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


KATHLEEN R. DEMET, Complainant

HOMEWARD BOUND OF RACINE CO, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 199600135


An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter finding that the respondent had discriminated against the complainant in violation of the Wisconsin Fair Employment Act, and ordering the respondent to award the complainant back pay and attorney's fees. The respondent filed a timely petition for commission review. Both parties submitted written arguments to the commission.

Based upon a review of the record in its entirety, the Labor and Industry Review Commission hereby issues the following:

FINDINGS OF FACT

1. The respondent, Homeward Bound of Racine County, Inc., is a nonprofit corporation which provides shelter and services for homeless women and children. It receives up to 50 percent of its funding from government sources (grants), about 30 percent from the United Way, and the remainder from various foundations and through support from individuals. The respondent employs a small number of individuals, some of which are classified as support staff and case managers, to provide its program services. At all times material herein, Mary Etta McLane was the respondent's executive director.

2. The complainant, Kathleen Demet, who had been working part time for the respondent, was apparently hired as a full-time employe in March 1995 to work in a support staff position. She was subsequently placed in a case manager position in June 1995. The case manager position was a position working in the respondent's new extended care program that had recently started. The wage rate established for Demet's position was $7.00 per hour.

3. Effective at least from January 1992, the respondent's procedural manual on health insurance stated that the respondent would provide health insurance coverage, at no cost, to all full time permanent employes after successful completion of a 90-day probation period. Three types of health insurance coverage were stated as being available in June 1995: "Single Employee Coverage," "Employee/Dependent Coverage" and "Family Coverage/Including Spouse." In addition to the above statement about providing health insurance at no cost, however, the following language appeared under the section titled "POLICY": "...Homeward Bound will subsidize insurance benefits to the point allowed within budgetary constraints. Certain coverages will be offered at no cost to the employee...."

4. The respondent's fiscal year begins in July and runs through June of the next calendar year. Prior to the beginning of the 1995 fiscal year, McLane, who had responsibility for the budget, made projections for the cost of the respondent's operation, including employe benefits, for that fiscal year. Prior to the 1995 fiscal year McLane had also applied for HUD Emergency Shelter Grant Funds, administered by Wisconsin's Department of Administration, to help fund the new extended care program the respondent was starting. McLane, who had to submit her projected budget for this program, stated in the grant request that there would be one full-time case management position and a 25 percent FTE (Full time equivalency) case management position in the extended care program.

5. Demet completed an insurance application for Family Coverage/Including Spouse in June 1995, after her 90-day probation period. Apparently, the respondent was first billed for this coverage plan requested by Demet in August 1995. McLane knew that the premium charge was higher for Employee/Dependent coverage than Single Employee Coverage, but that up to the point that Demet obtained the Family Coverage/Including Spouse coverage, she had no idea of the cost of that type of coverage.

6. A bill with a due date of September 1, 1995, shows that the respondent's monthly premium charge for Demet's family insurance coverage was $534.30. This included HMO coverage, drug, dental, life, and accidental death and dismemberment insurance coverage. The monthly premium charge for other employes with Employee/Dependent coverage (employe plus children) with identical protection coverage was slightly over $300. A monthly premium charge of slightly under $300 was incurred for one individual who did not request dental coverage for her child/children.

7. Demet could not recall exactly when but testified that probably close to the middle or end of July 1995 (it was likely during August 1995 after the respondent received the bill for health insurance referred to in paragraph 5 above), she began hearing comments regarding the cost of her insurance coverage and the fact that because of the coverage for her husband, this was costing the respondent way too much money. Demet says that she was told this more than once by McLane.

8. McLane first talked to Demet about health insurance during a work related trip taken in August 1995, when she told Demet she felt the board was going to do something because the respondent could not afford the increasing costs.

9. Apparently in early October 1995 after leaving a meeting with McLane, the respondent's office manager-in- training, Cynthia Moore, stated to another employe, Barbara Kile, in the presence of Demet, that all employes (of those entitled to insurance benefits) were going to have to pay $150 a piece for their insurance because of one employe (referring to Demet) who had their husband covered under the respondent's insurance plan. Demet was the only employe whose husband had health insurance through the respondent. Only a few of the respondent's employes had spouses, and those that did have spouses had health insurance coverage elsewhere. As a result of Moore's comments and the rumors which were floating around work, McLane held a staff meeting a week later during which she told the staff: That changes may occur with respect to the respondent's provision of insurance; that everybody may have to start paying $150 towards the cost of their insurance; and that if employes were required to contribute towards the cost of insurance coverage, employes would be given higher wages to compensate them for paying towards their insurance coverage.

