, and he questions whether DWD § 218.25 or the "mail box" rule applies. The answer is that they do not. Section DWD 218.25 pertains to the filing of documents by facsimile or electronic mail. However, Bethke filed his complaint by certified mail. The ERD received this complaint on June 16, 2006, which was more than 300 days following the termination of Bethke's employment. The "mail box" rule, at least as apparently referred to by Bethke in the context of this case, is that the fact that he had signed and sent his complaint by certified mail to the ERD within the 300-day limitations period should govern the timeliness issue. Apparently, Bethke is including in this argument complaint allegations that were dismissed by the first ALJ. The law, however, is to the contrary. Wisconsin Statute § 111.39(1) provides that the department may receive and investigate a complaint "if the complaint is filed with the department no more than 300 days after the alleged discrimination..." Under ch. DWD 218, which implements the provisions of the Act, the term "Filing" "means the physical receipt of a document." See § DWD 218.02(6). Indeed, in Hilmes v. DILHR, 147 Wis. 2d 48, 53, 433 N.W.2d 251 (Ct. App. 1988), the court held that "filing" does not occur until the complaint is received."
Attorney Bonnie A. Wendorff
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(1)( Back ) Friday, June 16, 2006, is 301 days after August 19, 2005.