Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-86-01871/USCOURTS-ca10-86-01871-0/pdf.json

Parties Involved:
Nobel-Sysco, Inc.
Appellant
Wilbur Toledo
Appellee

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

WILBUR TOLEDO, 

Plaintiff-Appellant/ 

Cross-Appellee, 

Fl LED 

U!1itcd Srnres c? .. lrt(!f Appeal~ 

T(cth (.,;···: 1 :· 

DEC 2 J 1989 

KOBERT L. HOECK.ER 

Clerk 

v. 

) 

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) 

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Nos. 86-.1853 

86-1871 

NOBEL-SYSCO, INC., 

Defendant-Appel lee/ 

Cross-Appellant. 

Appeal from the United States District Court 

for the District of New Mexico 

(O.C. No. 85-618-M Civ.) 

Stephen T. Lecuyer of Mettler & Lecuyer, Shiprock, New Mexico, for 

Pla~ntiff-Appellant/Cross-Appellee. 

Peter .J. Adang (Jeffrey· Twersky and Eleanor K. Bratton with him on 

the brief) of Modrall, Sperling, Roehl, Harris & Sisk, P.A., 

Albuquerque, New Mexico, for Defendant-Appellee/Cross-Appellant. 

Before LOGAN and SEYMOUR, Circuit Judges, and ANDERSON,* District 

Judge. 

SEYMOUR, Circuit Judge. 

*The Honorable Aldon J. Anderson, S~nior .United States District 

Judge, District of Utah, sitting by designation. 

Appellate Case: 86-1871 Document: 010110195593 Date Filed: 12/29/1989 Page: 1 
Wilbur Toledo brought suit under 42 U.S.C. § 1981 (1982) and 

Title VII of the Civil Rights Act of 1964, 42 ·u.s.c. §§ 2oooe et 

~- (1982), charging that Nobel-Sysco, Inc. discriminated on the 

basis of religion, race, and national o~igin when it refused to 

hire him as a truck driver due· to his religious use of peyote. 

The district court dismissed Toledo's race and national origin 

claims on Nobel's motion for summary judgment and, after a bench 

trial, also dismissed his religious discrimination claim. The 

court held that although Nobel's failure to hire Toledo was· 

relig1ous discrimination, offers Nobel made during subsequent 

administrative proceedings constituted reasonable accommodation of 

· Toledo's religious practices and thus cured the discriminatory 

act. See Toledo v. Nobel-Sysco, Inc., 651 F.Supp. 483 (D. N.M. 

1986). We ieverse as to the religious discrimiriation· 6laim 

because settlement offers made during administrative proceedings 

do not qualify as "reasonable accommodation" _under the religious 

discrimination provision of Title VII. We affirm the summary 

dismissal of Toledo's race and national origin discrimination 

claims. 

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I. 

FACTS 

. A. Toledo's Employment Application 

In March 1984, Toledo applied for a position as a truck 

driver for Nobel-Sysco, Inc .. Nobel is a restaurant supply 

corporation that distributes food, equipment, and other supplies 

to customers in Wyoming, Colorado, Arizona, and New Mexico. 

Toledo applied for a job as a deiivery driver domiciled in 

Farmington, New MexiCOi where he lived. Had Toledo been hired, he 

would have made deliveries to customers in northern New Mexico and 

southern Colorado, a responsibility which included considerable 

driving over mountain roads. He also would have been required to 

work Monday through Saturday, and to be available for: occasional 

Sunday deliveries .. He wo~ld have worked without_day-to~day 

supervision from Nobel, whose nearest office is in Albuquerque. 

Nobel responded to Toledo's application by inviting him to 

interview at its Albuquerque office. Nobel's office manager, 

Rodney Plagmann, conducted the interview .. After the interview, 

Plagmann told Toledo he had the necessary experience for the job 

and would be hired if he passed four tests rout~nely given to all 

of Nobel's driver applicants. One of these tests was a polygraph 

to determine an applicant's truthfulness in responding to 

questions about past _illegal drug use. It was a Nobel policy not 

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to hire applicants who had used illegal drugs in the two years 

preceding their job application. This policy was stated in both 

the newspaper advertisement to which Toledo had responded and in 

information sent to Toledo before his interview. After being told 

of the polygraph requirement, Toledo informed Plagmann that he was 

a member of the Native American Church, and had used peyote as 

part. of church ceremonies. Toledo described the purpose of the 

ceremonies, and indicated he had used peyote twice in the previous 

six months. 

Plagmann did not attampt at that time to obtain more specific 

information regarding Toledo's use of peyote, but he did say that 

Nobel' probably could not hire Toledo. After the· interview 

Plagmann sought advice from Jam~s Etheiton, Nobel's diiector of 

personnel. Etherton in turn called Nobel's labor relations 

·advisor, Jack Moore of Mountain States Employers Council, and 

related the details of Toledo's interview~ Moore told Etherton 

that although religious use of peyote was legal, hiring a known 

user would expose Nobel to potential liability if he were ever 

involved in an accident while driving for Nobel. Etherton theri 

.told Plagmann not to hir~ Toledo, and Plagmann in turn informed 

Toledo that Nobel could not hire him because of his use of peyote. 

Neither Etherton nor Plagmann discussed or attempted accommodation 

of Toledo's religious practices at that time. 

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B. The Native American Church and Use of Peyote 

Toledo has been a member of the Native American Church since 

1983. The role of peyote in church ceremonies was well documented 

at trial, and has been the subject of considerable attention in 

judicial opinions. See,~, Peyote Way Church of God, Inc. v. 