10. On October 25, 1995, the respondent's board of directors met. McLane presented the board with three options at this meeting: 1. Have the respondent no longer pay for insurance coverage for dependents (children) or spouses; 2. Provide everyone with a wage increase sufficient to pay for the added cost of dependent coverage (children) and have the employe pay for dependent coverage (the respondent would pay for employe coverage); or 3. Have the respondent pay for employe and dependent coverage and eliminate spousal coverage. It is unclear from the record as to exactly when the board acted on this matter. The prepared minutes of that meeting simply indicate that the personnel committee had passed a motion to recommend to the board (apparently some time earlier) that HMO coverage be made available for all full-time employes and their children, but not their spouses; however, employes would have the option of obtaining spousal coverage at their own expense. According to McLane, the board acted on this matter on October 25, deciding to adopt the recommendation made by the personnel committee, and that she then verbally told the staff about the change right away. McLane testified that when Demet was told about this change, as before when previously advised that there may be changes with the respondent's insurance policy, Demet again did not have a problem with a change in policy, she just requested that the office manager let her know what the cost was and stated that her in-laws were going to pick up the cost. McLane testified that at some point later, she changed the written health insurance policy that was in the procedural manual to conform with the board's new health insurance policy.

11. Demet states that she never heard anything further following the early October meeting in which McLane stated that changes may occur with respect to insurance, until November 26, 1995, at which point she was told by McLane that the policy had changed, that spouses were no longer going to be covered and that she had to pay $211.90 in order to have her husband covered. By check dated November 28, 1995, and drawn on an account belonging to her in-laws (Homer and Mary Demet) Kathleen Demet provided the respondent payment of $211.90 for health insurance coverage for her husband, Mark. Apparently, the complainant's mother-in- law, Mary, wrote the check. The complainant testified that she did not have a checking account at the time and that she paid her mother-in-law $211.90 in cash.

12. On December 16, 1995, the complainant contacted an attorney for legal advice as she felt that she was being discriminated against because she was required to pay towards the insurance for her husband. It is clear the fact that she was the only one affected by this policy change added to (or perhaps was the reason for) Demet's belief that she was being discriminated against based on marital status. The complainant asked Cynthia Moore, for a copy of the respondent's health insurance policy in preparation for a meeting with the attorney on Monday, December 18, 1995. The policy the complainant received stated that the respondent provided single or family health insurance coverage to all full time permanent employes at no cost. There was nothing in the copy of the written policy given Demet stating that employes were required to make payment towards the cost of health insurance for spousal coverage.

13. Demet met with an attorney on December 18. The next day Demet advised Moore that she had seen an attorney because she felt she was being discriminated against by McLane. Demet worked through the end of the week and began holiday leave on December 22, 1995.

14. Demet returned to work from the holiday leave on December 27, 1995. Demet's employment ended that day following a meeting in her office with McLane. Demet observed when McLane had requested to meet with her, that McLane was upset because she was "very red faced, very fast moving, and her hair was breezing through the wind." During this meeting McLane questioned Demet about having filed a discrimination suit against the respondent and about seeing an attorney, asked why she had not come to McLane and why she had sought legal advice. McLane then became pretty "verbal" with Demet, telling her that the respondent "could change their goddamn policies any time they chose," and that if her husband "could hold down a goddamn job long enough (she) wouldn't need (the respondent's) insurance." At one point, McLane leaned over Demet's desk and told her she "could make things miserable for (her)." Demet testified that this made her "afraid, shaky and nervous," and that McLane was "looking very, very angry." Demet told McLane that she would not pay for the insurance, that it was not right, that she should not have to pay to have her spouse covered when nobody else did. McLane repeatedly asked Demet what she was going to do, and she responded she was not paying for the insurance. With McLane still "hovering" over Demet, she eventually stated, "I guess I will be forced to quit."

