Case Title: MARTINEZ v YELLOWSTONE COUNTY WELF

Citation: 

Docket Number: 80-329

State: montana

Court: Montana Supreme Court

Date: 1981-03-26T00:00:00Z

Document:
No. 80-329 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 YVONNE MARTINEZ, Charging party & Respondent, YELLOWSTONE COUNTY WELFARE DPEARTMENT., Petitioner and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone. Honorable Charles Luedke, Judge presiding. Counsel of Record: For Appellant: Anderson, Edwards and Molloy, Billings, Montana Donald W. Molloy argued, Billings, Montana For Respondent: Harold F. Hanser, County attorney, argued, Billings, Montana C. David Gorton argued, Billings, Montana For Amicus Curiae: Frederick Sherwood argued, Helena, Montana Submitted: February 18, 1981 Decided: March 27, 1981 MAR 2 1 1981 Filed. M r . J u s t i c e Frank B. Morrison, Jr., d e l i v e r e d t h e Opinion of t h e Court. I n 1977, a p p e l l a n t , Yvonne Martinez f i l e d a complaint with t h e Montana Human Rights Commission (Commission), charging t h e respondent, Yellowstone County Welfare Department (Department), with r a c i a l discrimination. The charge stemmed from t h e Department' s r e j e c t i o n of Martinez' a p p l i c a t i o n s f o r s e v e r a l job vacancies. Following an i n v e s t i g a t i o n , t h e Commission conducted a hearing. O n November 1, 1979, the Commission issued f i n d i n g s of f a c t , conclusions of law and an order determining t h a t t h e Department had unlawfully discriminated a g a i n s t Martinez. The Department f i l e d a p e t i t i o n f o r j u d i c i a l review i n the D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable Judge Charles Luedke presiding. O n August 19, 1980, Judge Luedke entered an order vacating t h e Commission's f i n d i n g s of f a c t , conclusions of law and order and granting the Department's motion t o dismiss t h e complaint. From t h i s order, Martinez appeals. Yvonne Martinez i s a fifty-two-year-old black woman. She speaks, reads and w r i t e s p r o f i c i e n t l y i n both English and Spanish. From February 1973 t o August 1974, Martinez was employed by t h e Department a s an e l i g i b i l i t y technician. During her employment, Martinez was recommended f o r and received permanent s t a t u s with the Department, i n s p i t e of problems involving t a r d i n e s s , absenteeism and p e r s o n a l i t y con£ l i c t s . I n August 1974, Martinez v o l u n t a r i l y resigned from t h e Department and moved t o C a l i f o r n i a . Upon her termination, she received very favorable letters of recommendation from her immediate supervisors. I n C a l i f o r n i a , Martinez obtained employment with t h e San Diego Department of Public Welfare a s an e l i g i b i l i t y technician advancing i n p o s i t i o n during her employment. I n June 1976, Martinez returned t o B i l l i n g s , Montana, and sought employment a t the Department. She was advised by t h e Department Director James Greer t o apply through t h e Montana M e r i t System. Martinez complied by having her test scores obtained i n C a l i f o r n i a t r a n s f e r r e d t o the Montana M e r i t Counsel. I n October 1976, an e l i g i b i l i t y technician vacancy a r o s e a t t h e Department. Martinez applied f o r the vacancy. The m e r i t system r e g i s t e r f o r Yellowstone County i n d i c a t e d t h a t Martinez was t h e most q u a l i f i e d a p p l i c a n t . The Department had possession of t h i s information b u t chose t o r e j e c t Martinez' a p p l i c a t i o n and f i l l e d t h e p o s i t i o n with a white female. Martinez t e s t i f i e d t h a t she c a l l e d t h e Department concerning t h e p o s i t i o n and was t o l d by J a c k i e Hurick, a s s i s t a n t administrator of t h e Department, t h a t the vacancy had been f i l l e d , and t h a