Smith, 742 F.2d 193 (5th Cir. 1984); Native American Church of New 

York v. United States, 468 F.Supp. 1247 (S.D.N.Y. 1979), aff'd, 

633 F.2d 205 (2d Cir. 1980); Smith v. Employment Div., 307 Or. 68, 

763 P.2d 146 (1~88), cert. granted, 109 S.Ct. 1526 (1989); People 

v. Woody, 61 Cal.2d 716, 394 P.2d 813 (1964). Our discussion of 

church ceremonies reflects Toledo's description at trial bf 

ceremonies in which he took part, and the trial court's findings 

based on those descriptions. 

Peyote.is a small spineless cactus that contains quantities 

of the hallucinogen mescaline. Native American religious use of 

peyote was first noticed by Spanish explorers in the 1600's, and 

efforts to prohibit it date from the same century.' Peyote use is 

the central and most sacred practice of the Native American 

Church. Its believers consider peyote t~ be not only a healer, a 

teacher, and a way of communicating with God, but also a deity 

itself. The Native American Chur.ch is an incorporated religion 

which combines elements of Christianity with traditional Native 

American beliefs and the use of peyote. 

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Peyote ceremonies are held at the request of any member for 

healing purposes or special occasions. Although the ceremonies 

may be conducted on any night of the week, they are generally held 

on Friday or Saturday night. The deremonies that Toledo attends 

are conducted by a "Road Man," and take place in a hogan or tepee. 

A ceremony begins in the late evening, and passes through a series 

of rituals and prayers, culminating in the ingestion of peyote 

around midnight. The peyote is prepared by floating "buttons," or 

small slices, of the cactu~ in water. It is served in cups which 

are passed among the participants who both drink the water and 

chew and ·swallow the pieces of peyote .. Toledo testified that the 

cups are always passed once, and often twice. He usually only 

drinks on the first pass, but occasionally drinks on the second. 

The ceremony continues.until dawn. Toiedo stays awake until four 

or five in the afternoon after a ceremony, and then sleeps until 

the next morning .. 

Toledo testified that he normally feels the effects of peyote 

only for approximately four hours after ingesting it. Experts 

testified for both sides, and presented consid~rabl~ scientific 

descriptions of the effects of peyote. The trial court concluded 

that the doses Toledo takes at the ceremony are from 1.6 to 6.4 

milligrams per kilogram of body weight. Both experts agreed that 

a person should not drive a truck for 24 hours after in9esting. 

more than 1 milligram per kilogram of body weight. 

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c. Procedural History 

Shortly after he was refused the Nobel job, Toledo filed an 

employment discrimination claim with the New Mexico Human Rights 

Commission (HRC) charging Nobel with religious discrimination. He 

subsequently amended his HRC complaint to charge discrimination 

based on race and national origin as well. In May 1984, Nobel 

made.Toledo the first of the two offers 'that are the focus of this 

dispute on appeal. Nobel indicated it would hire Toledo on three 

conditions: l) that he take th~ polygraph test and it show no 

illegal drug use other than peyote twice a year; 2) that he take a 

week of regular vacation after each ceremony; and 3) that he drop 

his HRC complaint if Nobel hir.ed him or if he failed the polygraph 

test or physical examination. Toledo rejected the offer and did 

not make a counter-offer. 

On May 24, HRC found probable cause that religiou~ 

discrimination had occurred. The parties continued their 

negotiations, and on July 10 Nobel· improved its initial offer. 

Nobel indicated that if Toledo would give one week's notice before 

taking part in a ce~emony, he would be required to take only one 

day off after each ceremony. Nobel also offered $500 in back pay, 

but still required the polygraph test, the phys~cal e~amination, a 

limit of two ceremonies a year, and that Toledo drop his claim. 

Toledo rejected the offer because the back pay amount was 

insufficient and because he felt the restrictions. on his peyote 

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use were unjustified. He also thought that Nobel would use the 

polygraph test and physical examinatlon as an excuse to disqualify 

him, thereby getting rid of both him and his discrimination claim. 

Toledo did not mak~ a counter-offer. 

In January 1985, the EEOC issued Toledo a right to sue 

notice. Toledo filed this suit, charging religious discrimination 

in violation of Title VII, and race and national origin 

discrimiriation in violation of Title VII and 42 U.S.C. § 1981. 

The district court granted Nobel summary judgment on Toledo's race 

and national origin claims. After a bench trial, the court also 

held for Nobel on the issue of religious discrimination. The 

court determined that although Toledo had made out a prima facie 

case of religious disciimination, the July 10 offer made_ in the 

course of the HRC proceedings constituted reasonable accommodation 

of Toledo's religious practices. The court also refused to award 

Toledo back pay for the four months between the discriminatory act 

and the accommodation offer because Toledo had not proven the . 

appropriate amount at trial. Finally, the court awarded Nobel 

costs. -

Toledo appeals the court's holding that the settlement offers 

absolved Nobel of liability and ended its backpay obligations, the. 

award of costs, and the dismissal of his race and national origin 

claims. Nobel cross-appeals the court's holding that Nobel could 

have accommodated Toledo without undue hardship. 

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II. 

LIABILITY 

Title VI.I makes it "an unlawful employment practice for an 

employer ... to fail or refuse to hire or to discharge.any 

individual . because of such individual's ... religion." 42 

U.S.C. § 2000e-2. Religion is defined by the ·Act as follows: 

"The term 'religion' includes all aspects of 

religious observance and practice, as well as belief, 

unless an employer demonstrates that he is unable to 

reasonably accommodate to an employee's or prospective 

employee's religious observance or practice without 

undue hardship on the conduc~ of the employer's 

business." 