15. Demet then went to the desk of Barbara Kile, turned in her keys and left the building.

16. Demet felt that she was forced to quit because she believed McLane when McLane stated that she would make things miserable for her. Demet had witnessed McLane intimidate, threaten and force other employes to quit during her 16 months of employment at the respondent. Demet's beliefs about McLane and what McLane would do are supported by testimony given by Rebecca Simpson. Simpson was the former program coordinator for the respondent. She had responsibility for hiring employes and oversaw the case management staff. Simpson testified that several employes had complained to her about McLane's handling of various matters, and that she knew that several individuals, including herself, had gone to the board to complain about McLane's "belligerence." Simpson also testified that despite having set up the extended care program as involving only 1 full-time position, McLane had also offered Demet full-time work as a case manager in this program at a time when Kenya Johnson, who had originally been hired as the full-time case manager in this program, and McLane were having problems in the nature of a personality conflict. Further, Simpson testified that Johnson was later fired, and that she (Simpson) had not observed anything in Johnson's performance that warranted discipline or discharge.

Based upon the above FINDINGS OF FACT, the Labor and Industry Review Commission makes the following:

CONCLUSIONS OF LAW

1. The respondent is an employer within the meaning of the Wisconsin Fair Employment Act.

2. The complainant, by virtue of her marital status (married), is a member of a protected class under the Wisconsin Fair Employment Act.

3. The respondent did not discriminate against the complainant on the basis of marital status with respect to compensation for health insurance in violation of the Wisconsin Fair Employment Act.

4. The respondent discriminated against (i.e., retaliated against) the complainant, in violation of the Wisconsin Fair Employment Act, because she opposed what she believed to be a discriminatory practice under the Act.

5. The respondent discriminated against the complainant, in violation of the Wisconsin Fair Employment Act, when it constructively terminated her employment because of her opposition to what she reasonably believed to be a discriminatory practice under the Act.

Based upon the above FINDINGS OF FACT and CONCLUSIONS OF LAW, the Labor and Industry Review Commission issues the following:

ORDER

1. The complainant's claim of marital status discrimination with respect to compensation is dismissed.

2. The respondent shall cease and desist from discriminating against the complainant because she opposed what she believed to be a discriminatory practice under the Act.

3. The respondent shall make the complainant whole for all losses in pay and benefits she has suffered as a result of the respondent's unlawful actions by paying her the sum she would have earned as an employe from December 27, 1995, until such time she is either reinstated, or is deemed to have declined reinstatement with the respondent. (In terms of the cut-off date for the back pay period, the commission notes that after the ALJ had issued a nonfinal decision but before the issuance of his final decision, counsel for both the respondent and the complainant agreed that a cut-off date for the back pay period was necessary, and that counsel for the respondent had further asserted that he understood the complainant was employed elsewhere and had not requested reinstatement. Assuming the complainant no longer wishes to work for the respondent, the point at which she decided she no longer wished to work for the respondent will be relevant to establishing the cut-off point for the back pay period.)

4. The back pay ordered herein shall be computed on a calendar quarter basis, with reductions, on a quarterly basis, for interim earnings or amounts earnable with reasonable diligence during the back pay period. Wis. Stat. 111.39(4)(c). Also, any amounts the complainant received as unemployment insurance or welfare payments during the back pay period shall not reduce the back pay otherwise allowable, but shall be withheld from the complainant and immediately paid to the unemployment reserve fund or, in the case of a welfare payment, to the welfare agency making the payment. Id. (Reimbursement for unemployment insurance shall be in the form of a check made payable to the Department of Workforce Development, Unemployment Insurance Division, and show the ERD Case No. and the complainant's social security number.) Additionally, the amount payable to the complainant after all statutory setoffs shall be increased by interest at the rate of 12% per annum, simple interest. The interest is to be computed for each calendar quarter, figured from the last day of each calendar quarter during the back pay period, to date payment is made. The sum of the net back pay plus interest owed for all the calendar quarters during the back pay period shall constitute the total back pay owed the complainant.

5. The respondent shall also pay the complainant reasonable attorney's fees and costs incurred for representation by her attorney, William Whitnall. This amount shall be paid to the complainant by check made jointly payable to the complainant and Attorney William Whitnall.

6. Within 30 days of the expiration of time within which an appeal may be taken herein, the respondent shall submit a compliance report detailing 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.

Dated and mailed: April 9, 1998
demetka.rrr : 125 :

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

This case presents, in part, the question of whether the employer's practice with respect to providing health insurance coverage to its employes constitutes unlawful discrimination on the basis of marital status. The Wisconsin Fair Employment Act prohibits employers from discriminating against any individual in compensation or in terms, conditions or privileges of employment on the basis of marital status. The Act defines marital status as "the status of being married, single, divorced, separated or widowed." Wis. Stat. 111. 32(12).