t they wouldn't be h i r i n g any "niggers" anyway. Hurick, t h e a l l e g e d d e c l a r a n t , t e s t i f i e d t h a t no such statement was ever made. The Commission determined t h a t t h i s statement had, i n f a c t , been made and t h e Commis- s i o n ' s p o s i t i o n was adopted by Judge Luedke i n h i s order. I n December 1976 when a second vacancy arose, Martinez' name appeared on the m e r i t system r e g i s t e r a s the most q u a l i f i e d a p p l i c a n t , n o t only i n Yellowstone County, b u t i n the e n t i r e S t a t e of Montana. The Department had possession of t h i s information when it r e j e c t e d Martinez' a p p l i c a t i o n and f i l l e d t h e p o s i t i o n with a white female. A t h i r d vacancy a r o s e i n February 1977. Again Martinez' name appeared f i r s t on t h e m e r i t system r e g i s t e r f o r both Yellowstone County and t h e e n t i r e S t a t e of Montana. The De- partment had possession of t h i s information when it r e j e c t e d Martinez' a p p l i c a t i o n and f i l l e d t h e p o s i t i o n with a white female c l e r i c a l worker from another s e c t i o n of the Department. During the period i n which Martinez applied f o r job openings, t h e Department used t h r e e f a c t o r s i n f i l l i n g va- cancies. The d i r e c t o r , James Greer, looked a t the names of t h e top t h r e e a p p l i c a n t s l i s t e d on the m e r i t system r e g i s t e r , considered intra-departmental a p p l i c a n t s , even i f t h e i r names d i d n o t appear on t h e m e r i t r e g i s t e r , and discussed t h e a p p l i c a n t s with personnel i n the Department. Greer spoke primarily with t h r e e people concerning Martinez: Lou Hagerman, a supervisor i n t h e o f f i c e during Martinez' p r i o r employment a t the Department; Carole Chappell, a co-worker i n t h e Department during Martinez' p r i o r employment; and J a c k i e Hurick, a s s i s t a n t administrator of t h e Department. I t was the opinion of a l l t h r e e t h a t Martinez had £re- quently been tardy, absent and had caused c o n f l i c t s within t h e Department. A l l t h r e e recommended t h a t Martinez n o t be rehired. Greer acknowledged t h a t t h e opinions of these t h r e e people, e s p e c i a l l y J a c k i e Hurick, had a g r e a t impact on h i s d e c i s i o n t o r e j e c t Martinez' a p p l i c a t i o n s . Following a contested hearing i n t h i s matter, t h e Commission determined t h a t a p p e l l a n t , Martinez, had been unlawfully discriminated a g a i n s t by t h e respondent, Department. I n making t h i s determination, the Commission r e l i e d upon and applied t h e p r i n c i p l e s governing employment discrimination cases, a s set f o r t h i n McDonnell Douglas Corp. v. Green (1973), 4 1 1 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668. The D i s t r i c t Court acknowledged t h e Commission's r e l i a n c e upon these p r i n c i p l e s b u t reversed the agency's determination due t o what t h e c o u r t considered a ". . . f a i l u r e t o r e q u i r e t h a t the proof e s t a b l i s h t h e existence of t h e e s s e n t i a l elements of the charge of prohibited r a c i a l discrimination . . . " According t o the D i s t r i c t Court " [dl i s c r i m i n a t i o n a g a i n s t complainant because of her membership i n the black r a c e r e q u i r e s f i r s t , proof t h a t she i s black and, second, t h a t respondent knew she w a s black and, t h i r d , t h a t she was denied employment because she was black." After reviewing t h e evidence, the D i s t r i c t Court determined t h a t no proof e x i s t e d which e s t a b l i s h e d t h a t James Greer, d i r e c t o r of t h e Department, knew Martinez was black when he made h i s d e c i s i o n s t o r e j e c t her a p p l i c a t i o n s . The i s s u e s presented on appeal a r e a s follows: 1. Whether t h e D i s t r i c t Court e r r e d i n r e q u i r i n g proof of s c i e n t e r on t h e p a r t of James Greer? 