42 U.S.C. § 2000e(j) (1982). As the Supreme Court has noted, 

"[t]he reasonable accommodation duty was incorporated into the 

statute, somewhat awkwardly, in the definition of religion." 

Ansonia Bd. of Educ, v. Philbrook, 479 u.~. 60, 63 n.l _(1986).· 

"The Supreme Court has held that the intent and effect 

of this definition of 'religion' is to make it a 

violation of J 2000e-2(a)(l) for an employer not to make 

reasonable accommodations, short of undue hardship, for 

the reiigioui practice of employees _and prospective 

employees." · 

Pinske~ y. Joint Dist. No. 28J, 735 F.~d 388, 390 (10th Cir. 1984) 

(citing Trans World Airlines v. Hardison, ·432 U.S. 63, 74 (1977)). 

Although the Supreme Court has never ruled on the issue, 

lower courts have implemented a two-step procedure for evaluating 

claims and allocating burdens of proof under these provisions. 

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First, the plaintiff has the burden of establishing a prima facie 

case. 

"A plaintiff ... makes out a prima facie case of 

religious discrimination by proving: (1) he or she has a 

bona fide religious belief that conflicts with an 

employment requirement; (2) he or she informed the 

employer of this belief; (3) he or she was [not hired] 

for failure to comply with the confiicting employment 

requirement." 

_Turpen v. Missouri-Kansas-Texas R.R., 736 F.2d 1022, 1026 (5th 

Cir. 1984); see also Smith v. Pyro Mining Co., 827 F,2d 1081, 1085 

(6th Cir. 1987), cert. denied, 108 S.Ct. 1293 (1988); Protos ~. 

Volkswagen of America, Inc., 797 F.2d 129, 133 (3d Cir.), cert. 

denied,- 479 U.S. 972 (1986); Proctor v. Consolidated _Freightways 

Corp., 795 F.2d 1472, 1475 (9th Cir. 1986). Once- a plaintiff has 

made out a prima facie case, "the burden shifts to the employer to 

show that it was unable reasonably to accommodate the plaintiff's 

religious needs without undue hardship." Turpen, 736 F.2d at 

1026; see also Pyro Mining, 827 F.2d at 1085; Protas,· 797 F.2d at 

134; Proctor, 795 F.2d at 1475. 

The district court in this case fouhd that Toledo.met his 

burden of establishing a prima facie case, and Nobel does not 

contest this finding on appeal. It ~as undisputed at trial that 

the Native American Church is a bona fide religion, Toledo is a 

member of the Church, Toledo's beliefs in its teachings are 

sincere, Toledo uses peyote only as part of church ceremonies, and 

Nobel refused to hire Toledo because of his peyote use. See 

Toledo, 651 F.Supp. at 488. 

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The dispute at trial and in this appeal centers on·the 

district court's findings with respect to reasonable accommodation 

and undue hardship. The court held that Nobel could rebut the 

prima facie case by showing either actual efforts at reasonable 

accommodation or that it could not accomm.odate Toledo's practices 

without undue hardship. The court reject~d Nobel's argument that 

it could not have accommodated Toledo's peyote use without undue 

hardship, but held that the July 10 offer constituted an attempt 

· at reasonable accommodation. 

Nobel argue~ on appeal that the district court erred in 

holding that it could have accommodated Toledo's religious 

practices without undue hardship, but was correct. in finding that 

the July 10 offer was an effort at reasonable accommodation. 

_Nobel also argues that. by. adopting an i_ntractable bargaining 

position, Toledo breac~ed his duty to cooperate with Nobel's 

accommodation efforts. Toledo argues that .the July of fer was a 

settlement offer, and not an accommodation offer. He also claims 

that although the court was correct in holding that Nobel could 

have accommodated his practices without undue hardship, the court 

should not have reached this issue because Nobei failed to prove 

any effort at qccommodation. 

We address in turn whether either settlement offer qualifies 

as a reasonable accommodation under 42 U.S.C. § 200Ue(j), whether 

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Toledo breached any duty to cooperate by refusing these offer~, 

and, finally, whether the district court was correct in aqdressing 

the issue of undue hardship and finding in Toledo's favor. 

A. Accommodation 

Whether a ~ettlement offer made in the context of an 

administrative proceeding on a claim of religious diicrimination 

qualifies as reasonable accommodation under·section 2000e(j) 

appears to be a question of first impression. Rather than relying 

on precedent, therefore, the parties .focus their arguments on the 

. . . ' 

policies behind this provision of Title VII. Nobel correctly 

points out that· Title VII strongly encourages cooperative 

settlements as the primary means for resolving claims of ·. 

discrimination. Nobel argues that including settlement offers 

made in the course of administrative proceedirigs as efforts at 

reasonable ac,commodation will encourage the making of such offers, 

thus furthering the important statutory policy favoring voluntary 

reconciliation.i Toledo· contends in response that this approich 

would encourage employers to adopt a wait-and-see attitude towards 

1 The parties do not addre~s the impact of 42 U.S.C. § 2000e5(b) on this issue. That provision states in pertinent part that 

nothing said or done in the cobrse of administrative proceedings 

may be ''used as evidence in a subsequent procee~ing without the 

written consent of the parties concerned.'' Courts discussing this 

nondisclosure provision have concluded that it promotes voluntary 

conciliation, .undercutting Nobel's argument that the disclosure of 

such offers in litigation furthers voluntary settlement. See, 

~, Olitsky v. Spencer Gifts, Inc., 842 F.2d 123, 127 (5th 

Cir.), cert. denied, 109 S. Ct. 307 (1988). 

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employees with problematic religious practices. He suggests that 

when a~ employee or applicant presents an.employer with a 

religious practice that conflicts with an employment requirement, 

under Nobel's approach the employer would have every incentive to 

discriminate against the employee, knowing that if the employee 

files a complaint it can .absolve itself of liability by attempting 

accommodation at that time. 

We believe that Toledo's position represents the better view. 

It finds initial support in the language and structure of the 

statute, which makes illegal any adverse employment •action 

grounded in discrimination on the basis of religion. 42 U.S.C. § 

2000e-2. Religion is defined as any practice, belief, or 

observan~e which an employer can reasonably accommodate without 

undue ha~dship. 42 U.S.C. § 2000e(j). These provisions of the 

statute together imply _that acting to the det~iment of an. 

applicant or employee because of his religion before attempting 

accommodation is illegal. This reading comports with the Supreme 

Court's conclusion that the effect of the accommodation 

requirement "was to make it an unlawful employment practice . 

for an employer not to make reasonable accommodations, short of 

undue hardship, for the religious practices of his employees and 

. . prospective employees.'' Trans World Airways, 432 U.S. at 74. 

When Nobel rejected Toledo based solely ~n his religious 

practices without an attempt to accommodate him, assuming it could 

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have done so without undue hardship, it committed an illegal act. 

The settlement offer made in response to the administrative charge 

could not undo the completed act. 2 Indeed, the effect in the 

Title VII context of offers of employment is well defined and 

narrow. The Supreme Court has held that after an employee brings 

a Title VII claim, an offer of employment may toll backpay 

liability if the offer is not conditioned on d~opping the 

discrimination charges. See Ford Motor Co. v. EEOC, 458 U;S. 219, 

232-34 & n.18 (1982). Nobel's offer to Toledo was conditioned on 

Toledo dropping the charges, as well as his passing a number of 

tests. We see no reason to give this offer the new power of 

"curing the discriminatory act," when under Ford it would not even 

toll Nobel's liability for backpay. 3 

In addition, Toledo's policy argum·ents are more persuasive. 

Under the rule advoca~ed by Nobel, an e~ployer could absolve 

itself from liability for religious discrimination after it ~ad 

.2 This approach accords with that taken by ~he cpurt in Boomsrna 

v. Greyhound Food Management, Inc., 639 F.Supp. 1448 (W.D. Mich. 

1986), appeal dismissed, 815 F.2d 76 (6th Cir. 1987). The 

employer there suspended an employee for his religiously-motivated 

refusal to work on Sundays, and only then considered shift-trading 

arrangements that might accommodate the employee's religious · practices. The court ~efused to consider these efforts because 

the "defendant. failed to engage in efforts to accommodate 

reasonably plaintiff's reli~ious beli~f against working on Sundays 

until after plaintiff had suffered ad~ersely fo~ adhering to such 

belief." Id. at 1454. 

3 Toledo argues that because the offers constituted settlem~nt 

offers, they should have been inadmissable under Federal Rule of 

Evidence 408. Given our reversal on other grounds, we need not 

address this issue. 

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disadvantaged an employee. When conflicts with religious 

practices first arise, an employer's conduct and the manner in 

which it deals with such conflicts would be virtually unregulated. 

Title VII would provide employees n6 protection until ~fter the 

fact, an important consideration given the impact a suspension,. 

termination, or rejection may have on an individual's life. We 

conclude that the trial court erred in considering Nobel's 

settlement offers as reasonable accommodation which cured Nobel's 

illegal discriminatory act. 

B. Toledo's Duty -to Cooperate 

Nobel correctly points out that an employee or applicant has 

a duty to cooperate with an employer's efforts to accommodate his 

religious practices. The Supreme Court has recently endorsed this 

idea: 

"To the extent it provides any indication of 

congressional intent, ... we think that the 

[legislative] history [of section 2000e(j)] supports our 

conclusion. Senator Randolph, the sponsor of the 

amendm~nt that became [section 2000e(j)], expressed his 

hope that accommodation would be made with 'flexibility' 

and 'a desire to achieve an adjustment.' 118 Cong. Rec. 

706 (1972). Consistent with these goals, courts have 

noted that 'bilateral cooperation i~ appropriate_in the 

search for an acceptable reconciliation of the needs of 

the employee•~ religion and the exigencies of the 

erriployer's business.'" 

Ansonia Bd. of Educ., 479 U.S. at 69 (quoting Brener v. Diagnostic 

Center Hospital, 671 F.2d 141, 145-46 (5th Cir. 1982)). Nobel 

argues that Toledo-breached this duty by rejecting its offers and, 

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without offering a counter-proposal, taking the position that the 

proposed limitations on his religious practices were unacceptable. 

This breach, the argument continues, should absolve Nobel from any 

liability under Title VII. 

We disagree. In Ansonia Bd. of Educ. the employee's duty to 

cooperate was ttiggered by th~ employer's initial efforts at 

accommodation. Here, to the contrary, Nobel did not attempt to 

accommodate Toledo's beliefs before it refused to hire him. 

"[T]he statutory burden to accommodate rest_s with· the employer," 

Brener v. Diagnostic Center Hospital, 671 F.2d 141, 146 (5th Cir. 

1982), and the employee's "duty to make a good faith attempt ·to 

satisfy his needs·through means offered by the employer," is 

irrelevant until the employer satisfies its initial obligation 

under the statute. Id.; see also Anderson v. General Dynamics 

Convair Ae.rospace Div.,· 589 F.2d 397, 401 (9th Cir. 1978) ("The 

buiden was upon the [employer], not .(the employee], to undertake 

initial steps toward accommodation. [The employer] cannot excuse 

[its] failure to accommodate by pointing to deficiencies ... in 

[the employee's] suggested accommodation."), cert. denied, 442 

U.S. 921 (1979). Because the accommodation offer came after the 

initial unlawful refusal to hire, we conclude that Toledo did not 

breach his duty to co6perate with Nobel in reaching a reasonable 

accommodation. 

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C. Undue Hardship 

The court below held that Nobel could accommodate Toledo's 

religious use of peyote without undue hardship. Toledo argues 

that any claim of undue hardship should not be considered by a 

court when the employer has not met its burden of coming forward 

with evidence of attempts at reasonable accommodation. 

In support of this position Toredo cites language from a 

decision of this court and from decisions of a number of other 

courts of appeals. 4 • For example, in Wi)liams v. Southern Union 

Gas Co., 529 F.2d 483, 489 (10th Cir.), cert. denied, 429 U.S. 959 

(1976), we stated that the employer "had a duty to at least try to 

accommodate [the plaintiff's] religious practices." Toledo 

acknowledges, however, that one could infer from language in 

another of our cases that an employer may show reasonable 

4 Language from two Ninth Circuit opinions arguably supports 

Toledo's position. See Anderson v. General Dynamics Convair 

Aerospace Div., 589 F.2d 397, 401 (9th Cir. 1978)" ("the burden was 

thereafter upon [the emplo~er) and the Union to prove that they 

made good faith efforts to accommodate [the employee's) religious 

beliefs and, if those efforts were unsuccessful, to demonstrate 

that they were unable reasonably to accommodate his beliefs 

without undue hardihip."), cert. denied, 442 U.S. 921 (197~); 

Burns v. Southern Pac. Transp. Co., 589 F.2d 403, 406 (9th Cir. 

1978) ("Once the employer has made more than a negligible effort 

to accommodate the employee and that effort is viewed by the 

worker as inadequate, the question becomes whettter the further 

accommodation requested would constitute 'undue hardship.'"·) 

(citation omitted), cert. denied, 439 U.S. 1072 (1979). In both 

of these cases, however, the court went on to address and reject 

the claim that any accommodation would constitute undue hardship 

as ·a matter of law. 

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accommodation·or undue hardship. See Pinsker, 735 F.2d at 390 

("Simply put, Title VII requires reasonable accommodation or a 

showing that reasonable accommodation would be an undue hardship 

on the employer."). 

We are not convinced that these two quotations are 

inconsistent is a practical matter, because neither was 

dispositive of any issue in the case. Both cases affirmed lower 

court holdings for employers based on findings of reasonable 

accommodation and thus were not concerned with the proper way to 

deal with cases involving no attempt at accommodation. Because we 

can find nci indication in either opinion that the panel intended 

to resolve this issue, we turn to the merits. 

Nobel's position is in line with that taken explicitly by the 

Sixth Circuit: 

"[I)t is possible for an employer to prove undue 

hardship without actually having undertaken any of the 

possible accommodations, and we must determine whether 

the [ employer l. has made such showing in this case." 

Draper v. United States Pipe & Foundry Co., 527 F.2d 515, 520 (6th 

Cir .. 1975); see also Pyro Mining Co., 827 F.2d at 1086. We 

believe this is the more reasonable approach, for it is certainly 

conceivable that particular jobs may be completely incompatible 

with particular religious practices. It would be unfair to 

require employers faced with such irreconcilable conflicts to 

attempt futilely to resolve them .. Employers faced with such 

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conflicts should be abl~ to meet their burden by showing that no 

accommodation is possible. 

Although conceivable, such situations will also be rare. We 

therefore will be "skeptical of.hypothetical hardships." Draper, 

'527 F.2d at 520. "The employer is on stronger ground when he has 

attempted various methods of accommodation and can point to 

hardships that actually resulted." Id. Indeed, deciding the 

issue of undue hardihip without some background of attempted or 

proposed accommodation is best resolved by examining the specific 

hardships imposed by specific accommodation proposals: 

"With other courts, we recognize that the determination 

'whether a particuiar accommodation works an undue 

hardship on ~ither an employer or union must be made by 

considering "the particular factual context of·each 

case."'" 

Protas, 797 F.2d at 134 (quotihg Tooley v. Mattin-Marietta Corp., 

648 F.2d 1239, 1243 (9th Cir.), cert. denied, 454 U.S. 1098 

(1981)). 

Accordingly, we hold that an employer who has made no efforts 

to accommodate the religious beliefs of an employee or applicant 

before taking acti6n against him may only prevail if it shows that 

no accommodation could have been made without undue hardship. 

Absent this showing, failure to attempt some re..a.sonable 

accommodation would breach the employer'.s duty to initiate 

accommodation of religious practices. 

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On appeal, Nobel asserts three arguments supporting the claimthat no accommodation is possible in this case. First, it claims 

that hiring an active member of the Native American Church would 

place it iri violation of Federal Department of Transportation 

(DOT) regulations regarding drug use by truck drivers~ Second~ it 

claims that any use of peyote is illegal, and that hiring a user 

of an illegal drug would violate its own policies and its truck 

lease agreement. Finally, it claims that knowingly hiring a 

peyote user would expose it to unaccept~ble liability risks. We 

address each argu~ent in turn. 

Nobel claims here, as it· did at triali that DOT regulations 

made hiring Toledo illegal. The relevant regulation in effect at 

the time of Toledo's application stated: 

''(a) No p~rson shall operate, or be in physical control 

of, a motor vehicle if he possesses, is under the 

influence of, or is us~ng, any bf the following 

substances: 

(1) A narcotic drug or any derivative thereof; 

(2) An amphetamine or any formulation thereof 

(including, but not limited to, 'pep pills' and 

'bennies'); 

(3) Any other substance, to a de~ree which renders him 

inc~pable of safely operating a motor vehicle." 

49 C.F.R. § 392.4 (1983). 

The distric~ court correctly noted that although peyote is 

neither a narc6tic nor an amphetamine, it could render a driver 

"incapable of safely operating a motor vehicle" and thus falls 

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under subsection (3) of the regulation. The court also correctly 

"interpret[ed] the regulation to pr6hibit possession, driving 

under the influence of, or use (consumption) of peyote while 

operating or physically controlling a truck. It does not prohibit 

use or possession while off duty." Toledo, 651 F.Supp. at 489. 

The court found that Toledo never used peyote outside of religious 

ceremonies, and that Nobel could have ensured compliance with the 

reguiation by requiring Toledo to take a day off after each 

ceremony. This finding of fact is not clearl1 erroneous, and we 

do not disturb it on appeal. See Pyro Mining, 827 F~2d at 1089; 

Protos,. 797 F.2d at 134-35; Turpen, 736 F.2d at 1026; Williams, 

529 F.2d_at 489. 

The district court's reasoning with respect to the amended 

version of the regulation, which took effect on December 5, 1984, 

is similarly- correct. The amended version reads: "(a) No driver 

shall be on duty and possess, be under the influence of~ or use, 

any of the following drugs or other substances: (1) any Schedule 

I drug or substance identified in Appendix D to this 

subchapter. '' 49 C.F.R. § 392.4(1) (1987). Although peyote 

is included as a Schedule I substance, the new regulation still 

prohibits only on-duty conduct. The same accommodation would keep 

Nobel and Toledo in cornpiiance, and allow Toledo to continue his 

religious practices. 

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Nobel argues next that peyote is an illegal drug, and that 

hiring a user of an illegal drug would violate its own policies 

and its truck lease agreement with Ryder Trucks. The district 

court rejected this. argument by notirtg that although peyote is a 

Schedule I illegal drug ~nder the Controlled Substance Act of 

1970, 21 U.S.C. § 812(c) Schedule I(c)(l2) (1982), religious use 

of peyote by members of the Native American Church has been made 

legal by regulation. See 21 C.F.R. §-1307.31 (1988) ("The listing 

of peyote as a controlled substance in Schedule I does not apply 

to the nondrug use of peyote in bona fide religious ceremonies of 

the Native American Church .... "); see generally Employment 

Div., Dep't. of Human Resources v. Smith, 108 S.Ct. 1444, 1451 

n.15 (1988); Peyote Way Church of God, 742 F.2d at 197-98; Native 

American Church of New York, 468 F.Supp. at 1248. Bona fide 

religious use of peyote is also explicitly made legal by statute 

in New Mexic.o and Colorado, the two states in which Toledo would 

have driven. See N.M. Stat. Ann. § 30-31-6(0) (1987); Colo. Rev. 

Stat.§ 12-22-317(3) (1985),· 

·The district court disposed of Nobel.' s argument as follows: 

"Nobel's lease with .Ryder, from whom it leased all its 

trucks, provided that Ryder could remove any driver, 

cancel its lease or cancel its insurance if any dri~er 

used drugs or operated trucks under the influence of 

drugs which impair the driver's ability to.-0perate the 

truck. The Ryder Safety Manual also prohibited 'drug 

abuse'. As indicated above, Toledo's use of peyote was 

not an illegal use, so did not violate Nobel policy. By 

requiring Toledo to take a day off after each use of 

peyote, Nobel would have been complying with the Ryder 

lease terms on use or being under the influence of drugs 

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while on t~e job. Toledo's religious use was not drug 

abuse. Therefore, neither Nobel nor Ryder policies 

prevented Nobel from hiring Toledo with the reasonable 

restriction of requiring Toledo to take a day off after 

each use." 

Toledo, 651 F.Supp. at 491. The meaning of the federal regulation 

and New Mexico statutory exemption are evident and undisputed. A 

review of the record has convinced us that the district court's 

findings regarding the Ryder lease and Nobel policy are not 

clearly erroneous. 

The only argument left to Nobel; and th~ one which figures 

most prominently in its brief, is that the regulatory exemption of 

peyote, promulgated hy the Attorney General,· exceeded the Attorney 

General's regulatory authority under the statute. Nobel claims · 

that the Attorney General mai only employ criteria set out in the 

1970 statute in exempting substances from Schedtile I, and that the 

religious exemption is not supported by any of these criteria. 

Nobel also argues the Attorney General does riot have power to make 

partial exemptions under the statute. 

We note initially that considerable legislative history, some 

cited by the trial court, indicates that when Congress passed the 

1970 statue, it did so intending that the exemption contained in 

the previous statute for peyote use associated y.ijth the Native . . . 

American Church be preserved by regulation. See Toledo, 651 

F.Supp. at 490; see also Native American Church of New York, 468 

F.Supp. at 1250-51 (discussing legislative history). More 

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importantly, two criteria appear in the statute which would 

justify the regulatory exemption: 

''In making any finding under subsection (a) of this 

section or under subsection (b) of section 812 ... , .the Attorney General shall consider the following 

factors with respect to each drug or other substance 

proposed to be controlled or removed from the schedules: 

11 (1) Its actual or relative potential for abuse. 

II 

11 (4) Its history and current pattern of abuse. 

II II 

21 U.S.C. § 811 (c) (1982). Both the lessened potential for abuse 

in the religious context and the history of religious use of 

peyote support the exemption. We therefore reject Nobel's 

argument, and agree with the district court's disposition of this 

claim of undue hardship. 

Nobel's final claim of undue hardship is ~hat hiring a known 

user of peyot~ wouid expose Nobel to the risk of incr~ased tort 

liability should Toledo cause an accident while in its employ. 

The district court rejected this argument on two grounds: that 

Toledo's known peyote use.would not expose Nobel to new lawsuits, 

but only _to additional liability in suits that already could be 

broughi against it under the doctrine of iespondeat superior; and 

that the legality of peyote and restrictions on.~oledo's work 

after ceremonies would virtually eliminate this risk. See Toledo, 

651 F.Supp. at 491. Nobel responds that this holding do~s not 

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adequately consider all the nuances of the tort of negiigent 

entrustment and Nobel's potential exposure to punitive damages. 

An accommodation that requires an employer to bear more than 

a "de minimis" burden imposes undue hardship. See Trans World 

Airways, 432 U.S. at 84. Any proffered hardship, however, must be 

actual; "[a]n employer ... cannot rely merely on speculation." 

Pyro Mining, 827 F.2d at 1086; see also Tooley v. Martin-Marietta 

Corp., 648 F.2d 1239, 1243 (9th Cir.) ("A claim of undue hardship 

cannot be supported tiy merely conceivable or hypothetical 

hardships .... The magnitude as well as the fact of hardship 

must· be determined by examipation of the facts of each case.''), 

cert. denied, 454 U.S. 1098 (1981). 

We are convinced that the risks of increased liability 

6reated by hiring Toledo are too speculative to qualify as undue 

hardship. As the distri'.ct court found, accommodating Toledo's 

practices by requiring him to take a day off after each ceremony 

would virtually eliminate the risk that the irifluences of peyote 

w6uld cause an accident or be a factor in subsequent litigation. 

This finding in turn depends on the district court's previous 

factual determinations that the doses of peyote Toledo ingested at 

ceremonies would have diss_ipated after a day'_s r;.est. See Toledo, 

651 F.Supp. at 487, 489, 491. These findings are all well 

supported by the record and are not clearly erroneous. 

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Nobel failed to show that accommodation of Toledo's prac'tices 

without undue hardship was impossible.· Its refusal to hire him· 

therefore constituted a violation of Title VII's prohibition 

against employment discrimination based on religion. 5 

5 As the discussion in Part IIC on undue hardship indicates; 

the instant case is clearly di~tinguishable from Smith v. 

Employment Div., 307 Or. 68, 763 P.2d 146 (1988); cert. granted, 

109 S.Ct. 1526 (1989). In Smith, a county employee was discharged 

from his position as an alcohol abuse counselor for the off-duty 

religious use of peyote, and was subsequently denied unemployment 

compensation. Smith contended that the state's denial of benefits 

impermissibly burdened his right to the free exercise of his 

religion guaranteed by the First Amendment. The Oregon Supreme 

Court agreed, holding: 

"We conclude that the Oregon statute against possession 

of controlled substances, which include peyote, makes no 

exception for the sacramental use of peyote, but that 

outright prohibition of good faith religious. use of 

peyote by adult members· of the_ Native American Church 

would violate the First Amendment directly and as 

interpreted by Congress. We therefcire reaffirm our 

holding that the First Amendment entitles petitioners to 

unemploymerit compensation." 

Id. at 148 (footnote omitted). The-Supreme Court granted 

certiorari to consider whether the First Amendment's Free Exercise 

Clause protects a person who uses peyote for religious purposes 

from prosecution under a state criminal statute. See 57 U.S.L.W. 

3593. 

In the instant case, no state action is involved and the 

First Amendment is therefore not implicated. Instead, the issue 

is whether Nobel's conduct violates Title VII. -~oreover, and more 

importantly for purposes of the specific arguments Nobel raises 

here, while the religious use of peyote is subject to criminal 

prosecution. in Oregon, .it is exempt from prosecution in all 

jurisdictions with any relevance to this case. See supra at 22-

23. 

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III. 

BACK PAY 

Th~ district court reached two distinct conclusions with 

respect to backpay. First, it held that ''{s]ince Toledo turned 

down the [July 10] offer to be hired, the only possible damages 

owed to Toledo are four months of bac~ wages reduced by the amount 

Toledo earned during that time." Toledo, 651 F.Supp. at 492. The 

court thus held that the July 10 offer tolled Nobel's liability 

for backpay. Second, the court concluded that Toledo failed to 

prove the appropriate amount of backpay at trial. Toledo 

questions both of these conclusions. 

It is true ''that a·Title VI1 claimant's rejection of a 

defendant's job offer normally ends the defendant's ongoing 

responsibility for backpay." Ford Motor Co., 458 U.S. at 241. 

Under Ford, however, this rule applies only if the offer of 

employment is not conditioned on dropping the Title VII claim. 

Id. at 232 n.18; see also Figg v. Quick Fill Corp., 766 F.2d 901, 

903 (5th Cir. 1985). As we have previously noted, Nobel's offer 

to Toledo was conditioned on Toledo dropping hii claim, as well as 

his passing a polygraph test and physical examination. Because 

the offer .was not unconditional, the district co.urt erred in 

concluding thai Nobel could potentially be liable for backpay 

covering only the four-month period before the offer. Moreover, a 

rejected offer of reinstatement does not end ongoing backpay 

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liability if the claimant '.s rejection of the of fer was reasonable 

given the form of the offer and the circumstances surrounding it. 

See Giandonato v. Sybron Corp., 804 F.2d 120, 124 (10th Cir. 

1986); see also Kilgo v. Bowman·Transp.", Inc., 789 F.2d 859, 879 

(11th Cir. 1986) (holding that invitation to apply for position is 

not unconditional offer of employment, and citing cases); Orzel v. 

City of Wauwatosa Fire Dept., 697 F.2d 743, 757 (7th Cir.) (offer 

to reinstate age discrimination claimant conditioned on claimant 

passing physical.did not toll backpay liability where claimant 

reasonably believed that employer considered him physically 

unqualified), cert. denied, 464 U.S. 992 (1983). 

The district court also stated that Toledo failed to 

establish at trial the "four months of back wages reduced by the 

amount Toledo earned during that time." Toledo, 651 F.Supp. at 

492. The relevance of this statement is compromised by our 

holding that Nobel is. liable for backpay past the July 10 

settlement offer. In addition, the legal and factual basis for 

the statement is unclear. Toledo cites to evidence in the record 

from which both his backpay and interim earnings could be 

calculated. See rec., vol. 2, at 317; Def. Ex. P, Jt. App. at 

124-26. Nobel does not dispute this evidence. Instead, it 

interprets the district court's statement as ind_icating that . -

Toledo did not prove the amount of unemploy~ent compensation he 

received during the four month period. Ho~ever, Nobel's own 

exhibit P lists Toledo's unemployment compensation for the per~od 

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from March 12, 1984, to July 1, 1984, as $2~320.00. Moreover, the 

amount of unemployment compensation Toledo received is not 

essential to ascertaining backpay because it is within the 

district court's discretion whether to discount a backpay award by 

the amount of unemployment•compensation earned by the claimant 

during the relevant period. See EEOC v. Sandia Corp., 639 F.2d 

600, 624-26 (10th Cir. 1980). 

Accordingly, we must remand for a determination of. backpay 

liability under the proper standards. In assessing the amount of 

the award to which Toledo is entitled, the court should not 

consider the July 10 offer as tolling liability. In addition, the 

court should take into consideration that once a plaintiff has 

established a violation and presented evidence on damages, "the 

employer has the burden of showing that the dis9riminatee did not 

exercise diligence in mitigating the damages caused by the. 

employer's illegal actions.'' Unite~ States v. Lee Way Motor 

Freight, Inc., 625 F.2d 918, 937 (10th Cir. 1979). 

IV. 

RACE AND NATIONAL ORIGIN DISCRIMINATION 

In his complaint, Toledo asserted a claim of race and 

national origin discrimination under both Title VII and 42 U.S.C. 

§ 1981. Specifically, paragraph 17 of the complaint states: 

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"Defendant's refusal to hire plaintiff because of 

plaintiff's sincere religious use of peyote in 

connection with the bona fide religious activities of 

the Native American Church constitutes discrimination on 

the basis of race and national origin, in violation of 

42 U.S.C. §§ 1981, 2000e-2(a)." 

Rec., vol. I, doc. lat 3. The district court granted summary 

judgment in favor of Nobel on these claims after concluding that 

Tol~do failed to assert facts supporting his claim that Nobel's 

refusal to hire him was due to his race or national origin. 6 

On appeal of a grant of a summary judgment motion, this court 

will review the record in the same manner as the district court, 

and interpret the evidence in the light most favorable to the 

non-moving party. "[T]he plain language of Rule 56(c) mandates 

the entry of summary judgment, after adequate time for discovery 

and Upon motion, against a party who fails to make a showing 

sufficient to establish the existence of an element essential to 

that party's case, and on which that party will bear the burden of 

proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322. 

To prove his Title yII claim, Toledo had the initial burden 

to establish, by a preponderance of the evidence, that he is a 

member of a racial minority, that he was qualified for the 

position and was rejected, and that after he was rejected Nobel 

either continued to seek ap~licants for the posl~ion or filled the 

6 Toledo has abandoned his claim under 42 U.S.C. § 1981 on 

appeal, pursuing only his Title VII claim. 

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Appellate Case: 86-1871 Document: 010110195593 Date Filed: 12/29/1989 Page: 30 
position with a non-minority employee. McDonnell Douglas Coip. v~ 

Green, 411 U.S. 792, 802 (-1973). In his complaint, Toledo alleged 

that Nobel refused to hire him "solely" because of his peyote use. 

Nowhere in his complaint did he assert any racial animus; nowhere 

in the summary judgment record did he point to evidence of any 

racial animus. He did not plead or present evidence that the 

driver position was filled by a non-minority. Throughout the 

proceedings he argued that the "no peyote" requirement is a form 

of discrimination against Native Americans. Without supporting 

allegations or evidence of racial animus apart from the desire for 

peyote-free drivers, -the district court was correct in granting 

Nobel summary judgment. 7 

V • . 

CONCLUSION 

We reverse the .holding of the dLstrict court relieving Nobel 

of liability for its discriminatory failure to hire Toledo. By 

failing to accommodate Toledo's religious practices before 

refusing to hire him, Nobel violated Title VII. The district 

court also erred in concluding that the July 10 settlement offer 

tolled Nobel's backpay liability. The case is remanded to the 

7 Toledo argues on appeal that the trial cou~~ erred in failing 

to employ disparate impact analysis to the Title VII claim. 

Toledo did not argue this theory to the district court, however, 

and we therefore will not consider it on appeal. See Anschutz 

Land & Cattle Co. v. Union Pac. R.R., 820 F.2d 338-;--}44 n.5 (10th 

Cir.), cert~ denied, 484 U.S. 954 (1987). 

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district court for a determination of appropriate remedies. The 

award of fees to Nobel as prevailing party is accor~ingly 

reversed. The district court, on motion of the parties, may 

·revisit the fees issue in light._of the disposition of this appeal 

and any further proceedings below. 

REVERSED AND REMANDED. 

--

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