The situation presented in this case has some similarities to the case of Hartmann & Lavine v. Mueller Foods, (LIRC, 9/10/85). In Hartmann & Lavine, the employer had a practice of paying the entire premium cost, whether it was for health insurance for single employes eligible for personal coverage, or employes with a spouse whose "personal plus dependent" health insurance premiums were more expensive. In an effort to control the increasing cost of health care insurance, the employer proposed under a new collective bargaining agreement that all employes be required to pay by way of deduction from their paychecks, 30 percent towards the health insurance that they carried, and that this savings would then be converted into a direct across the board wage increase which would be the same in amount for all employes, but this proposal was rejected by the union members. Sensing that opposition to its proposal was based in part on employe dissatisfaction with the prospect there would be different take home pay amounts due to the difference between a deduction for a 30 percent contribution toward the personal premiums versus personal plus dependent premiums, the employer offered, and the union members agreed to accept, a plan where the employer would provide a one-time wage increase of 17 cents per hour for employes with the personal coverage and a 42 cent per hour increase for those with personal plus dependent coverage. The 25 cent per hour difference in wage increase reflected the difference between what a married employe with personal plus dependent coverage versus a single employe with the less expensive personal coverage would be required to pay if making a 30 percent contribution toward health insurance premiums. Mr. Hartmann and Mr. Lavine, two single employes with the less expensive personal coverage, alleged that this compensation scheme constituted unlawful marital status discrimination.

The commission concluded in Hartmann & Lavine that the complainants' marital status (single) was a factor in determining the amount of their wage increase under the employer's wage/benefit redistribution plan, but that there was no violation of the Act. The commission held that there was no violation of the Act because it did not believe the legislature intended that the prohibition against marital status discrimination precluded an employer from providing additional or greater health insurance benefits to its married employes than to its single employes, citing the fact that the State of Wisconsin as an employer itself by statute extended to its own employes group insurance coverage providing married persons with additional or greater benefits than those employes who are single and without dependents. The commission's decision was affirmed on appeal. Hartmann & Lavine v. LIRC (Washington Co. Cir. Ct., 7/18/86).

In the instant case while the respondent initially gave consideration to having all employes contribute to their health insurance coverage, it ultimately decided that only employes with "Family Coverage/Including Spouse" would have to contribute toward the cost of their health insurance coverage. The ALJ concluded that this constituted unlawful discrimination with respect to compensation based on marital status.

The commission disagrees. For budgetary reasons, the respondent was only willing to allot a certain sum of money toward health insurance expenses. The respondent is willing to pay up to a certain amount for all employes, whether single or married. It is a general fact of life that an insurance plan for family coverage will cost more than one for single coverage. The question thus becomes how is it discrimination against a married person to require that individual to pay something towards an insurance plan which costs more than than of another individual who only requests single plan coverage?

As noted above the compensation plan for health insurance found in Hartmann & Lavine was found not to be violative of the Act. There is even less reason to find a violation of the Act based on marital status in the instant case. Unlike Hartman & Lavine, the respondent is not contributing, either directly or indirectly through a one-time wage adjustment, more towards health insurance benefits for married employes who select coverage for their spouses than it does for single employes who did not need spousal coverage. Under Homeward Bound's policy, all employes, whether single or married, receive the same amount of employer paid compensation for health insurance benefits. Demet would be in the same situation if the respondent provided no health insurance benefits at all and she was required to obtain it on her own--she would have to pay more to obtain family insurance coverage than a nonmarried person who only needed single coverage. The commission thus concludes that the respondent did not discriminate against Demet with respect to compensation for health insurance benefits.

Even though the commission concludes there was no discrimination on the basis of marital status, this does not dispose of Demet's claims of retaliation and constructive discharge. Retaliation may be found where an individual opposes conduct reasonably believed to be discriminatory, even if the individual is mistaken and there was no discrimination. Roden v. Federal Express, (6/30/93). An employe's good faith opposition to practices viewed as discriminatory is protected under the Act from retaliation even though the practices may not themselves be discriminatory. Herslof Optical v. DILHR, (Dane Co. Cir. Ct., 3/28/78).

A constructive discharge occurs when an employer makes an employe's working conditions so intolerable that the employe is forced into an involuntary resignation. Dingeldein v. Village of Cecil, (LIRC, 5/8/97), citing, Bartman v. Allis Chalmers Corporation, 799 F.2d 311, 314 (7th Cir. 1986), cert. denied, 107 S. Ct. 1304 (1987). To find a constructive discharge it must be established that the working conditions would have been so difficult or unpleasant that a reasonable person in the employe's shoes would have felt compelled to resign. Waedekin v. Marquette University (LIRC, 3/5/91), citing, Bourque v. Powell Electrical Manufacturing Co., 617 F.2d 61, 65 (5th Cir. 1980).