2. Whether t h e D i s t r i c t Court exceeded i t s s t a t u t o r y a u t h o r i t y of review under s e c t i o n 2-4-704, M C A ? 3. Whether the Commission e r r e d i n reducing a p p e l l a n t ' s award of backpay by use of information of i n t e r i m wages not presented a t the Commission hearing? Appellant contends t h a t it was e r r o r t o r e q u i r e proof of Greer's s t a t e of mind. Appellant argues such a require- ment exceeds t h e prima f a c i e showing standard e s t a b l i s h e d i n McDonnell Douglas v. Green, supra. This i s a case of f i r s t impression i n Montana. The case arose under t h e provisions of T i t l e 4 9 , Human Rights Act, MCA, s p e c i f i c a l l y s e c t i o n 49-2-303, MCA, which provides i n p e r t i n e n t p a r t : " (1) I t i s an unlawful discriminatory p r a c t i c e f o r : " ( a ) an employer t o r e f u s e employment t o a person . . . because of h i s r a c e , creed, r e l i g i o n , m a r i t a l s t a t u s , color, o r n a t i o n a l o r i g i n . . ." The provisions of T i t l e 49, Montana Human Rights Act, a r e c l o s e l y modeled a f t e r T i t l e V I I of t h e Federal C i v i l Rights Act of 1964, 4 2 U.S.C. 52000$ e t seq., and t o a l e s s e r degree a f t e r the Age Discrimination i n Employment Act, 29 U.S.C. 5621, e t seq. A considerable body of law has developed under t h e s e f e d e r a l empl.oyment discrimination a c t s . Due t o t h e p a r a l l e l s t r u c t u r e of t h e f e d e r a l laws and t h e Montana Human Rights Act, t h i s Court has examined t h e r a t i o n - a l e of f e d e r a l case law. Under f e d e r a l case law, unlawful employment discrimin- a t i o n claims a r e separated i n t o t h r e e d i s t i n c t c a t e g o r i e s : (1) d i s p a r a t e treatment, where a protected c l a s s member a l l e g e s unequal consideration, b u t where t h e r e a r e f a c i a l l y n e u t r a l h i r i n g p r a c t i c e s (McDonnell Douglas) ; ( 2 ) d i s p a r a t e treatment t o a whole c l a s s where an employer r e g u l a r l y and purposefully t r e a t s a protected c l a s s less favorably i n t h e employment process ( I n t e r n a t i o n a l Brotherhood of Teamsters v. United S t a t e s (1977), 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed. 2d 396) ; and (3) d i s p a r a t e impact, where an employer's p r a c t i c e i s f a c i a l l y n e u t r a l , b u t i n a c t u a l i t y a f f e c t s a protected c l a s s more harshly than o t h e r c l a s s e s . (Albemarle Paper Co. v. Moody (1975), 4 2 2 U.S. 405, 95 S.Ct. 2362, 45 A complaining p a r t y i s o f t e n unable t o develop d i r e c t evidence of discrimination. A s was noted i n Loeb v. Textron, 1 0 1 4 . I n c . , (1st C i r . 1979), 600 F. 2d 1003, / ". . . 71.) d i r e c t evi- dence of discrimination i s l i k e l y t o be unavailable, and ( 2 ) t h e employer has the b e s t access t o the reasons t h a t prompted him t o f i r e , r e j e c t , d i s c i p l i n e o r r e f u s e t o promote t h e complainant. . ." To ease t h i s d i f f i c u l t y the United S t a t e s Supreme Court i n McDonnell Douqla-s enunciated t h e elements of f a c t u a l proof which make a prima f a c i e case of discrimination f o r t h e p l a i n t i f f where the a l l e g a t i o n i s d i s p a r a t e treatment. Once a complaining p a r t y e s t a b l i s h e s a prima f a c i e case, an inference of discrimination a r i s e s by operation of law ir- r e s p e c t i v e of whether d i r e c t evidence of discrimination e x i s t s . Furnco Construction Corp. v. Waters (1978), 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957. The