Title: Franklin Mfg. Co. v. Iowa Civil Rights Com'n
Citation: 270 N.W.2d 829
Docket Number: 61559
State: Iowa
Issuer: Iowa Supreme Court
Date: October 18, 1978

270 N.W.2d 829 (1978) FRANKLIN MANUFACTURING COMPANY, Appellee, v. IOWA CIVIL RIGHTS COMMISSION, Appellant. No. 61559. Supreme Court of Iowa. October 18, 1978. *830 Richard C. Turner, Atty. Gen., and Shirley G. Steele, Asst. Atty. Gen., for appellant. Squires, Sanders &amp; Dempsey, Cleveland, Ohio, and Kathleen A. Reimer, of Rogers, Phillips &amp; Swanger, Des Moines, for appellee. Reed, Smith, Shaw &amp; McClay, Pittsburgh, Pa., and Leon R. Shearer and Patricia A. Shoff, of Thoma, Schoenthal, Davis, Hockenburg &amp; Wine, Des Moines, for American Chain and Cable Co., Inc., amicus curiae. Considered en banc. LeGRAND, Justice. In this case Kathy John and Vickie Bishop claim they were subjected to discriminatory practices by their employer, Franklin Manufacturing Company (hereafter called Franklin), because of their sex. They were denied disability benefits under Franklin's group insurance plan when they took maternity leaves from their employment. They say this violated § 601 A. 6, The Code, relating to discriminatory employment practices. They filed a complaint with the Iowa Civil Rights Commission § 601 A. 14, The Code. The Commission ruled for the claimants, and Franklin appealed to the district court as authorized by § 601 A. 15, The Code. The district court entered a decree reversing the Commission. The Commission appealed, and we reverse the district court. The following issues are raised for determination: The facts are virtually without dispute. Franklin maintained a Group Insurance Plan for its employees. It purported to cover all non-occupational accidental bodily injury or disease. It provided for weekly disability payments according to a schedule set out in the plan. It specifically excluded payment of benefits for "any period of disability due to pregnancy, or resulting childbirth or miscarriage." Both Mrs. John and Mrs. Bishop took maternity leave in 1973. Mrs. Bishop returned to work after an absence of ten weeks. Mrs. John did not return at all after the birth of her child. Both claimants received medical and hospital benefits under the plan, and it is only the weekly disability payments which were denied them. In finding for the claimants, the Commission ordered Franklin to pay Vickie Bishop $278.57 and Kathy John $228.57. I. One of the grounds relied on by the trial court was that General Electric Co. v. Gilbert, 429 U.S. 125, 97 S. Ct. 401, 50 L. Ed. 2d 343 (1976) dictates a finding for Franklin. In Gilbert the United States Supreme Court held a company insurance plan which excluded disabilities arising out of pregnancy did not constitute sex discrimination in violation of Title VII of the Civil Rights Act of 1964. The case was one of statutory interpretation, limited to construing a federal statute. In Quaker Oats Co. v. Cedar Rapids Human Rights Commission, 268 N.W.2d 862, 866-67 (Iowa 1978), we said we were not bound by Gilbert in construing our own Civil Rights Act, and we declined to follow it. Our holding in Quaker Oats disposes of the argument that Gilbert controls the present appeal. We give that matter no further consideration. II. The second issue is another matter of statutory interpretation concerning the meaning of § 601 A. 12. The Commission relies heavily upon our opinion in Cedar Rapids Community School District v. Parr, 227 N.W.2d 486 (Iowa 1975), but neither that case nor the later Quaker Oats decision touches the question raised here. We set out the statute in full: It is not claimed Franklin's plan is a "mere subterfuge adopted for the purpose of evading" the Civil Rights Act, and the only question therefore is whether this statute exempts all benefit systems or only those relating to retirement. This is a matter of statutory interpretation which involves a determination of legislative intent. Franklin says we should construe the statute to exempt "any retirement plan or [any] benefit system." The Commission urges a more limited interpretation and wants us to say the statute exempts only "any retirement plan or [any retirement] benefit system." In construing statutes, we observe well established rules. We listed a number of these principles in Iowa National Industrial Loan Co. v. Iowa State Department of Revenue, 224 N.W.2d 437, 440 (Iowa 1974), where we said: See also Doe v. Ray, 