No. 81-427 IN THE SUPREME COURT OF THE STATE OF MONTANA 1982

LEV1 JAMES SNELLI Petitioner and Appellant,

MONTANA-DAKOTA UTILITIES COMPANY and THE HUMAN RIGHTS COMMISSION OF THE STATE OF MONTANA, Respondents and Respondents.

Appeal from: District Court of the First Judicial District, In and for the County of Lewis and Clark Honorable Peter Meloy, Judge presiding. Counsel of Record: For Petitioner:



### . 

# d& James E. Terry, ~a~, Missouri For Respondents: Crowley,Haughey, Hanson, Toole & Dietrich,Billings,

Montana Jack Ramirez,Billings,Montana Frederick F. Sherwood, Helena, Montana

Submitted on briefs: January 22, 1982

Filed: 

## flpR2

# z19821 Decided: April 22, 1982Mr. JusticeFred J. Weber delivered the Opinion of the Court.

Petitionerappeals from a judgment in the First Judicial District Court, Lewis and Clark County, affirming the decision of the Human Rights Commission (Commission)and dismissing petitioner's employmentdiscrimination action againstMontanaDakota Utilities Company (MDU). We affirm the District Court. Petitionerpresents the following issues for review:

(1) Did the District Court apply the proper standards of review in affirming the findings of the hearing examiner and the Commission? (2) Are the findingsof the hearing examiner adopted by the Human Rights Division and affirmed by the District Court supported by substantial evidence or are they "clearly erroneous?" Petitioner, a NativeAmerican, worked as a serviceman fitter and welder for MDU inWolf Point and Poplar, Montana, from July of 1973 until late September of 1976,when he resigned. He subsequently filed an employmentdiscrimination complaint with the Commission,under section 49-2-501, MCA, alleging that racialharassment had forced his resignation, and seeking compensation for lostwages. Petitioner's complaint was heard on December 21, 1979, before a hearing examiner appointed by the Commission. Witnesses appeared for both petitioner and MDU. Petitioner testified that his foreman,Howard Hveem, pressured and criticized him unjustly, took tools from the truck and blamed him, handled machines in ways that endangered him, ignorantly criticized his welding technique, and directed

### veiled racial slurs at him by making derogatory comments about blacks, and references to Hveem's own youthful clashes with "Assiniboines." According to petitioner, his complaints to his superiorswent unheeded until he quit his job rather than risk a violent confrontation. At that point, Hveemwas replaced as foremanby Jack Sprague,who, upon petitioner's return to work, made efforts to assure petitioner's satisfaction with working conditions,and to socialize with him atwork. Petitioner claimed thatwithin a fewweeks of Hveem's replacement, the rest of the crew "took up for" Hveem, and began to ostracizehim. He said they would bunch together in the coffee room, exchanging derogatory jokes about Indians, and using such words as "fucking Indian"and "blanketass." The jokes and commentswere not obviously addressed to him,he said,but he was only a fewyards away, the only Indian in the room. He said the coffee room door was slammed in his face. He claimed the harassment occurred several times a week until he resigned, although he reported it to his foreman,Sprague. Petitioner said 

### he was particularly reluctant to confront his co-workers because he had twice served time for assault, and was determined not to risk a conflict that could result in his being imprisoned again. He claimed the strain was beginning to undermine his health at the timehe resigned. Finally,petitioner claimed that when he applied for unemployment compensation, he indicated discrimination was the reason for his resignation. He presented no evidence to corroborate that claim. Petitioner'sco-workers and supervisors

## -- those appearing for petitioner aswell as those appearing forMDU 

### -- testified without exception that they had not observed,participated in or heard of any racially-motivated harassment 