Demet's claim of retaliation is that McLane had questioned her right to go see an attorney about the respondent's policy change regarding insurance coverage for spouses, and threatened to make life miserable for her. Demet's constructive discharge claim is that she believed McLane would indeed make life miserable for her, as she had witnessed McLane threaten and force many other employes out of work.

On appeal the respondent argues that while the December 27, 1995 meeting was tense, Barbara Kile, an employe who was within six feet of Demet's office, said the only elevated voice she heard was that of Demet. The respondent also argues that, "McLane did not angrily tell Demet that `if her goddamn husband could hold a job...that she wouldn't need our insurance'", that "(i)t was Demet who complained to McLane that her husband was lazy and could not hold a job and that she could not get health insurance coverage because of her husband's inability to hold a job." Further, the respondent has also argued that McLane did not lean over Demet's desk but stood in the doorway leaning on a cabinet next to the door, that McLane did not tell Demet that she could make things miserable for her, and that Demet quit her employment with Homeward Bound consistent with her earlier statements to employees that she did not like her job, she felt underpaid, and that she was looking for an opportunity to quit.

Demet conceded at the hearing that she felt that she was underpaid (and had filed a "Request" for a raise from $6.60 per hour to $7 per hour after accepting the case manager position) during the period of June 1995 to December 27, 1995, and that she had complained on more than one occasion to Cynthia Moore and Barbara Kile during this period that she was looking for other work because she was not appreciated at the respondent. Demet still maintains that what she testified occurred on December 27 happened and that she was forced to quit. Demet also conceded that it was her belief that Barbara Kile had gotten an "extra paycheck" (apparently in the nature of some type of bonus) around the time she quit, but denied that this had angered her to the point of saying that she was going to quit.

The commission consulted the ALJ with regard to his impressions of the credibility and demeanor of the witnesses. The ALJ did not find the testimony of Kile to be credible, nor did he find McLane's version of what transpired on December 27, 1995, to be credible. The ALJ noted that during the hearing Kile was glancing over at McLane a lot, and that McLane "struck" him as a "controlling person" and not one that would have just "sat quietly by" during the meeting on December 27.

Moreover, the testimony of Rebecca Simpson, the former program coordinator for the respondent, who had responsibility for hiring employes and oversaw the case management staff, supports the ALJ's acceptance of Demet's testimony about what occurred on December 27, 1995, and discrediting of McLane's testimony. Simpson testified that several employes had complained to her about McLane's handling of various matters, and that she knew that several individuals, including herself, had gone to the board to complain about McLane's "belligerence." Simpson also testified that despite having set up the extended care program as involving only 1 full-time position, McLane had also offered Demet full-time work as a case manager in this program at a time when Kenya Johnson, who had originally been hired as the full- time case manager, and McLane were having problems in the nature of a personality conflict. Further, Simpson testified that Johnson was later fired, and that she (Simpson) had not observed anything in Johnson's performance that warranted discipline or discharge.

The commission concludes that the record sufficiently establishes that Demet has shown by a preponderance of the evidence that she was retaliated against for opposing what she believed in good faith to be a discriminatory practice, and that she was constructively discharged as a reasonable person in her shoes would have felt compelled to resign.

NOTE: The commission has reversed the ALJ's finding of discrimination on the basis of marital status as a matter of law. The commission has issued its own decision in this matter to more fully set forth the facts relating to Demet's claim of discrimination on the basis of marital status, and claims of discrimination because of opposition to a practice believed discriminatory under the Act and constructive discharge. Further, the commission has modified the make-whole relief awarded Demet by the ALJ to include the required statutory setoffs when a back pay award has been ordered, and to provide a cut-off date for the back pay award. Finally, since the extent of Demet's success on her claims of discrimination has been reduced by the commission's decision in this matter, the commission has not followed the ALJ's award of $7,000 as reasonable attorney's fees and costs, and instead issued a generally worded order that the respondent pay Demet's reasonable attorney's fees and costs. The thought here is that the parties themselves will be able to arrive at a reasonable amount for attorney's fees and costs, based on the extent of Demet's success, as the parties had previously done when the matter was before the ALJ.

cc:
William D. Whitnall
John S. Jude


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