Opinion ID: 1275328
Heading Depth: 2
Heading Rank: 3

Heading: Award of Back Pay in the Instant Case

Text: The trial court applied an incorrect standard in deciding whether to award back pay to the claimant. The trial court refused to award back pay because the dress code did not amount to such purposeful and invidious discrimination as to prohibit the attainment of gainful employment. [4] However, the act does not seek to eliminate only purposeful and invidious discrimination, but all discrimination. Therefore, the question whether the discrimination is of a purposeful or invidious nature is not controlling. An award of back pay serves two purposes. First, it encourages employers to examine and evaluate conditions of employment with an eye toward eliminating those which have discriminatory effects. Albemarle, supra, pp 417-418, 422. This purpose is not served if back pay is awarded only against employers who purposefully and invidiously impose discriminatory conditions. The unwitting discriminator is equally in need of an incentive to undergo self-evaluation. The second purpose of the back-pay award is to compensate a claimant for economic losses suffered as a result of discriminatory practices. Such losses exist without regard to the attitude with which the employer imposes the discriminatory working conditions. Awarding back pay only for purposeful and invidious discrimination thwarts this second purpose too. The trial court in Albemarle denied back pay for a reason similar to that employed by the circuit court in this case. The Supreme Court of the United States rejected that basis as inconsistent with the purposes of the act: The District Court's stated grounds for denying backpay in this case must be tested against these standards. The first ground was that Albemarle's breach of Title VII had not been in bad faith. This is not a sufficient reason for denying backpay. Where an employer has shown bad faith  by maintaining a practice which he knew to be illegal or of highly questionable legality  he can make no claims whatsoever on the Chancellor's conscience. But, under Title VII, the mere absence of bad faith simply opens the door to equity; it does not depress the scales in the employer's favor. If backpay were awardable only upon a showing of bad faith, the remedy would become a punishment for moral turpitude, rather than a compensation for workers' injuries. This would read the make whole purpose right out of Title VII, for a worker's injury is no less real simply because his employer did not inflict it in bad faith. Title VII is not concerned with the employer's good intent or absence of discriminatory intent for Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation. Griggs v Duke Power Co, 401 US [424,] 432 [91 S Ct 849; 28 L Ed 2d 158 (1971)]. See also Watson v City of Memphis, 373 US 526, 535 [83 S Ct 1314; 10 L Ed 2d 529] (1963); Wright v Council of City of Emporia, 407 US 451, 461-462 [92 S Ct 2196; 33 L Ed 2d 51] (1972). [Emphasis added. Albemarle, supra, pp 422-423. See Albemarle, supra, p 422, n 16; MERC v Reeths-Puffer School Dist, 391 Mich 253, 266-267; 215 NW2d 672 (1974).] Like the United States Supreme Court, we reject the trial court's denial of back pay on the basis of the hospital's alleged good faith. We find that denial of back pay to this claimant would defeat the central purposes of the act. Sparrow Hospital argues that the circuit court's denial of back pay was justified because the claimant failed to mitigate her damages by continuing work at Sparrow Hospital. The hospital argues that the claimant should have mitigated her damages by complying with the discriminatory dress code while simultaneously challenging its validity. [5] The circuit court seems to have shared this same opinion. The hospital points out that the United States Supreme Court in Ford Motor Co v EEOC, 458 US 219, 236; 102 S Ct 3057; 73 L Ed 2d 721 (1982), held that under Title VII, the duty to mitigate requires a wronged individual to accept a subsequent offer of employment from the wrongdoing employer. What the hospital fails to note is that the Supreme Court held that although the offer of employment need not include back pay, it must otherwise be unconditional. Here the hospital's offer of employment was not unconditional. Rather, it was specifically conditioned upon Ms. Cornell's compliance with an unlawful discriminatory dress code. Furthermore, the hospital's position is wholly inconsistent with the purposes of the act. Although the claimant was justified in not complying with the unlawful discriminatory dress code, and thereby denied employment, she would not be made whole for her injuries. Likewise, the employer would not be encouraged to examine its policies with an eye toward eliminating discrimination. The hospital's position would encourage employees to comply with discriminatory practices established by employers, not encourage employers to eradicate such practices. Ms. Cornell was ready, willing, and able to work at all times. She simply refused to comply with the unlawful discriminatory dress code. Ms. Cornell's supervisor refused to allow her to return to work unless she complied with the code, and, when she did not do so, her employment was terminated. While as a general rule, a wrongfully terminated employee seeking damages must accept employment to mitigate damages, either with a different employer or with the same employer, if the job is unconditional except as to back pay, nonetheless, where an employer refuses to allow an employee to return to work unless that employee complies with an unlawful discriminatory condition of employment, the employee has not failed to mitigate damages. The hospital argues that the federal doctrine of constructive discharge prevents Ms. Cornell from receiving an award of back pay. Under that doctrine, an employee who voluntarily quits employment may be deemed constructively discharged, and hence eligible for back pay only when working conditions ... have [become] so difficult or unpleasant that a reasonable person in the employee's shoes would have felt compelled to resign. Bourque v Powell Electrical Mfg Co, 617 F2d 61, 65 (CA 5, 1980), quoting Alicea Rosado v Garcia Santiago, 562 F2d 114, 119 (CA 1, 1977). Courts generally deem the fact of discrimination alone insufficient to justify voluntary quitting, in order to encourage employees to attack discriminatory working conditions within the context of a continuing employment relationship. Bourque, supra, p 66. We are not inclined to address the question whether Ms. Cornell was constructively discharged because the facts indicate