### of petitioner;

### he had not complained to them of racial slurs by fellow workers or discriminatory practices by the company. Their testimony presents an uncontradicted description of petitioner as a quiet loner, a good welder and valuable employee, toward whom his co-workers and supervisors felt no racial animus. Witnesses agreed that someMDU machinery moved quickly and could be suddenly and unexpectedly dangerous. But no one had witnessed any near miss they believed to be directed atpetitioner by Hveem, nor had petitioner filed any "nearmiss report." Severalmen testified thatpetitioner had made them aware of his unwillingness to work with Hveem because Hveem's loud criticismmade him nervous;not one said petitioner had mentioned that Hveem showed bias against Indians. Hveem himself agreed that he disapproved of petitioner because of petitioner's reluctance to do "thepick and shovelwork," preferring welding. MDU supervisors testified that, subsequentto petitioner's complaining about Hveem, the foreman was replaced, not because of any racistbehavior

on Hveem's part, but because of his health and his difficulty handling his supervisoryposition. The supervisors also indicated thatMDU has an active affirmative action program and instructs its managementpersonnel that racialdiscrimination is not to be condoned. There was general agreement among MDU employees that rough language and joking are common among MDU crews, and thatmany jokes are told, some about such ethnic groups as North Dakotans,blacks, Norwegians,Poles, and Indians. But they all agreed, including an Indian crewmember, and others whose ethnic groups had been the butt of jokes, that there

was neither malice nor viciousness in the jokes,and thatthe jokes were not directed at petitioner. They testified, also, that the coffee roomwas airconditioned, although the rest of the warehouse was not, and during hot weather someone

was always getting up and slamming the door shut. No one recalled the door being deliberately slammed in petitioner's face, as he claimed. Several of petitioner's supervisors testified that he

or his wife had indicated dissatisfactionwith his salary precipitated his resignation,and that petitioner had never told them he resigned because of racial harassment. The hearing examiner,on June 25, 1980, entered extensive findings of fact and conclusions of law, here included in relevantpart: "PROPOSEDFINDINGS OF FACT

"26. That the testimony of the foreman and other witnesses corroboratedmuch of the testimony of the Charging Party relating to the incidents of the tools; the fight with an Indian in 1936; reprimand for throwing away the welding rods; the near accidents; and the yelling by the foreman;and the preponderance of evidence clearly shows that these incidents did in fact occur.

"32. Thatpursuant to the complaints about the foremanyelling at the Charging Party; the health reasons of the foreman and the inability of the foreman to organize his work and employees, the DivisionManager on December I, 1975,demoted the foreman to gas service man, assigned a new foreman, Jack Sprague, to supervise the gas construction crew and the Charging Party and the Charging Party returned towork.

"37. That the preponderance of the evidence clearly reflects that jokes were told by coemployees some of which related to Indian people and that there was swearing by the coemployees and that some of such swearingwas used in reference to Indianpeople but that none of the jokes or swearingwere directed to the Charging Party.""47. 

### That the Charging Party testified that a few weeks prior to termination he notified the DivisionManager as to his complaints in that he did notwant to work around 'Indian haters.' However, the Hearing Examiner does not find that testimony credible. 

# .

# . and finds the testimony of the DivisionManager and engineermore credible in that the conversations with the DivisionManager and engineer only related to wages. "48. That the Charging Party left employment due to insufficientwages." The hearing examiner concluded that foreman Hveem's actions "didnot reflect racial animus;" that the jokes and profanity among co-workers "did not show racial harassment directed to the Charging Party but was conversation normally associated with constructionworkers;" thatpetitioner did not bring the alleged racial slurs and discriminatory treatment to the attention of MDU management; and finally, that charging party's resignationwas due to a salary dispute,not racial harassment. Petitioner filed exceptions to the hearing examiner's proposed findings of factand conclusions of law. On November 21, 1980, the Commissionheard the exceptions, adopted the hearing examiner's findingsand conclusions,and dismissed petitioner's complaint. Petitioner requested judicial review in the FirstJudicial DistrictCourt,pursuant to 52-4-702,MCA, and oral argumentwas heard on March 24, 

### 1981. Additional briefs were filed. On June 30, 

### 1981, the District Court affirmed the decision of the Commission and dismissed petitioner's complaint. The DistrictCourt opinion emphasized that "[allthough petitioner is seeking judicial review on grounds (a) through (f)

### of S2-4-704MCA no contention is made except as 

### to subdivision (e), i.e., that the decision of the administrativeagency is 'clearly erroneous in view of the reliable,probative and substantial evidence on the whole record' 

# . . ." The ~istrict Court, relying upon section 2-4-704(2), MCA, ("the courtmay not substitute its judgment for that of the agency

as to the weight of the evidence on questions of fact,")and upon similar language in Martinez v. Yellowstone County Welfare Department (1981)