251 N.W.2d 496, 504-05 (Iowa 1977); Iowa v. Buckley, 232 N.W.2d 266, 270 (Iowa 1975); Domain Industries, Inc. v. First Security Bank &amp; Trust Co., 230 N.W.2d 165, 169 (Iowa 1975). We are mindful, too, of the direction in § 601 A. 16 that we should construe the Civil Rights Act liberally to effect its purpose. We conclude the legislative purpose and intent in enacting § 601 A. 12 was to exempt only those plans or benefit systems relating to retirement. We are convinced any other interpretation would encourage, rather than inhibit, discriminatory policies. That is not what the legislature intended, and we now hold Franklin's Group Insurance Plan is not exempt from the provisions of chapter 601A, The Code. III. We next consider whether permitting the claims of Mrs. John and Mrs. Bishop would, as Franklin contends, violate the Supremacy Clause and the Equal Protection Clause of the Fourteenth Amendment. We believe division I, where we held the federal decisions were not binding on us in construing our own Civil Rights Act, answers the Supremacy Clause argument without need of further discussion. We find no basis for the Equal Protection argument. Franklin cites Geduldig v. Aiello, 417 U.S. 484, 94 S. Ct. 2485, 41 L. Ed. 2d 256 (1975) in support of its position. Geduldig only held the exclusion of pregnancy claims under a California statute quite dissimilar to ours does not violate the Equal Protection Clause. The following language from Geduldig is equally helpful to the Commission in contending the inclusion of pregnancy claims would not violate the Equal Protection provision either: A plan which protects men and women equally from disabilities to which each class is separately subject can hardly be said to treat either unequally. That the risks of one class may not be the same as the risks of the other does not raise an Equal Protection problem. Although not decided on constitutional grounds, City of Los Angeles v. Manhart, *833 435 U.S. 702, 98 S. Ct. 1370, 55 L. Ed. 2d 657 (1978), discusses this same problem in connection with unequal retirement benefits accruing to male and female workers because women live longer than men. Despite this admitted result, the court said the employer could not demand greater contributions from female workers than from male workers. Cf. Cedar Rapids Community School District v. Parr, 227 N.W.2d at 493. We hold there is no merit in Franklin's Equal Protection argument. IV. This brings us to the last issue raised: Is this controversy within the field pre-empted by the National Labor Relations Board for the handling of labor disputes? Franklin's Group Insurance Plan is part of the collective bargaining agreement between Franklin and the representative labor union. Franklin argues the National Labor Relations Board has the exclusive jurisdiction over any dispute arising under the collective bargaining agreement. It is true that in most instances labor disputes arising out of collective bargaining agreements are either exclusively within the jurisdiction of the National Labor Relations Board or, if cognizable in state courts, federal law is to be applied in solving the problems raised. Teamsters Local Union No. 394 v. Associated Grocers of Iowa Cooperative, Inc., 263 N.W.2d 755, 757 (Iowa 1978). Franklin, of course, would like to have federal law applied because it feels the Gilbert case would then require a result favorable to it. The Commission, on the other hand, would naturally prefer that the more favorable interpretations of this court control our decision. One of the exceptions to the pre-emption rule is that issues involving matters of vital state public policy are not pre-empted by the National Labor Relations Act. In Lodge 76, International Association of Machinists &amp; Aerospace Workers v. Wisconsin Employment Relations Commission, 427 U.S. 132, 136, 96 S. Ct. 2548, 2551, 49 L. Ed. 2d 396, 401 (1976), the court said: "Federal labor policy as reflected in the National Labor Relations Act, as amended, has been construed not to preclude the states from regulating aspects of labor relations that involve conduct touching interests so deeply rooted in local feeling and responsibility that * * * we could not infer that Congress had deprived the States of the power to act." See also San Diego Union v. Garmon, 359 U.S. 236, 244, 79 S. Ct. 773, 779, 3 L. Ed. 2d 775, 782 (1959). A number of cases have allowed the state to assert jurisdiction