elements c o n s t i t u t i n g a prima f a c i e case under each theory of discrim: i n a t i o n may d i f f e r . I n the case a t b a r , Martinez' complaint stemmed from unequal treatment where t h e r e w e r e f a c i a l l y n e u t r a l h i r i n g p r a c t i c e s . Thus, t h i s Court must focus on t h e elements c o n s t i t u t i n g a prima f a c i e case under t h e d i s p a r a t e treatment discrimination theory. To make o u t a prima f a c i e case of d i s p a r a t e treatment, a complaining p a r t y must show: ". . . (i) t h a t he belongs t o a r a c i a l minority; (ii) t h a t he applied and was q u a l i f i e d f o r a job f o r which t h e employer was seeking a p p l i c a n t s ; (iii) t h a t , d e s p i t e h i s q u a l i f i c a t i o n s , he was re- jected; and ( i v ) t h a t , a f t e r h i s r e j e c t i o n , t h e p o s i t i o n remained open and the employer continued t o seek a p p l i c a n t s from persons of complainant's q u a l i f i c a t i o n s . " McDonnell Douglas Corp. v. Green, supra, 4 1 1 U.S. a t 802. The Supreme Court i n McDonnell Douglas noted t h a t due t o the varying f a c t u a l s i t u a t i o n s a r i s i n g under T i t l e V I I discrimination claims, t h e s e four elements w e r e n o t n e c e s s a r i l y applicable t o every d i s p a r a t e treatment claim. Thus, c o u r t s have held t h a t t h e f o u r t h element i n McDonnell Douglas was s a t i s f i e d by a showing t h a t t h e job vacancies were f i l l e d with white employees, Crawford v. Western Elec. Company, Inc. ( 5 t h C i r . 1980), 614 F.2d 1300. Once a prima f a c i e case i s e s t a b l i s h e d , an inference a r i s e s which i s s u f f i c i e n t t o s u s t a i n t h e complaining p a r t y ' s burden of proof. Where evidence exists establishing a prima facie case, the trier of fact must proceed to the next step in evaluating evidence. This entails determining whether the employer countered the complaining party's prima facie case with probative evidence establishing ". . . some legitimate, nondiscriminatory reason for the employee's rejection." 411 U.S. at 802. McDonnell Douglas Corp. v. Green, supra,/ If no such evidence exists, the complaining party must prevail-. If evidence exists which, on its face, shows a legiti- mate nondiscriminatory reason for the employer's conduct, the trier of fact must resolve the conflict and determine whether complainant has satisfied the burden of proof. In resolving this conflict, the trier of fact may be aided by affirmative evidence of pretext. McDonnell Douglas. The trier of fact may also be assisted by the strength of the inference arising from the complaining party's prima facie case or by its assessment of the credibility of the witnesses at trial. Maine Human Rights Commission v. City of Auburn Me. (1979) r , 408 A.2d 1253. In the case at bar, the Commission followed the evidentiary standards enunciated in McDonnell Douglas. The Commission determined that Martinez had established a prima facie case of racial discrimination and that the Department had articu- lated a legitimate, nondiscriminatory reason for rejecting Martinez. The Commission then found that the evidence, as a whole, established unlawful discrimination because the Depart- ment's reason for rejecting Martinez was merely a pretext for a discriminatory purpose. In making this finding the Commission considered that Martinez had previously been promoted to permanent status despite her tardiness, absences and personality conflicts. The District Court, in requiring Martinez to prove that James Greer knew she was black when he rejected her applica- tion, erred as a matter of law. The McDonnell Douglas elements, constituting a prima facie case, do not require a showing of scienter on the part of the employer. Requiring proof of such knowledge would effectively destroy