### , Mont. 

### , 626 P.2d 242, 38 St.Rep. 474, concluded that the commissioner's decision was amply supported by evidence and testimony. Petitioner appeals. We noteMartinez' reference to federal case law arising under Title

### VII of the Federal Civil Rights Act of 1964, 42 U.S.C. S2000e et. seq. The Montana Human Rights Act, Title 49, MCA, is closelymodeled after Title VII, and reference to pertinent federal case law is both useful and appropriate. SeeMartinez v. Yellowstone County Welfare Department, Mont. at 

## , 626P.2d at 245, 38 St.Rep. at 477. I. Petitioner argues that the District Court applied the wrong standard of review, i.e., that it erred by limiting its consideration to the sufficiency of the evidence when petitioner had also claimed error of law justifyingmodification or reversalunder section 2-4-704(2) (d),MCA. Petitioner contends that itwas error of law for the Commission to find

(1) "that the ethnic jokes and racial epithets petitioner

was subjected to were not racialharassment," and (2) "that MDU cannot be held liablewhere petitioner did not bring this conduct to the attention of his supervisors." We do not agree. The hearing examiner determined as a matter of fact that (1) ethnic jokes and curses occurred,but they were notdirected atpetitioner, and (2) several employees testified that "noone gave itmuch thought." The hearing examiner concluded that this "did not show racial harassment directed to the Charging Party but was conversation normally associated with construction jobs." It is obvious the hearing examiner determined that the objectionable remarks were merely casual conversation. TitleVII cases indicate that the sensitivity of an employee to casual remarks, isolated incidents of harassment or an occasional racial slur is not sufficient to support a Title VII complaint: 

# ".



# . . [Allthougha pattern of practice of harassment directed at a single employee can violate Title VII, casual or isolated manifestations of a discriminatory environment. such as a few ethnic or racial slurs, may not raise a cause of action. Caric v. Kansas City Chiefs I

-- - stersv. United States. 431 Idi 

### - 

# -- ?ootball 

### -- Club Inc., .2d 87, 88 (8thCir. 1977); Feketev. Steel Corp., 353 F.Supp. 1177, 118G Pa. 1973); see Int'l 

### --- Brhd of TeamU.S. 324, 336 2d 396 (1977)

# ." Bundy v. Jackson (D.C.Cir. 1981), 641F.2d 934, 943n.9 (sexual harassment). "After a painstaking reviewof the transcript, we conclude that as amatter of law the racial slurs, if any,used at Bunny Bread did not violate Title

### VII. We find no steadybarrage of opprobrious racial comment. The use, if any, of racial termswas infrequent,was limited to casual conversation among employees,and with possible rare exceptions was not directed toward appellants." Johnsonv. Bunny Bread Company (8thCir. 1981), 646 F.2d 1250, 1257 (failureof proof of constructivedischarge). "Someof his complaints concerning racial slurs are probably true. On the other hand, it is probably also true that there is nothing which themanagement or leadership of a company like Cameron can do which will totally and absolutely prevent persons from all races from uttering racial slurs. Some stoic and patient acceptance of these slurs ismerely one of the prices that all of us pay for living in a pluralistic society." Buckner

### v. Cameron IronWorks (S.D. Tex. 1979), 23 FEP cases 1092, 1102.The hearing examiner also found as a matter of fact that petitionermade a number of complaints,but they concerned wages, paperwork, and dissatisfactionwith his foreman, Hveem. He concluded that petitioner did not bring alleged incidents of racial harassment to the attention of MDU management. He explicitly did not find crediblepetitioner's claim that he did not want to work around "Indian haters," and had resigned because of discrimination, finding instead thatpetitioner's resignationwas due to insufficientwages. Federal discrimination cases do not penalize an employer for its ignorance of employeemisconduct. "Acontinuing course of harassment by fellow employees cannot be imputed to an employer unless the employer is aware of such harassment and fails to take reasonable steps to remedy the practice. De Grace v. Rumsfeld, 614 F.2d 796, (1stCir. 1980)." Kidd v. American Air Filter Co. (W.D. Ky. 1980), 23 FEP cases 381, 382. 

# ".

. .[P]laintiff must show that the employer failed 'to take reasonable steps to prevent racial harassment. 

# . .' At what point managementmust be deemed to be aware of racial harassment by employees and must take affirmative steps to remedy the situation is disputed. Some courts have refused to find Title VII violations unless supervisory personnel actually participated in the harassment. 