that she was actually discharged. As stated above, she was ready, willing, and able to work at all times. The findings of fact of both the hearing referee and the Civil Rights Commission included statements that the dress code was made a condition of Ms. Cornell's employment at the hospital and that Ms. Cornell was terminated and prevented from working as the result of her failure to comply with the requirements of the dress code. In light of the fact-finding of the administrative tribunals and lower courts, we accept the finding that the hospital discharged Ms. Cornell for refusing to comply with the discriminatory dress code. [6] See also EEOC v Sage Realty Corp, 507 F Supp 599, 608, 613 (SDNY, 1981). However, even under the doctrine of constructive discharge we would find Ms. Cornell eligible for back pay because a reasonable employee in her situation would have felt compelled to resign. Sparrow Hospital imposed two different dress codes on its laboratory technologists, a male dress code and a female dress code. The codes were intentionally designed to reinforce sexual stereotypes: men were dressed to look like doctors, and women were dressed to look like nurses. Ms. Cornell complained about the discriminatory nature of the dress code to a member of the committee responsible for designing the codes and to her supervisor several times before the codes became effective. Cornell complied with the male dress code after the codes became effective. She again called her supervisor's attention to the discriminatory nature of the dress code when the supervisor called her away from her work station and sent her home to change clothes. In light of the obviously demeaning nature of the dress code and of her employer's unwillingness to reexamine its dress code, it was reasonable for Ms. Cornell not to return to work. We therefore find that under the doctrine of constructive discharge, Ms. Cornell is entitled to receive back pay. We also reject several aspects of the minority's analysis of the constructive-discharge doctrine. The minority opinion justifies the denial of back pay under the constructive-discharge doctrine for at least two reasons. First, management's ability to manage is impaired when the threat of back pay makes it unable to enforce employment conditions which are arguably discriminatory. Second, emotional distress damages may be available to compensate the victim of discriminatory employment conditions for the period in which the illegal condition was tolerated. These justifications are inadequate and fundamentally undermine the intent underlying the Civil Rights Act. The minority concludes that the analysis it applies is beneficial to both employers and employees. Post, p 584. This is because, the minority argues, The employer cannot ... be made whole retroactively. Requiring the employer ... not [to] enforc[e] a rule whenever an employee considers it discriminatory ... would impair management's ability to manage. In large plants, the result could be disruptive. Post, pp 585-586. No evidence of such disruption and serious impairment in businesses liable for back-pay awards was produced in this case. Certainly the present case demonstrates the very opposite. Unless the very essence of management is the ability to impose discriminatory working conditions upon employees, it is difficult to imagine any harm whatsoever, let alone disruption, Sparrow Hospital would have suffered from not introducing and enforcing its newly adopted dress code. Thus, this is not the case in which to address the problems of disruption and management's ability to manage, assuming they exist. On the other hand, the minority states, [i]f the employee stays on despite the discriminatory condition, the employee can ordinarily be `made whole' retroactively. Post, p 585. Yet, as the minority concedes in a footnote, post, p 585, this Court has never held that mental distress damages are recoverable for employment discrimination. Thus, in fact, the minority is relying on a remedy with which to make the employee whole which may not be available at all. Boscaglia v Michigan Bell, supra, p 316, n 13; Kewin v Massachusetts Mutual Life Ins Co, 409 Mich 401; 295 NW2d 50 (1980); Daley v LaCroix, 384 Mich 4; 179 NW2d 390 (1970). Indeed, as the minority concedes, under its approach, unless mental distress damages are recoverable, a worker who remains on the job would receive nothing for successfully challenging an unlawful discriminatory condition. Post, p 585. Implicit in this acknowledgment is, of course, the recognition that the employer who illegally discriminates is subject to no more than a declaratory judgment that its policy is illegal, or, at worst, to an injunction against continuing the practice. Thus, the minority's analysis removes the spur or catalyst which causes employers ... to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges ... of discrimination, Albemarle Paper Co v Moody, supra, pp 417-418, quoting United States v N L Industries, Inc, 479 F2d 354, 379 (CA 8, 1973). Not only does the minority's analysis eliminate employers' incentives to critically evaluate their employment practices and policies  it also eliminates all incentives for employers to cease and desist from a discriminatory practice once they recognize it as being illegal. Instead, they are encouraged to wait until the declaratory judgment of illegality becomes final  and, indeed, there is no reason for them not to simply institute a new, slightly different, policy and let the employees go through the entire court-process all over again. In fact, the minority's analysis is an incentive, an encouragement, to employers to continue to discriminate. In addition, vulnerability to mental distress damages is far more likely to be disruptive to management than vulnerability to back-pay awards. An award of back pay is a known, relatively easily calculable dollar figure. By contrast, the award of mental distress damages will vary widely from individual to individual and, no doubt, from jury to jury. Management can calculate the financial risk of imposing an arguably discriminatory condition far more accurately when back pay, and not mental distress damages, is an available remedy. An employee who resigns because of an arguably discriminatory condition of employment will not be assured a windfall in the form of back pay if a court later finds that the condition was illegal. The employee is always under a general duty to mitigate damages by seeking other employment, as mentioned above at footnote 5. We conclude that the trial judge improperly overturned the commission's award of back pay.