the prima facie case rule and the inference of discrimination created by law. The District Court held that no proof existed showing Greer's adverse decision regarding Martinez to be affected by the racially biased remark of Jackie Hurick. Section 49- 2-101(8), MCA, which defines "employer" is silent on whether that term embraces "agents" or those upon whom the employer relies. Since Title VII, 42 U.S.C. §2000e(b) defines employer to include "agents", the federal cases are inapplicable. The holding by the District Court is contrary to the rationale expressed in Board of Trustees of Billings, Etc. v. State ex rel. Board of Personnel Appeals (1979), Mont. , 604 P.2d 770, 36 St.Rep. 2289. In that case we held that it was an unlawful act of discrimination for a school board to rely upon a tainted evaluation of a school teacher in reaching a decision not to rehire. Chief Justice Haswell, writing for a unanimous court, made it abundantly clear that it was the taint of the evaluation that created the unlawful discrimination. The school board trustees ". . . relied upon this evaluation, thereby committing the prohibited act of discrimination. --- They may not insulate themselves by claiming -- lack of knowledge. If we were not to adopt such a policy a school board could violate a public employee's rights with impunity in almost every instance . . ." (Emphasis supplied.) 604 P.2d at 775. I n the case a t bar, James G r e e r , d i r e c t o r of the Depart- ment, r e l i e d upon an evaluation of Martinez by J a c k i e Hurick, a s s i s t a n t administrator of t h e Department. This evaluation was t a i n t e d . W e hold t h a t Greer's personal knowledge was n o t m a t e r i a l , and t h a t t h e D i s t r i c t Court e r r e d i n f i n d i n g such personal knowledge t o be a necessary element of p l a i n t i f f ' s proof. I n reaching i t s determination t o r e v e r s e , the D i s t r i c t Court reviewed t h e e n t i r e record, and i n e f f e c t , redetermined t h e c r e d i b i l i t y of t h e witnesses and t h e weight given t o evidence by t h e Commission. The scope of review of a D i s t r i c t Court regarding agency determinations i s governed by s e c t i o n 2-4-704, MCA, which provides i n p e r t i n e n t p a r t : " ( 2 ) The c o u r t may not s u b s t i t u t e i t s judgment f o r t h a t of t h e agency a s t o the weight of t h e evidence on questions of f a c t . . . The c o u r t may r e v e r s e o r modify t h e d e c i s i o n i f s u b s t a n t i a l r i g h t s of t h e a p p e l l a n t have been prejudiced because the admini- s t r a t i v e f i n d i n g s , inferences, conclusions, o r de- c i s i o n s a r e : " ( e ) c l e a r l y erroneous i n view of t h e r e l i a b l e , probative, and s u b s t a n t i a l evidence on t h e whole record; " The e f f e c t of t h i s provision i s t o l i m i t a reviewing D i s t r i c t Court t o a determination of whether o r n o t s u b s t a n t i a l evidence e x i s t s t o support t h e agency decision. This Court spoke t o t h a t i s s u e i n Standard Chemical Man- ufacturing Company v. Employment S e c u r i t y Division (1980). 613 108 Mont. , 605 P.2d 610,/37 St.Rep. 1 0 5 , / s t a t i n g t h a t : . . . I n questions of t h i s kind, where t h e agency i s en- t r u s t e d and charged with administering t h e s t a t u t e and making necessary, i n i t i a l f a c t u a l determinati6ns. it i s well s e t t l e d t h a t a reviewing c o u r t ' s function i s limited. Where f a c t u a l determinations a r e war- ranted by the record and have a reasonable b a s i s i n law, they a r e t o be accepted. I t i s n o t the c o u r t ' s function t o s u b s t i t u t e i t s own inferences of f a c t f o r those of an administrative t r i b u n a l o r agency, where f a c t s a r e supported by evidence i n the record." I n the case a t b a r , c o n f l i c t i n g evidence e x i s t e d regarding Martinez' prima f a c i e case and the Department's claimed nondiscriminatory reason f o r n o t r e h i r i n g Martinez. These c o n f l i c t s w e r e decided i n favor of Martinez by the Commission. For the D i s t r i c t Court t o review and redecide these c o n f l i c t s exceeds i t s s t a t u t o r y a u t h o r i t y . A s was noted i n Standard Chem., 605 P.2d a t 614: "Where the i s s u e [ i n controversy] i s so c l o s e and t h e r e i s s u f f i c i e n t c r e d i b l e evidence on the re- cord which would allow reaching opposite conclu- s i o n s , w e think t h a t a finding which overturns another a s being ' c l e a r l y erroneous' i s an abuse of d i s c r e t i o n . Where the D i s t r i c t C o u r t ' s review- i n g function i s l i m i t e d , a s i n t h i s case, the f i n d i n g s of a d m i n i s t r a t i v e agencies and t r i b u n a l s must be sustained where t h e r e i s s u f f i c i e n t c r e d i b l e evidence i n the record." For the foregoing reasons, the judgment of t h e D i s t r i c t Court must be reversed. W e must now t u r n t o the i s s u e of o f f s e t t i n g interim wages. Although no evidence was presented a t the contested hearing i n t h i s matter regarding i n t e r i m wages earned by Martinez, t h e Commission reduced her backpay award based on information contained elsewhere i n its record. The Commission d i d n o t s p e c i f y the source of t h i s information i n i t s f i n d i n g s of f a c t b u t merely determined t h a t Martinez had earned $5,229.50 during t h e d u r a t i o n of t h i s matter. Section, 2-4-612, MCA, sets f o r t h r u l e s regarding procedure f o r Commission hearings. I t provides i n p e r t i n e n t p a r t , t h a t : " (1) Opportunity s h a l l be afforded a l l p a r t i e s t o respond and p r e s e n t evidence and argument on a l l i s s u e s involved. " (5) A p a r t y s h a l l have the r i g h t t o conduct cross- examinations required f o r a f u l l and t r u e d i s c l o s u r e of f a c t s . . . " (6) Notice may be taken of j u d i c i a l l y cognizable f a c t s . . . P a r t i e s s h a l l be n o t i f i e d e i t h e r before o r during the hearing o r by reference i n preliminary r e p o r t s o r otherwise of the m a t e r i a l noticed, in- cluding any s t a f f memoranda o r d a t a . They s h a l l be afforded an opportunity t o c o n t e s t the m a t e r i a l so noticed. " I n the case a t b a r , the information used by the Commission t o reduce Martinez' backpay award was n o t noticed t o t h e p a r t i e s involved thus precluding the a p p e l l a n t from c o n t e s t i n g t h e reduction. Furthermore, s e c t i o n 2-4-623, MCA, governing the f i n a l order handed down by the Commission i n contested cases, pro- v i d e s t h a t : " ( 1 ) . . . A f i n a l decision s h a l l include f i n d i n g s of f a c t and conclusions of law, s e p a r a t e l y s t a t e d . . . " ( 2 ) Findings of f a c t s h a l l be based exclusively on t h e evidence and on matters o f f i c i a l l y noticed." Since t h e matter of i n t e r i m wages w a s n o t s u b s t a n t i a t e d by evidence a t the hearing nor o f f i c i a l l y noticed t o t h e p a r t i e s involved, it was e r r o r f o r the Commission t o reduce t h e backpay award of Yvonne Martinez. Therefore, t h i s matter must be remanded f o r proper determination of t h e o f f s e t , i f any. The D i s t r i c t Court order i s reversed. The order of t h e Commission i s r e i n s t a t e d except t h a t p o r t i o n off s e t t i n g i n t e r i m wages. The case i s remanded t o the Commission with d i r e c t i o n s t o hold a hearing f o r the purpose of determining what, i f any, i n t e r i m wages should be o f f s e t from t h e award granted. ./'/ /) Justices I/