# .

# . The Court believes, however, that the standard for a violation of TitleVII should be stricter than that of actualparticipationby management and supervisory personnel. Ifmanagement knows or should know of incidents of racial harassment that are more than sporadic, it has a responsibility to take reasonable affirmative steps to eliminate such incidents

# ... (Onemay infer from intensity of harassment that management was aware or should have been aware); [citations omitted]." Equal Employment Opportunity Commission

### v. Murphy Motor Freight (D. Minn. 1980), 488 Fed.Supp. 381, 385-386. In both the question of whether the jokes and swearing constituted racialharassment and whether MDU was responsible if the incidentswere not brought to a superior's attention,

### the hearing examiner's conclusions are consistentwith federal case law, and logically flow from his findingsof fact. Petitioner himself stated in his exceptions that what he considered errors of law in the hearing examiner's conclusions necessarily followed from erroneous findings of fact. The District Court correctly assessed petitioner's arguments as a challenge to the sufficiency of the evidence, and properly limited its review to that issue. We also note that a finding of racial harassment would not automaticallymandate a finding of constructivedischarge: "There is no clear standard for constructive discharge in a TitleVII case. In some situations where 'anemployee involuntarily resigns in order to escape intolerable and illegal employment requirements,' a constructivedischargemay be found. Young 

### v. Southwestern Savings 

## -- and Loan ~ssociation;509 F.2d 140, 144 (5thCir. 1975). Contrary to plaintiff's theory,however, the conclusion of constructive discharge does not automatically arise whenever employment discrimination is followed by 

### the victim's resignation. See e.g., Muller v. U. S. Steel Corporation, 509 F.2d 923 (10thFir, 1975), cert. denied, 423 U.S. 825, 96 S.Ct. 39, 46 L.Ed.2d 41 (1975); culiariv. - 

### East-West Gateway Coordinating Council, 457 F.Supp. 335 (E.D.Mo. 1978). A determination of constructive discharge depends on the totality of circumstances,and must be supported by more than an employee's subjective judgment thatworking conditions are intolerable." Nolan v. Cleland (N.D. Cal. 1979), 482F.Supp. 668, 672. It is a matter of degree, a question of fact for the trial court,whether by encouraging, participating in or allowing a knownpervasive pattern of discrimination, against

an employee or a 

### class of employees, the employer has rendered working conditions so oppressive that resignation is the only reasonable alternative. Petitionerhas not challenged the federal cases; rather,he contests the factual determinationswhich led to their application. Finally,petitioner argues that the hearing examiner

### and the District Court failed to follow the procedure set forth in Martinez, supra, for determining whether he had established a prima facie case of discrimination. Hemaintains thatMDU 

### would have had to show a legitimate, nondiscriminatory reason for the apparentdiscrimination, once petitioner had shown that, as amember of a racialminority he suffered damages as a direct result of racially-based disparate treatment, of which his employer was, or should have been,

aware. Petitioner states the standard accurately enough, but ignores the fact that, according to the hearing examiner, he 

### did notmake the requisiteprima facie showing of discrimination. The hearing examiner's findings indicate thatpetitioner did not show thatMDU 

### was or should have been aware of racial harassment directed at him;he did not establish that he was treated differently from his non-minority co-workers; he did not show the ethnic jokeswere directed primarily at Indiansor at him. He did not show that Hveem's actions and criticisms sprang from racial animus. These are factual determinations,to be discussed below. 11. Petitioner argues that the District Court's findingsof fact and conclusionsof law are inconsistent. The record shows that the District Courtmerely recapitulated the history of the case and the hearing examiner's findings and conclusions. Then, in a brief opinion the court set forth the standard for reviewing those findings and, finding ample evidence to support them, affirmed the Commission's order. There is no need to review those facts in detail. Petitioner alone alleged that racial harassmentwas directed at him. He alonemaintained thathe had notified his superiors of the alleged harassment. And he alone testified thathetold his superiors he was resigning because of racial harassment. No other witness corroborated those allegations; no

one recalled any harassment of petitioner, or any complaint by petitioner about harassment. And no one else felt that the jocular, frequently profane, ethnic references between employees were vindictive or directed atpetitioner. Petitioner's superiors testified that the only dissatisfaction petitioner mentioned to them concernedwages, paperwork, and his discomfort with Hveem's criticism. Section 2-4-704(2) provides: 

### " (2) The courtmay not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact." This Court amplified that provision in Martinez, supra: 

# ".

. . In questions of this kind,where the agency is entrusted and charged with administering the statute and making necessary, initial factual determinations,it is well settled that a reviewing court's function is limited. Where factual determinations are warranted by the record and have a reasonable basis in law, they are to be accepted. It is not the court's function to substitute its own inferences of fact for those of an administrative tribunal or agency,where facts are supported by the evidence in the record.