under this doctrine. See Farmer v. United Brotherhood of Carpenters, 430 U.S. 290, 97 S. Ct. 1056, 51 L. Ed. 2d 338 (1977); Automobile Workers v. Russell, 356 U.S. 634, 78 S. Ct. 932, 2 L. Ed. 2d 1030 (1958); Youngdahl v. Rainfair, Inc., 355 U.S. 131, 78 S. Ct. 206, 2 L. Ed. 2d 151 (1957); Automobile Workers v. Wisconsin Employment Relations Board, 351 U.S. 266, 76 S. Ct. 794, 100 L. Ed. 1162 (1956). This rationale has been applied under varying circumstances where the alleged pre-emptive effect of the National Labor Relations Act has been rejected. Farmer v. United Brotherhood of Carpenters, 430 U.S. at 303-305, 97 S. Ct. at 1065-1066, 51 L. Ed. 2d at 352-53 (claim for emotional distress caused by intentional tort); Linn v. Plant Guard Workers, 383 U.S. 53, 61, 86 S. Ct. 657, 662, 15 L. Ed. 2d 582, 589 (1966) (suit for malicious libel); DeCanas v. Bica, 424 U.S. 351, 356-58, 96 S. Ct. 933, 936, 47 L. Ed. 2d 43, 49-50 (1976) (hiring illegal aliens); Simpson v. Providence Washington Insurance Group, 423 F. Supp. 552, 556 (D.C. Alaska 1976) (discrimination against persons over 65); Williams v. International Brotherhood of Boilermakers, 27 Cal. 2d 586, 165 P.2d 903 (1946) (discrimination based on race). In the case now before us we hold the state has an overriding interest under the Iowa Civil Rights Act in protecting its citizens against discrimination based on sex. The present controversy is not pre-empted by the National Labor Relations Act. *834 While we are convinced this disposes of Franklin's preemption argument (including the issue first raised in the amicus curiae brief concerning the Federal Employee Relations Act), we mention one other reason for upholding state jurisdiction. It is the philosophy recently announced in Bald v. RCA Alascom and Teamsters Local 959 (Alaska 1977), 569 P.2d 1328, 1335, from which we quote: See also Maine Human Rights Commission v. United Paperworkers, 383 A.2d 369, 379, 380, n. 30 (Me.1978); cf. Alexander v. Gardner-Denver Co., 415 U.S. 36, 50-51, 94 S. Ct. 1011, 1020, 1021, 39 L. Ed. 2d 147, 159 (1974). We believe this should be our policy, too, in considering matters arising under the Iowa Civil Rights Act. We adopt it as such. We should, perhaps, mention here Franklin's argument that pregnancy-related conditions are not covered because they are neither an injury nor a sickness, the only risks included in the plan. We believe our decision in Cedar Rapids Community School v. Parr, 227 N.W.2d at 494-95 disposes of this argument. Furthermore, as pointed out in Gilbert, 429 U.S. at 127, 97 S. Ct. at 404, 50 L. Ed. 2d at 350, a significant number of pregnancies lead to complications, either before or after delivery, which would be classified as sickness under any definition. The exclusion of all pregnancy-related conditions is thus clearly discriminatory. Franklin also asks us to deny the claims of Mrs. John and Mrs. Bishop because pregnancy is both a "voluntary and desirable" condition. We reject this argument. While the act of sexual intercourse is voluntary, pregnancy is not necessarily the intendedor desiredresult. This is one factor which distinguishes pregnancy from two other "voluntary" conditions to which Franklin refers. In vasectomies, for instance, the result is the very one for which the operation was performed. The same is true of an intestinal by-pass. Such exceptions, which incidentally are not excluded by the terms of the plan, are distinguishable from pregnancy-related disabilities. Our holding is limited to employer-employee rights under chapter 601A. It does not purport to limit the elimination of pregnancy risks from private insurance plans. City of Los Angeles v. Manhart, 435 U.S. at 718, 98 S. Ct. at 1380, 55 L. Ed. 2d at 671; Quaker Oats Co. v. Cedar Rapids Human Rights Commission, 268 N.W.2d at 865. V. We have considered all the arguments made on behalf of Franklin, including those advanced in the amicus curiae brief. For the reasons given, the judgment of the district court is reversed and the case is remanded for entry of judgment for the Commission. REVERSED and REMANDED. All Justices concur except HARRIS, J., who dissents, and ALLBEE, McGIVERIN, and LARSON, JJ., who take no part. *835 HARRIS, Justice (dissenting). In accordance with the views expressed in my dissent in Quaker Oats Co. v. Cedar Rapids Human Rights Commission, 268 N.W.2d 862, 868 (Iowa 1978), I respectfully dissent. I would affirm the trial court.