"Wherethe issue (incontroversy) is so close and there is sufficient credible evidence on the record which would allow reaching opposite conclusions,we think that a findingwhich overturns another as being 'clearly erroneous' is an abuse of discretion. Where the District Court's reviewing function is limited, as in this case, the findings of administrative agencies and tribunalsmust be sustainedwhere there is sufficient credible evidence in the record." Martinezv. Yellowstone County Welfare Department, Mont. at 

### , 626 P.2d at 247-248, 38 St.Rep. at 480, citing Standard Chemical Manufacturing Company v. Employment Security Division (1980), Mont. 

## , 605 P.2d 610, 613-614, 37 St.Rep. 105, 108-110. The DistrictCourtproperly found "ampleevidence andtestimony" to support the findings and conclusions of the hearing examiner and the Commission. Petitioner also challenges the logic of several of the hearing examiner's determinations: (1) Petitioner claims that for MDU to assign him to work under Hveem,who knew less about arc welding than did petitioner, is evidence

### of MDU's disparate treatment of him, and the hearing examiner could not reasonably find no discriminatory conduct on the part of MDU. We would point out that Hveem had spent 29 years with MDU, and was, apart from his lack of expertise in arc welding, a reasonable choice for foreman. Furthermore,when certain unjustified reprimands by Hveem of petitioner's arc welding techniquewere brought to the supervisor's attention, Hveemwas directed to stop them. There is no evidence of disparate treatment of petitioner here. (2) Petitioner argues that it ismore reasonable to conclude that the conditions which led to his first resignation were not remedied by MDU and caused his final resignation, than that he left because of insufficientwages. But the weight of the evidence indicates thatpetitioner's dissatisfactionwith Hveem led to his first resignation,and

was remedied by Hveem's replacement by Sprague as petitioner's foreman. Also, when petitioner resigned in 1976,he told two of his supervisorshe was doing so because of dissatisfaction over wages. There is no evidence but petitioner's own testimony,part of which the hearing examiner explicitly found not credible, to supporthis claim that discrimination and harassment forced his resignation. There is no inconsistency here.(3) Petitioner argues that it was not logical for the hearing examiner to find that he resigned over a salary dispute,when the record shows that he refused MDU's offer of more money to do independent welding work for MDU. But the record also shows that the nature of the work offered would have been different. Further,neither the hearing examiner nor the District Court found that petitioner's belief that he had been racially harassed was spurious and unrelated to his resignation. Nor do we. It is entirely possible that petitioner's sensitivity to his co-employeesL conductplayed a part in his decision to resign and his decision not to accept MDU's offer of independentwork. But petitioner has not shown this Court, as he did not show the hearing examiner and the DistrictCourt, that the conduct actually amounted to racial harassment, or that he had brought it to MDU's attention. We do not find petitioner's refusal to accept MDU's offer convincing evidence that petitioner was, in fact,a victim of racial harassment. (4) Finally,petitioner exhorts this Court to "breathe life into the words 'equalopportunity"' by requiring a lower threshold for a finding of racial harassment than that established by the federal courts in Title

### VII cases. We would remind petitioner that this Court has a responsibility to the employer as well as to the employee. Part of that responsibility consists in requiring adequate credible evidence of discrimination before subjecting an employer to the penalties associated with a finding of discrimination. This is particularly importantwhere, as here, there is only

oneperson alleging harassment or discrimination. Itwould be irresponsible for this Court to reverse the ~istrict Court,in the teeth of the hearing examiner's finding that, as to a crucial question of fact, petitioner's testimony was not credible, and despite the District Court's determination that theweight of evidence supported MDU's innocence of constructive discharge. That we decline to do. Affirmed.

We Concur: