Opinion ID: 2781834
Heading Depth: 4
Heading Rank: 1

Heading: For an employer to refuse to hire or employ or to

Text: bar or discharge from employment, any individual because of his race, sex, age, religion, color or ancestry, provided that an employer may refuse to hire an individual for good cause relating to the ability of the individual to perform the work in question . . . . See 1963 Haw. Sess. Laws Act 180, § 1 at 223, codified at RLH § 90A-1, recodified to HRS §§ 378-2 and 378-3 (emphasis added).13 Thus, as enacted, the law explicitly linked the authority to refuse to hire or discharge to “good cause relating to the ability of the individual to perform the work in question.” As explained by the Senate committee report, specifically referring to section (1)(a) of Act 180, the policy supported by the law was to “afford all persons equal opportunities in employment . . . with the qualifications of the applicants being the sole test in selecting employees.” 1963 Senate Journal at 866 (emphasis added).14 13 The minority asserts that “the 1963 version [of the statute] was unclear.” Minority at 25. However, the minority declines to demonstrate the alleged lack of clarity. 14 In full, the passage provides as follows: This bill does not give minority group members any special privileges in obtaining employment but afford [sic] all persons equal opportunities in employment regardless of race, sex, age, religion, color or ancestry with the (continued. . .) - 31 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Section 1(a) of the bill provides in part that an employer may refuse to hire an individual for good cause relating to the ability of the person to perform the work in question[]. An employer may refuse to hire an individual for justifiable and reasonable cause. In this connection, the employer may, depending on the job, consider the training, experience, intelligence, personality and appearance of the applicant where any or all of these factors are applied equally to all applicants and are determinative in the selection of the best qualified.[15] Id. at 867 (emphases added) (internal quotation marks omitted). Chapter 378 therefore does not prohibit an employer from refusing to hire an individual for reasons that are applied equally to all applicants and are “relat[ed] to the ability of the individual to perform the work in question.” HRS § 378-3(3) (emphasis added). Thus, a “legitimate, nondiscriminatory reason” not to hire a person, in view of the purposes and statutory provisions of HRS Chapter 378, must be a reason related to the “ability of the individual to perform the work in question.” b. Subsequent recodification did not alter the intent of the legislature RLH § 90A-1 was recodified to HRS Chapter 378 in 1981 and reorganized with the addition of protections for women and government workers. 1981 Haw. Sess. Laws Act 94, §§ 1-3 at 184- (. . .continued) qualifications of the applicants being the sole test in selecting employees. 1963 Senate Journal at 866. 15 Appearance cannot include color or racial characteristics. 1963 Senate Journal at 867. - 32 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 89. Reformation or reenactment of a statute does not alter the purpose or intent of a law unless that is the express intent of the legislature. Muniz v. Hoffman, 422 U.S. 454, 470 (1975) (“It will not be inferred that the legislature, in revising and consolidating the laws, intended to change their policy, unless such an intention be clearly expressed.” (emphasis added)). If a revised statute is ambiguous or susceptible of two constructions, reference may be made to the prior statute for the purpose of ascertaining intent. But mere differences in words or arrangement should not generate an inference of legislative intent to change the former rule. A revision will not be construed as altering a particular statute absent a clear, unmistakable legislative intent. Le Mars Mut. Ins. Co. of Iowa v. Bonnecroy, 304 N.W.2d 422, 424 (Iowa 1981) (emphasis added) (citations omitted); see also Pye v. State, 919 A.2d 632, 637 (Md. 2007) (“[A] change in a statute as part of a general re-codification will ordinarily not be deemed to modify the law unless the change is such that the intention of the Legislature to modify the law is unmistakable.”). As stated by the legislature, the purpose of the 1981 revisions was to “extend coverage of Part I (Discriminatory Practices) of the Employment Practices Act, Chapter 378, Hawaii Revised Statutes, to Employees of the State and county governments to help ensure that women are provided equal treatment in employment when disabled because of pregnancyrelated conditions, and to clarify policies and procedures in the area of enforcement with respect to unlawful or - 33 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER discriminatory employment practices.” H. Stand. Comm. Rep. No. 549, in 1981 House Journal, at 1166 (emphases added). Thus, the express intent of the 1981 legislature was to expand the safeguards offered by the employment discrimination provision of HRS Chapter 378. In contrast, the legislative history does not reveal any intention to alter the fundamental purposes of the employment discrimination law or to reduce its protections. Therefore, the 1963 legislative history continues to provide a significant and reliable averment that the purpose of HRS § 378- 2 is to “afford all persons equal opportunities in employment . . . with the qualifications of the applicants being the sole test in selecting employees.” 1963 Senate Journal at 866; see Muniz, 422 U.S. at 470. As recodified, HRS § 378-3(3) preserves the intent of the legislature. In the 1981 revision, the legislature shifted language “provid[ing] that an employer may refuse to hire an individual for good cause relating to the ability of the individual to perform the work in question,” 1963 Haw. Sess. Laws Act 180, § 1 at 223, to “Nothing in this part shall be deemed to . . . [p]rohibit . . . an employer . . . from refusing to hire . . . any individual for reasons relating to the ability of the individual to perform the work in question.” HRS § 378- 3. Thus, following the recodification, the substance of the statute is identical: in 1963 the language provided an exception - 34 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER to the prohibition against discriminatory hiring or discharging practices and the language continues to do so in the 1981 revision, underscoring the fact that the legislature has provided no indication that the purpose of the statute has been altered. Nonetheless, the minority maintains that the purpose and intent of HRS § 378-2 was transformed based on the 1981 recodification. Minority at 24-25. However, the minority does not provide any legislative history to support its contention that the 1981 revision was intended to alter the purpose of HRS Chapter 378. See Minority at 22-26. Thus, the interpretation of the minority must be rejected as the legislature did not express any intent to change the policy of the statute. Muniz, 422 U.S. at 470; Le Mars Mut. Ins. Co., 304 N.W.2d at 424 (“A revision will not be construed as altering a particular statute absent a clear, unmistakable legislative intent.”).16 16 Although the minority contends the 1963 legislative history is irrelevant, minority at 26-27 n.6, it nevertheless also disputes the interpretation of certain passages from the 1963 Senate Journal. Id. The minority argues that statements from the journal “that reference the qualifications of the applicant,” “when viewed in context, [] appear to be general statements of support for equal opportunity, and not directives to employers to base their hiring decisions solely on an applicant’s qualifications.” Minority at 26 n.6. Respectfully, the legislature’s statement that “This bill . . . afford[s] all persons equal opportunities in employment . . . with the qualifications of the applicants being the sole test in selecting employees,” 1963 Senate Journal at 866 (emphasis added), is much more than a “general statement of support,” especially when viewed in conjunction with the specific statutory language adopted by the legislature in RLH § 90A-1. 1963 Haw. Sess. Laws Act 180, § 1 at 223, recodified at HRS §§ 378-2 and 378-3. - 35 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER The minority alternatively argues, “Even if the Majority is correct that the purpose of the current statute remains the same as the 1963 version, our plain reading interpretation of the current statute is consistent with that legislative purpose when viewed in light of the whole legislative history.” Minority at 26 (emphasis added). The minority’s argument does not provide the context by which to understand its reference to the “light of the whole legislative history” or provide legislative history that contradicts the 1963 legislature’s intent as described above. Thus, if the purpose of the current statute “remains the same as the 1963 version,” then the minority’s “plain reading interpretation” of the current statute is pointedly inconsistent with the “whole legislative history.” Finally, the minority contends that when the 1963 legislature made the statement that the qualifications of the applicants shall be the sole test in selecting employees,17 “the legislature was addressing concerns that the statute might create special preferences (such as hiring quotas) for minorities.” Minority at 26 n.6. The minority does not present any authority in support of a legislative concern regarding “special preferences.” Surely, the right of individuals 17 See supra note 14 for the full text of the “sole test” statement. - 36 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER protected under HRS § 378-2 to expect that their ability to perform the work in question will be the “sole test” in an employment decision, subject to the exceptions of HRS § 378-3, which is not a “special preference” but rather the embodiment of the protection that HRS Chapter 378 guarantees. c. Principles of statutory construction reinforce the legislature’s intent When construing a statute, our foremost obligation is to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language of the statute itself. Kauai Springs, Inc. v. Planning Comm’n of Cnty. of Kauai, 133 Hawaiʻi 141, 163, 324 P.3d 951, 973 (2014). We must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose. Id. Additionally, “Laws in pari materia, or upon the same subject matter, shall be construed with reference to each other.” HRS § 1-16. Further, when construing a statute, courts are “bound to give effect to all parts of a statute, and no clause, sentence, or word shall be construed as superfluous, void, or insignificant if a construction can be legitimately found which will give force to and preserve all words of the statute.” Fagaragan v. State, 132 Hawaiʻi 224, 241, 320 P.3d 889, 906 (2014) (citation and alteration omitted). - 37 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER HRS §§ 378-2 and 378-3 both concern lawful employment practices. Thus, in order to give effect to HRS § 378-2, the prohibitions of that section must be read together with HRS § 378-3. See HRS § 1-16. In HRS § 378-3, the legislature has provided a list of eleven specific exceptions to the employment discrimination prohibition of HRS § 378-2. For instance, as stated, the legislature permits an adverse employment decision when the reason for that decision is related to the person’s ability to perform the work in question. HRS § 378-3(3). Other exceptions, inter alia, allow religious organizations to give employment preference to individuals of the same religion, HRS § 378-3(5), and exempt employers from having to make “unreasonable” structural changes or “expensive” equipment alterations to accommodate a person with a disability.18 HRS § 378-3(7). Statutory lists may be interpreted under the principle of expressio unius est exclusio alterius; i.e., the express inclusion of certain items in a statutory list implies the exclusion of others and of alternatives. Fagaragan, 132 Hawaiʻi at 242, 320 P.3d at 907. This principle applies equally to a statutory list of exceptions; when the legislature has created certain exceptions, “it does not follow that courts have 18 For a summary of all the exceptions, see supra note 8. - 38 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER authority to create others.” United States v. Johnson, 529 U.S. 53, 58 (2000). The “proper inference” from a list of exceptions to a statute is that the legislature “considered the issue of exceptions and, in the end, limited the statute to the ones set forth.” Id.; see also Thurston v. Bishop, 7 Haw. 421, 442 (Haw. Kingdom 1888) (“The rule of construction, expressio unius est exclusio alterius, then, ought to exclude all other exceptions.”). In Hawaiʻi, the principle of expressio unius est exclusio alterius is applicable “where in the natural association of ideas the contrast between a specific subject matter which is expressed and one which is not mentioned leads to an inference that the latter was not intended to be included within the statute.” Int’l Sav. & Loan Ass’n, Ltd. v. Wiig, 82 Hawaiʻi 197, 201, 921 P.2d 117, 121 (1996). Thus, in applying the rule of construction, expressio unius est exclusio alterius, this court looks to the contrast provided by the natural association of ideas expressed in the statutory list. Id. Here, there is a decided contrast between the eleven specific exceptions presented by HRS § 378-3 and potential exceptions that are not mentioned. For example, there is a clear delimitation intended by the legislature’s reference in HRS § 378-3(5) to “religious or denominational institution[s] or organization[s],” such that a contrast is clearly implied that the legislature did not intend that private businesses - 39 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER could also give employment preference to individuals who share a common religion or denomination. Similarly, the legislature’s use of “unreasonable structural changes or expensive equipment alterations” in HRS § 378-3(7) describes a standard that contemplates a clear contrast to reasonable structural changes or non-expensive alterations of equipment; thus, it may be inferred that the legislature plainly intended that an alteration involving a minimal or nominal cost may not be asserted as a basis to not hire a person with a disability. Accordingly, the contrast between the exceptions listed in HRS § 378-3 and those not listed admits the firm conviction that the legislature “considered the issue of exceptions and, in the end, limited the statute to the ones set forth.” Johnson, 529 U.S. at 58. By the same analysis, the legislature’s permission to allow an employer to refuse to hire, refer or discharge an individual “for reasons related to the ability of the individual to perform the work in question,” HRS § 378-3(3) (emphasis added), implies a clear contrast to reasons that have no relation to the ability to perform the job. Thus, in accordance with the principle of expressio unius est exclusio alterius, the exceptions of HRS § 378-3 do not permit an adverse employment decision to be based on reasons unrelated to the ability of the individual to perform the work in question. - 40 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER The minority offers the criticism that our decision treats HRS § 378-3 “as an exclusive list,” and “the legislature was merely attempting to ensure that a particular group of key rights remained protected without listing every possible basis for an adverse employment decision.” Minority at 23, 27. Under the minority’s reasoning, “[n]othing in either [HRS §§ 378-2 or 378-3] tells the employer that it must limit its hiring decisions to reasons related to the ‘ability of the individual to perform the work in question.’” Minority at 23; see also minority at 25. This analysis is flawed for several reasons. First, the treatment of the eleven exceptions provided in HRS § 378-3 as an exclusive list is in full accordance with the principle of expressio unius est exclusio alterius, based upon the self-evident contrast between the eleven exceptions prescribed by HRS § 378-3 and unspecified possible exceptions. Johnson, 529 U.S. at 58. Second, if nothing tells the employer that it must limit its hiring decisions to reasons related to the ability of the individual to perform the work in question, then “all” nondiscriminatory reasons are permitted. If all nondiscriminatory reasons are permitted, then there would be no purpose for an exception involving a subset of nondiscriminatory reasons “relating to the ability of the individual to perform the work in question.” See HRS 378-3(3). Thus, the contention of the minority renders the exception provided in HRS § 378-3(3) - 41 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER as superfluous, contrary to our duty to give effect to all parts of a statute when a construction can be legitimately found that will give force to and preserve all words of the statute. See Fagaragan, 132 Hawaiʻi at 241, 320 P.3d at 906. Third, it is plain that by construing the exceptions in HRS § 378-3 to have unlimited expansion for “possible bas[es]” not listed by the legislature, the minority’s analysis renders not just HRS § 378- 3(3), but all non-discriminatory exceptions in HRS § 378-3 as superfluous. The practical effect of a boundless expansion of the bases for exceptions listed in HRS § 378-3 is to eliminate the protections afforded by HRS § 378-2. In order to give proper effect to the intention of the legislature, HRS § 378-2 must be construed in the context of the entire statute and consistent with its purpose to afford all persons equal opportunities in employment. See 1963 Senate Journal at 866. When read to limit lawful adverse employment decisions to those based on reasons related to the ability of the individual to perform the work in question, both HRS §§ 378- 2 and 378-3(3) are enforced and preserved, in accordance with the mandate that laws on the same subject “shall be construed with reference to each other.” See HRS § 1-16. Further, when read in the context of the exceptions provided by HRS § 378-3, the prohibitory language of HRS § 378-2 is consistent with the purpose identified in its legislative history “that the - 42 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER qualifications of the applicants be[] the sole test in selecting employees.” 1963 Senate Journal at 866; see Kauai Springs, Inc., 133 Hawai‘i at 163, 324 P.3d at 973. d. Requirement of a legitimate, nondiscriminatory reason in our prior decisions The requirement that legitimate, nondiscriminatory reasons for an adverse employment action must pertain to the individual’s inability to perform the work in question is supported by our prior analysis of HRS § 378-2. In Shoppe, the employee, Shoppe, alleged age discrimination when she was terminated by her employer, Gucci. Shoppe, 94 Hawaiʻi at 381, 14 P.3d at 1062. The reason articulated by Gucci for firing Shoppe was that she was not performing her job in a satisfactory manner. Shoppe, 94 Hawaiʻi at 374-76, 381, 14 P.3d at 1055-57, 1062. Shoppe’s supervisor, Perreira, testified that she had visited Shoppe’s Maui store and found important inventory documents lying on the floor, which needed to be filled out and faxed to the Gucci warehouse on Oʻahu in order for inventory to be shipped to Maui that day. Shoppe missed the deadline for faxing the papers and had done so numerous times, resulting in Perreira personally reprimanding Shoppe on several occasions for her tardiness. Id. The reasons Gucci articulated for firing Shoppe were therefore related to timely report filing, an important function - 43 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER of Shoppe’s position at Gucci. Under these circumstances, the Shoppe court found that Gucci had articulated legitimate nondiscriminatory reasons: [T]here does not appear to be a genuine issue of fact regarding Plaintiff’s failure to perform the duties of [a] store manager satisfactorily. Therefore Defendants have articulated legitimate, nondiscriminatory reasons for the adverse employment action against Plaintiff. Shoppe, 94 Hawaiʻi at 381, 14 P.3d at 1062 (emphases added). In other words, because the reasons Gucci articulated for the adverse employment action were related to Shoppe’s inability to adequately perform the job in question, Gucci articulated a legitimate, nondiscriminatory reason for firing Shoppe. Similarly, in Simmons v. Aqua Hotels & Resorts, Inc., 130 Hawaiʻi 325, 310 P.3d 1026 (App. 2013), an employee alleged, inter alia, age discrimination under HRS § 378-2(1)(A). Id. at 328, 310 P.3d at 1029. The reasons given by the employer for the adverse employment action was that the employee’s position had been restructured as part of cost-cutting measures following bankruptcy.19 Id. The employee was informed she could apply for the restructured position. Id. at 327-28, 309 P.3d at 1028-29. The employee declined to apply and the employer hired a different person for the new position. Id. The ICA found that the employee established a prima facie case of discrimination. 19 The new position was substantively different, including a new title, redefined job description, different benefits, reduced salary, and required relocation to Kauaʻi. Simmons, 130 Hawaiʻi at 327, 310 P.2d at 1028. - 44 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Id. at 330-31, 309 P.3d at 1031-32. The ICA next found that the employer met its burden to produce legitimate, nondiscriminatory reasons for the adverse employment action because the employer’s restructuring plan eliminated the employee’s original position, the job description for the new position had been redefined, and the job holder was required to be readily available on-site. Id. at 331, 309 P.3d at 1029, 1032. The reasons provided were related to a person’s ability to perform the work in question because they defined the requirements of the job. Therefore, the explanation given for the adverse employment action was legitimate because it was related to the ability of the employee to perform the work in question.20 In Dir., Dep’t of Labor & Indus. Relations v. Si-Nor, Inc., No. 27497, 2009 WL 405926 (App. Feb. 18, 2009) (mem.), an employee alleged discrimination and a prima facie case of discrimination was established.21 Id. at . The Hawaiʻi Labor Relations Board (HLRB) found testimony regarding the employee’s insubordination and involvement in altercations with others more 20 The ICA went on to vacate summary judgment in favor of the employer because it found genuine issues of material fact as to the employer’s credibility; that is, the plaintiff had raised a material issue as to pretext. “Based on this record, a rational fact-finder could infer that Defendants’ stated reasons for Plaintiff’s termination lacked credibility and were pretextual.” Id. at 331, 310 P.3d at 1032. 21 In Si-Nor, it was alleged that the employer discriminated against the employee for having reported work place safety issues, in violation of HRS § 396-8(e)(3). Si-Nor, 2009 WL 405926, at -. The ICA and the Hawaiʻi Labor Relations Board applied the three-part Shoppe-McDonnell analysis. Id. at -9. - 45 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER credible than the employee’s testimony. Id. at . The ICA determined that “based on the testimony that the HLRB found credible, [the employer] had legitimate reasons for firing [the employee].” Id. The reasons given by the employer in Si-Nor — the ability of the employee to work without insubordination and disruptive altercations — were related to the employee’s ability to perform the work in question and were therefore legitimate. In contrast, this court evaluated the reason articulated by the employer in Sam Teague, Ltd. v. Hawaiʻi Civil Rights Commission, 89 Hawaiʻi 269, 971 P.2d 1104 (1999), and determined that the articulated reason was not legitimate.22 Id. at 277-79, 971 P.2d at 1112-14. In Sam Teague, a female employee was terminated after taking a leave of absence for pregnancy, in violation of the employer’s policy of not allowing leave in the first year of employment. Id. at 272-74, 971 P.2d at 1107-09. This court held that the employer’s “no leave” policy violated Hawaiʻi law and administrative rules that required employers to provide a leave of absence for a “reasonable period of time” for “pregnancy, childbirth, or 22 In Sam Teague, the employer appealed the decision and award in favor of the employee by the Hawai#i Civil Rights Commission. The court analyzed the claims under the Shoppe-McDonnell rubric and the definitions and requirements of HRS §§ 378-1, -2, and -3. Sam Teague, 89 Hawaiʻi 269, 278-81, 971 P.2d 1104, 1113-16. - 46 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER related medical conditions.” Id. at 277-79, 971 P.2d at 111214. In addition to specifically holding that the policy was invalid, the court also evaluated the legitimacy of the employer’s articulated reason for the termination: that the employee was terminated because she intentionally failed to disclose her pregnancy before accepting a job where leave was not permitted in the first year. Id. at 278-79, 971 P.2d at 1113-14. The court in Sam Teague found that the “no leave” policy had not been communicated to the employee, nor was she informed that the employer’s requested “one-year commitment” meant “working twelve consecutive months with no extended leave.” Id. at 273, 278-79, 971 P.2d at 1108, 1113-14. The court found that the employee “could have reasonably believed that a one-year commitment simply meant that she would remain employed with the business for at least a term of one year” and that the employee intended to return to work after the birth of her child. Id. at 279, 971 P.2d at 1114. Based on those findings, the court concluded that the employer “failed to establish a legitimate nondiscriminatory explanation of the adverse employment action.” Id. This conclusion is consistent with the principle that the reason articulated by an employer is not legitimate when it is not related to the ability of the individual to perform the work in - 47 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER question. That is, because the employee in Sam Teague was able to perform the job in conformance with the criteria as conveyed by the employer, the reason given by the employer – that the employee could not work 12 months consecutively – was unrelated to the ability of the employee to meet the requirements of the position as conveyed to the employee. Thus, the review of the cases of our courts addressing the second step of the Shoppe-McDonnell framework reflect that that the nondiscriminatory reason articulated by the employer for the adverse employment action must be related to the ability of the individual to perform the work in question. 2. Reasons provided by CDM were not legitimate Paragraph (5)(a) of the Declaration states it was Willis’ belief that Adams was not qualified for the job because “[Adams] had no sales experience in the prior five years.”23 Under the Shoppe-McDonnell analysis, we are required to determine whether the fact that “[Adams] had no sales experience in the prior five years” was a legitimate, nondiscriminatory reason for CDM not to have hired Adams. Specifically, the analysis must consider whether sales experience in the prior 23 Willis stated his “belief” that Adams had no sales experience in the prior five years. Adams’ lack of sales experience in the past five years was established by Adams’ declaration attached to Adams’ Memorandum in Opposition to [CDM’s] Motion for Summary Judgment Filed February 21, 2012 and her resume, which was attached as exhibit 10. - 48 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER five years was related to Adams’ ability to perform as a telephone sales person at CDM. a. CDM disavowed consideration of “sales experience” In determining whether “sales experience in the prior five years” was related to the ability to perform the duties of the position, we note that the ultimate decision-maker in this case, Willis, specifically stated in his Declaration that he “did not consider any criteria stated in any advertising or posting in making [his] decision not to hire [Adams].” (Emphasis added). However, “sales experience preferred” was one of the listed “requirements” in the online employment solicitation published by CDM. Since “sales experience” was a “criteria stated in [] advertising,” which Willis expressly disavowed as a consideration in his decision not to hire Adams, Willis’ proffered reason not to hire Adams because she had no sales experience in the prior five years is plainly contradicted by his own statement that he did not consider sales experience. As “sales experience in the past five years” was refuted as a consideration in the hiring decision by CDM’s own admission, the criterion was not related to the job in question and thus was not a legitimate reason for the adverse employment action. Therefore, the Declaration’s articulated criterion of “sales experience in the prior five years” did not satisfy CDM’s - 49 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER burden to produce a legitimate, nondiscriminatory reason for its hiring decision in this case. b. “Sales experience” was not shown to be related to the ability to perform the job in question Second, even assuming the proffered justification that “sales experience in the prior five years” had not been disavowed by CDM, this justification was not related to an individual’s ability to perform as a telephone sales person because it is controverted by the advertised qualifications for the job. CDM’s posted solicitation for the position stated “Sales experience preferred,” but the solicitation did not indicate that sales experience in the last five years was required in order to be qualified for the position. The justification in the Declaration is also contradicted by the employee-training program highlighted in CDM’s posted solicitation. CDM’s solicitation stated, “We offer recognized training to build upon your formal education/experience and teach you the business of advertising and summit sales . . . .” “Here are a few key benefits of working at CDM Media: . . . First-class Sales Training Program from the best in the industry.” Similarly, a newspaper article regarding CDM’s employment solicitation stated “[a]ll sales hires will go through an eight-week comprehensive training course.” - 50 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER “Sales experience in the prior five years” was not shown to be related to Adams’ ability to perform the duties of a telephone sales person because CDM’s hiring advertisements indicated that sales experience was not required to be qualified for the position and also promised to provide extensive sales training. Thus, the criterion of “sales experience in the prior five years” was not a required qualification for the position, not a legitimate reason for the adverse employment action, and not related to Adams’ ability to perform the job in question. Therefore, CDM failed to meet its burden of production in the second step of the Shoppe-McDonnell analysis. c. “Legitimate” is integral to the Shoppe-McDonnell analysis The employer’s burden to articulate a legitimate, nondiscriminatory reason is not a burden to prove the truth of the legitimate, nondiscriminatory reason. That is, the requirement in the second step is that the “explanation” articulated be legitimate, Shoppe, 94 Hawaiʻi at 378, 14 P.3d at 1059, not that the employer prove that the reason was true or correct. Further, the evaluation of the legitimacy of the articulated reason is distinct from an evaluation of the credibility of a defendant. The evaluation of the legitimacy of a nondiscriminatory reason for an adverse employment action in the context of the Shoppe-McDonnell test is only whether the - 51 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER reason is related to the ability of the individual to perform the work in question; in contrast, an evaluation of credibility looks to whether the reason was believed or is worthy of credence. Thus, the evaluation of legitimacy does not transform the burden to produce a legitimate reason into a burden to prove that reason.24 However, the minority would go further, essentially reading “legitimate” out of the Shoppe-McDonnell test. See minority at 16-18. The minority would hold that “an employer’s proffered reason must be taken as true.” Id. at 18, 19 (emphasis added); see also id. at 31 (“[W]e must assume that the proffered evidence is true.”). Under the minority’s analysis, no analysis of the legitimacy of the reason is permissible; a court is required to accept any nondiscriminatory reason and one completely unrelated to the qualifications of the individual to perform the job. Respectfully, the authority cited for this proposition, Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993), and Shoppe, 94 Hawaiʻi at 378, does not mandate unexamined acceptance of any nondiscriminatory reason. Hicks states that in the second step of the McDonnell Douglas analysis, the employer must “introduce evidence which, 24 Thus, the contention of the minority that under this decision the “burden shifts to the employer-defendant to prove that the reasons for its decision,” minority at 33, is incorrect. - 52 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER taken as true, would permit the conclusion that there was a nondiscriminatory reason for the adverse action.” Hicks, 509 U.S. at 509 (emphasis in original). Some examination by the court is implied by the directive that the evidence presented must be sufficient to “permit the conclusion.” See also Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 255 (1981) (holding that the “explanation provided must be legally sufficient to justify a judgment for the defendant” and noting that the “sufficiency of the defendant’s evidence should be evaluated” (emphasis added)).25 Similarly, Shoppe states, “The 25 The remaining cases cited by the minority do not reduce the requirement that the legitimate, nondiscriminatory reason “must be legally sufficient to justify a judgment for the defendant.” Burdine, 450 U.S. at 255 (emphasis added); see Woodson v. Scott Paper Co., 109 F.3d 913, 920 n.2 (3d Cir. 1997) (The second step “is satisfied if the defendant articulates any legitimate reason for the discharge”); Krenik v. Cnty. of Le Sueur, 47 F.3d 953, 958 (8th Cir. 1995) (“In the second part . . . the burden shifts to the defendant who must . . . produc[e] evidence, ‘that the plaintiff was rejected . . . for a legitimate, nondiscriminatory reason.’”). Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985), minority at 28, did not substantively discuss legitimacy because it did not apply McDonnell Douglas. The “test is inapplicable where the plaintiff presents direct evidence of discrimination. . . . In this case, there is direct evidence.” Id. at 121; see also Wright v. Southland Corp., 187 F.3d 1287, 1305 (11th Cir. 1999) (same) (cited by minority at 30). A review of the cases cited by the minority in support of its argument that an employer’s action may be based on an objectively false but honestly held belief do not refute the conclusion that the reason articulated still must be legitimate because legitimacy was not at issue in those cases. Minority at 35-37; see Sybrandt v. Home Depot, U.S.A., Inc., 560 F.3d 553, 558 (6th Cir. 2009) (plaintiff stipulated that the employer “articulated a facially legitimate, nondiscriminatory reason for terminating her employment”); Flores v. Preferred Technical Grp., 182 F.3d 512, 515 (7th Cir. 1999) (articulated reason was insubordination and “[i]nsubordination is a legitimate, nondiscriminatory reason for firing an employee”). In other cases cited by the minority, the second prong of the McDonnell Douglas test was not substantively examined but the articulated reasons were manifestly legitimate. See Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1062-63 (9th Cir. 2002) (articulated reason was that employee violated company procedures and was dishonest during the ensuing investigation); Tesh v. U.S. (continued. . .) - 53 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER employer’s explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action.” Shoppe, 94 Hawaiʻi at 378, 14 P.3d at 1059 (emphasis added). Thus, Shoppe, too, indicates that the nondiscriminatory reason must be evaluated for legitimacy. The Shoppe decision undertook just such an analysis: Under these circumstances, there does not appear to be a genuine issue of fact regarding Plaintiff’s failure to perform the duties of store manager satisfactorily. Therefore, Defendants have articulated legitimate, nondiscriminatory reasons for the adverse employment action against Plaintiff. Shoppe, 94 Hawaiʻi at 381, 14 P.3d at 1062 (emphasis added); see also Sam Teague, 89 Hawaiʻi at 279, 971 P.2d at 1114 (“Therefore, [employer] has failed to establish a legitimate nondiscriminatory explanation of the adverse employment action.”). Thus, our examination of legitimacy is consistent with this court’s prior holdings. The minority’s analysis is inconsistent with these prior decisions. Our case law has not provided any decision in which a reason unrelated to the ability of the person to perform (. . .continued) Postal Serv., 349 F.3d 1270, 1272 (10th Cir. 2003) (articulated reason for termination was that “an investigation revealed that [employee] was dishonest in pursuing [a] workers’ compensation claim”); Majewski v. Automatic Data Processing, Inc., 274 F.3d 1106, 1116 (6th Cir. 2001) (articulated reason was the employee’s “increasingly poor job performance”). - 54 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER the job has been accepted as satisfying the second step of the Shoppe-McDonnell analysis. The minority’s reasoning would impose new constraints on our law by unreasonably restricting the power of a court to evaluate the legitimacy of a defendant’s articulated reason. Thus, the analysis of the minority is contrary to Hawaiʻi law that the hiring or discharge decision of an individual protected under HRS § 378-2 shall be related to the ability of the person to perform the work in question. The minority maintains that the McDonnell Douglas test represents a “universally accepted framework.” Minority at 31. However, McDonnell Douglas has been the subject of significant academic criticism.26 It has been objected to by prominent state jurists for its lack of clarity and effect of undermining its own purpose and provoked a line of criticism over its use in the summary judgment context. In Trott v. H.D. Goodall Hosp., 66 A.3d 7 (Me. 2013), Justice Silver wrote separately to reaffirm his position that the Maine Supreme Court “should not apply the three-step, burden-shifting [McDonnell Douglas] analysis . . . 26 See, e.g., Sandra F. Sperino, Beyond McDonnell Douglas, 34 Berkeley J. Emp. & Lab. L. 257 (2013); William R. Corbett, Fixing Employment Discrimination Law, 62 SMU L. Rev. 81 (2009); Martin J. Katz, Unifying Disparate Treatment (Really), 59 Hastings L.J. 643 (2008); Jamie Darin Prenkert, The Role of Second-Order Uniformity in Disparate Treatment Law: McDonnell Douglas’s Longevity and the Mixed-Motives Mess, 45 Am. Bus. L.J. 511, 512-15 (2008); Michael J. Zimmer, The New Discrimination Law: Price Waterhouse Is Dead, Whither McDonnell Douglas?, 53 Emory L.J. 1887, 1930 (2004); Michael Evan Gold, Towards a Unified Theory of the Law of Employment Discrimination, 22 Berkeley J. Emp. & Lab. L. 175 (2001). - 55 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER to discrimination claims at the summary judgment stage” because “it unnecessarily complicates the courts’ already difficult task.” Id. at 16 (Silver, J., concurring). “This rigid and artificial . . . analysis confuses rather than clarifies the ultimate issue in employment discrimination cases: whether there is evidence of discrimination.” Id. (internal quotation marks omitted); see Curlee v. Kootenai Cnty. Fire & Rescue, 224 P.3d 458, 463 (Idaho 2008) (concluding that while the burden-shifting analysis is applicable at trial, it should not be applied at summary judgment); Heng v. Rotech Med. Corp., 688 N.W.2d 389, 401 (N.D. 2004) (stating that McDonnell Douglas has “little or no application at the summary judgment stage”). Federal jurists, too, have raised similar concerns. Judge Magnuson of the Eighth Circuit expressed in Griffith v. City of Des Moines, 387 F.3d 733 (8th Cir. 2004), that “[a]bsent from [McDonnell Douglas] was any justification or authority for this scheme” and observed that McDonnell Douglas has “confused courts across the nation.” Id. at 740 (Magnuson, J., concurring specially). “[C]ourts have failed to thoroughly examine the language of the statute and congressional intent, and instead have fought to keep an arbitrary paradigm alive.” Id. at 747 (emphasis added). Judge Wood of the Seventh Circuit Court of Appeals called “attention to the snarls and knots” of the McDonnell Douglas test, referring to it as an “allemande worthy - 56 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER of the 16th century.”27 Coleman v. Donahoe, 667 F.3d 835, 863 (7th Cir. 2012) (Wood, J., concurring). “The original McDonnell Douglas decision was designed to clarify and to simplify the plaintiff’s task . . . unfortunately, both of those goals have gone by the wayside.” Id. Judge Hartz of the Tenth Circuit Court of Appeals stated, “The use of the McDonnell Douglas framework [] readily lends itself to consideration of formalities instead of the essence of the issue at hand.” Wells v. Colo. Dep’t of Transp., 325 F.3d 1205, 1225 (10th Cir. 2003) (Hartz, J., concurring). Judge Tymkovich, also of the Tenth Circuit Court of Appeals, stated adoption of the McDonnell Douglas framework “has left the entire area of law confused” and that the McDonnell Douglas “inquiry distracts the court from what it should be focusing its attention on: determining whether 28 the plaintiff produced sufficient evidence of discrimination.” 27 An “allemande” is a dance form associated with Baroque music originating in Europe in the sixteenth century, often involving lines of couples dancing with interlocked arms. Allemande, Wikipedia (Feb. 15, 2015, 2:28 PM), http://en.wikipedia.org/wiki/Allemande. 28 The Supreme Court has moved away from a burden-shifting framework in certain types of discrimination cases. In Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), the Court stated that Burdine is inapplicable to prove sex discrimination when the employer’s motive was a mixture of legitimate and illegitimate reasons. Id. at 246-47 (plurality opinion); see also Desert Palace, Inc. v. Costa, 539 U.S. 90, 99 (2003) (holding that a plaintiff in a mixed motive case is required to prove his or her case by a preponderance of the evidence, using direct or circumstantial evidence). Similarly, in Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), when the Court declined to apply McDonnell Douglas in a mixed-motive, age discrimination complaint brought under federal law, instead holding that a “plaintiff must prove by a preponderance of the evidence . . . that age was the ‘but-for’ cause of the challenged employer decision.” Id. at 177-78. - 57 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER The Honorable Timothy M. Tymkovich, The Problem with Pretext, 85 Denv. U. L. Rev. 503, 505, 522 (2008). The McDonnell Douglas framework, (or, in Hawaiʻi, the Shoppe-McDonnell test), is an analysis adopted by courts to apply an anti-discrimination law. The Shoppe-McDonnell test does not establish or modify HRS § 378-2, but instead it is a court-designed tool to effectuate the statute. Thus, what constitutes as a legitimate, nondiscriminatory reason under HRS § 378-2 ultimately must be discerned by an examination of the statute, its legislative history, and other principles of statutory construction. See Griffith, 387 F.3d at 747 (Magnuson, J., concurring specially). The relevance of the manner in which other courts may have interpreted the McDonnell Douglas framework is limited to the extent that the analyses of these courts were not designed to give effect to HRS § 378-2 and did not take into account the purpose and protections afforded by the Hawaiʻi legislature, which has specifically informed our analysis. The minority’s effective elimination of “legitimate” from the Shoppe-McDonnell analysis would place Hawaiʻi employees eligible for protection because of race, sex, sexual orientation, age, religion, color, ancestry, disability, marital status, or status as a victim of domestic or sexual violence at a significant disadvantage. Under the minority’s analysis, the - 58 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER employer could posit any nondiscriminatory reason in order to rebut the plaintiff’s prima facie case, contrary to Hawaiʻi law, the intent of the legislature, and the prior holdings of this court, all in defense of a test that, as one jurist phrased it, “readily lends itself to consideration of formalities instead of the essence of the issue at hand.”29 d. Hypotheticals posed by the minority are insubstantial The minority posits a series of strained hypotheticals that it argues would result from a court’s examination of “legitimate;” however, each lacks substance and is readily answerable. The minority first suggests that “whenever the number of equally qualified applicants exceeds the number of positions, those qualified applicants not hired could have a cause of action” because “the only legitimate hiring consideration is whether the person is qualified.” Minority at 37. However, it is clear that the purpose of HRS Chapter 378 is not to prohibit 29 The requirement that the job selection criteria be related to the job in question already operates in Title VII of the Civil Rights Act of 1965 prohibiting discrimination in hiring practices based on race, color, religion, sex, and national origin. That law “proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation.” Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971). “The touchstone is business necessity.” Id. (emphasis added). Thus, “[i]f an employment practice which operates to exclude [a racial category] cannot be shown to be related to job performance, the practice is prohibited.” Id. (emphasis added). There is no indication that Title VII of the Civil Rights Act of 1965 has resulted in a flood of spurious claims against employers based upon the hypothetical scenarios envisioned by the minority, and thus we are assured that the application of the law enacted by our legislature will not create such consequences. - 59 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER selection among applicants; it is to set forth the acceptable criteria for selection upon qualifications related to the position offered. HRS § 378-3(3) (“Nothing in this part shall be deemed to . . . [p]rohibit or prevent an employer from refusing to hire . . . any individual for reasons relating to the ability of the individual to perform the work in question . . . .”). Thus, an employer may select an employee from a pool of applicants to fill a limited number of positions by comparing and contrasting job-related qualifications without creating a cause of action. The minority also suggests that under our definition of legitimate, the employer could not take an applicant’s “personality” into consideration in its decisions. Minority at 38. To the contrary, an individual’s personality may be a legitimate reason for an adverse employment decision when the personality trait is related to the ability to perform the work in question. On the other hand, an employee’s burden to show discrimination would be insurmountable if an employer could make adverse hiring decisions based on personality traits that were unrelated to the ability to perform the job.30 30 A discriminatory basis for an adverse hiring decision could be readily justified by characterizing the reason as based on “personality.” Personality embraces a person’s moods, attitudes, opinions, motivations, and style of thinking, perceiving, speaking, and acting.” Personality, MerriamWebster, http://www.merriam-webster.com/dictionary/personality (last visited December 29, 2014). Thus, if personality was a legitimate reason for an (continued. . .) - 60 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Similarly, the minority suggests that an employer could face liability for incorrectly assigning a high score on an employment exam to the wrong person. Minority at 38-39. However, it would seem probable that such an exam would test qualities related to the ability to perform the work in question; thus the exam results would be related to the job, even if mistakenly applied to the wrong individual.31 3. Undisclosed criteria may weigh against finding of legitimate Although not necessary to its primary holding based on illegal pregnancy discrimination, this court’s decision in Sam Teague focused in part on the employer’s failure to inform the employee of the “no leave” policy or the meaning of the one-year commitment. 89 Hawaiʻi at 273, 279, 971 P.2d at 1108, 1114. The ruling in Sam Teague that failing to communicate the existence of a job criterion is a factor that weighs against an employer’s use of that criterion as a legitimate nondiscriminatory reason for an adverse employment action is consistent with HRS Chapter (. . .continued) adverse action even when unrelated to the position, an employer could decline to hire a person on the grounds of mannerisms or style that may be culturally based. 31 The minority appears to also assert that test results are hearsay and are thus precluded from providing a legitimate, nondiscriminatory reason. Minority at 35. To clarify, an in-court statement based on personal knowledge of test results is not hearsay. In contrast, if a statement in a declaration relies upon information provided by another person, as in this case, it is not based on personal knowledge and is inadmissible as hearsay, barring an exception to the hearsay rule. See infra, section III.C.5. - 61 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 378’s purpose of ensuring that employment decisions are made based on “factors [that] are applied equally to all applicants.” 1963 Senate Journal at 866. If an employer discloses the criteria that the employer actually uses to evaluate candidates, it is more likely that the employer is applying these criteria to all applicants. Conversely, “informal, secretive and subjective hiring or promotion decision processes tend to facilitate the consideration of impermissible criteria.” Roberts v. Gadsden Mem’l Hosp., 835 F.2d 793, 798 (11th Cir. 1988). Unpublicized or undisclosed criteria are not likely to be established occupational qualifications, nor can it be assumed that they are applied equally to all persons. See Rowe v. Gen. Motors Corp., 457 F.2d 348, 359 (5th Cir. 1972) (recognizing mechanisms for employment discrimination that involved promotion/transfer criteria “which can be covertly concealed”); Porter v. Milliken & Michaels, Inc., No. CIV. A. 99-0199, 2001 WL 1315435 (E.D. La. June 28, 2001) (noting that “[c]ourts have found that informal, secretive and subjective hiring or promotion decision processes tend to facilitate the consideration of impermissible criteria”). Therefore, undisclosed criteria measuring a person’s ability to perform the work in question are less likely to form the basis of legitimate and nondiscriminatory reasons for adverse employment actions. - 62 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Here, “sales experience in the prior five years” was not publicized or disclosed as a hiring criterion in any materials in the record other than in Willis’ Declaration. CDM presented no evidence that the requirement of “sales experience in the prior five years” was applied or disclosed to any other applicant.32 Thus, the criterion of “sales experience in the prior five years” may have been an informal and undisclosed hiring criterion applied only to Adams.33 Second, Willis’ Declaration expressly states that he did not use “any criteria stated in any advertising or posting in making my decision not to hire [Adams].” However, the Declaration does not indicate whether this was also true for other applicants. Therefore, it is not clear if the hiring criteria used to evaluate applicants were publicized or disclosed to any person applying for the position. CDM’s rejection of its own publicized hiring criteria may also indicate that an informal, undisclosed, and individualized hiring criterion was applied to Adams. Consequently, the undisclosed hiring criterion relied upon by CDM to conclude that Adams was unqualified for the position, 32 CDM also did not present evidence that sales experience in the past five years was a usual or customary hiring requirement for the particular position at issue, for any other position at CDM, or for the industry in general. 33 CDM’s disqualifying criteria - lack of sales experience in the past five years - correlates exactly with Adams’ actual recent lack of sales experience and may also indicate that an individualized criterion was applied to Adams. - 63 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER which may or may not have been applied to any other applicant, also weighs against a finding that the proffered reason was a legitimate, nondiscriminatory reason for the adverse employment action against Adams. 4. Additional reasons provided by CDM are inadmissible hearsay Willis also set forth three additional reasons for not hiring Adams, which can be considered collectively. The Willis Declaration states: 5. It was my belief that the Plaintiff was not qualified for the job because: . . . b. As far as I understood, most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication; c. As far as I understood, she had little or no sales experience that involved selling to C- Level corporate executives of Fortune 1,000 companies; and d. I was advised that she had said that she disliked tedious work. (Emphases added). Affidavits submitted by parties in support of a motion for summary judgment “shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” HRCP Rule 56(e) (2000) (emphasis added). “It is axiomatic that a motion for summary judgment should be decided on the basis of admissible evidence.” - 64 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Munoz v. Yuen, 66 Haw. 603, 605, 670 P.2d 825, 826 (1983) (per curium). Thus, “[t]he rule in Hawaiʻi is that an affidavit consisting of inadmissible hearsay cannot serve as a basis for awarding or denying summary judgment.” Hawaii Cmty. Fed. Credit Union v. Keka, 94 Hawaiʻi 213, 221, 11 P.3d 1, 9 (2000) (alterations omitted) (internal quotation marks omitted) (quoting GE Capital Hawaii, Inc. v. Miguel, 92 Hawaiʻi 236, 242, 990 P.2d 134, 140 (App. 1999)); see also HRE Rule 801 (2002); HRE Rule 802 (1980); Fuller v. Pac. Med. Collections, Inc., 78 Hawaiʻi 213, 224, 891 P.2d 300, 311 (App. 1995) (“[HRCP Rule 56(e)] requires that facts set forth in the affidavits be admissible in evidence. . . . These requirements are mandatory.”). “A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter.” HRE Rule 602 (1992); see also Miller v. Manuel, 9 Haw. App. 56, 66, 828 P.2d 286, 292 (1991) (“Affidavits in support of a summary judgment motion are scrutinized to determine whether the facts they aver are admissible at trial and are made on the personal knowledge of the affiant.”). Personal knowledge means “the witness perceived the event about which [the witness] testifies and [] has a present recollection of that perception.” HRE Rule 602 Commentary. - 65 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Therefore, an affidavit from an employer supporting a motion for summary judgment must be based on personal knowledge of the matter, i.e., admissible evidence. “The employer’s explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action.” Shoppe, 94 Hawaiʻi at 378, 14 P.3d at 1059 (emphasis added). Correlatively, inadmissible evidence or hearsay cannot support an affidavit in a motion for summary judgment that purports to show a legitimate, nondiscriminatory reason for an adverse employment action in a discrimination-based claim applying the three-part Shoppe-McDonnell analysis.34 Takaki v. Allied Mach. Corp., 87 Hawaiʻi 57, 69, 951 P.2d 507, 519 (App. 1998) (stating, in the context of discrimination claims based on race and work injury, “a motion for summary judgment may be decided only on the basis of admissible evidence”); see also Lales v. Wholesale Motors Co., 133 Hawaiʻi 332, 361-62, 328 P.3d 34 Allowing the decision-maker to rely on asserted third-party knowledge would shield the employer from discriminatory acts of anyone surrounding the ultimate decision-maker, even if those actions were designed and intended to result in an adverse employment action. See Staub v. Proctor Hosp., 131 S. Ct. 1186, 1189, 1193 (2011) (finding that, under a “cat’s paw” theory, an employer was not shielded from the discriminatory actions of an employee’s supervisors — even if they were not the ultimate personnel decision-makers — if the ultimate decision-maker made a decision based on negative reports by the discriminatory supervisors that were put in the employee’s personnel file specifically with the intent of getting the employee fired). - 66 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER 341, 370-71 (2014) (discussing how, in the context of the third step of the Shoppe-McDonnell analysis of discrimination claims based on retaliatory discharge under HRS § 378-2(2), evidence must be admissible in order to be relied upon in a HRCP Rule 56(e) motion for summary judgment). If a legitimate, nondiscriminatory reason could be shown by evidence not based on personal knowledge and the plaintiff was unable to demonstrate pretext in the third step of the Shoppe-McDonnell test, the consequence would be that a motion for summary judgment would be granted based on inadmissible evidence, contrary to the fundamental law of this jurisdiction. See HRCP Rule 56(e) (“Supporting and opposing affidavits [in a motion for summary judgment] . . . shall set forth such facts as would be admissible in evidence . . . .”); Fuller, 78 Hawaiʻi at 224, 891 P.2d at 311 (“[T]he circuit courts should ascertain whether a foundation has been established for the admissibility of evidence offered in support of the motion before an order granting summary judgment is filed.”); Munoz, 66 Haw. at 605, 670 P.2d at 826; Keka, 94 Hawaiʻi at 221, 11 P.3d at 9; Miller, 9 Haw. App. at 66, 828 P.2d at 292. Thus, the principle that evidence supporting a motion for summary judgment must be admissible applies in a motion for summary judgment upon a discrimination-based claim as it does in any other motion for summary judgment. - 67 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER In the Willis declaration, subparagraphs (b) and (c) begin with the following: “[a]s far as I understood,” which indicates that the basis for the information is from an unidentified third person or external source. Likewise, subparagraph (d) states: “I was advised,” again indicating that the source of the information is an unidentified third party. The reasons stated in subparagraphs (b), (c), and (d) of Willis’ Declaration do not demonstrate that they are based on Willis’ personal knowledge because the bases for the information are unidentified third persons or external sources. Therefore, the proffered reasons in subparagraphs (b), (c), and (d) are not admissible statements and, accordingly, do not articulate legitimate, nondiscriminatory reasons for the adverse employment action against Adams. Further, the facts of the case belie that Willis’ statements were based on “personal knowledge,” as asserted by the minority. Minority at 34-35. A mere recitation that the witness “understood” or was “advised” of a fact is insufficient, in itself, to establish that the witness perceived the facts for which testimony is offered, i.e. that the testimony is based on personal knowledge. See Addison M. Bowman, Hawaiʻi Rules of Evidence Manual § 602-1[3] (2014-15 ed.) (finding testimony of a person on Oʻahu regarding weather on the Big Island is objectionable on lack of personal knowledge grounds); State v. - 68 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Apollonio, 130 Hawaiʻi 353, 362, 311 P.3d 676, 685 (2013) (striking testimony of a witness where nothing in evidence would support a finding that the witness had personal knowledge of the fact at issue). Here, it is uncontroverted that Willis never met Adams; Adams’ only interview was with Bera, CDM’s Human Resources Director.35 According to CDM’s established hiring procedure, Bera “host[ed] the first round of interviews and review[ed] all candidates that came in for [an] interview and narrow[ed] down the list of potential candidates to meet with [Willis].” (Emphasis added). Thus, based on established hiring procedures and the fact that Adams only met with Bera, Willis’ two statements indicating “as far as I understood” and the statement “I was advised” are clearly not based on Willis’ personal knowledge. Further, it would appear that Bera had significant input in the decision not to hire Adams, if he did not make the decision outright. Additionally, Willis’ Declaration states in paragraph six that CDM did not hire any younger applicants with equal or lower qualifications for the position. Although not specifically stated as a reason for Adams not being qualified for the position, paragraph six is entirely conclusory, and no 35 The record does not contain a declaration from Bera. - 69 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER admissible evidence was adduced to establish this “fact.”36 “Ultimate or conclusory facts or conclusions of law are not to be utilized in a summary judgment affidavit.” Miller, 9 Haw. App. at 66, 828 P.2d at 292. Accordingly, Willis’ statement that no younger, equally or less qualified applicants were hired cannot form the basis of a legitimate reason not to hire Adams. The minority acknowledges that “[a]n employer satisfies this second step through admissible evidence of the employer’s reason for its decision.” Minority at 18 (emphasis added). The minority does not assert that Willis had any interaction with Adams or contest that Willis must have obtained the information contained in subparagraphs (b), (c), and (d) of his Declaration from some other source. According to the minority, these subparagraphs “were offered for the limited nonhearsay purpose of articulating a reason why he made the decision not to hire Adams.” Id. at 34-35. Thus, as the minority contends that subparagraphs (b), (c), and (d) of the Willis Declaration are admissible non-hearsay, the minority is asserting that the statements in Willis’ Declaration were not offered for the truth of the reasons contained within those 36 That is, there was no admissible evidence as to any actual sales experience of the hired applicants, or whether any such experience occurred within the past five years. - 70 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER statements but only to demonstrate that Willis had reasons for his decision. However, the minority also insists the reasons proffered by the employer “must be taken as true,” minority at 18-19, without evaluation of the substance of those reasons. See, e.g., id. at 32 (“[W]e must assume that the proffered evidence is true.”). If the reasons proffered by a defendantemployer must be taken as true, then the argument of the minority that the employer’s reasons are not offered for their truth, is logically precluded. Additionally, if the proffered reasons are not offered for their truth and only offered to demonstrate that the employer had a legitimate reason, then a plaintiff could never prove pretext in the third step of the Shoppe-McDonnell test. That is, if the proffered reason is not offered for its truth, then it could not be shown as a pretext for discrimination because it was not offered as a true reason for the defendantemployer’s action. It is manifest that the reasons of the employer are proffered for their truth, as it is unassailable that a court would not accept as a legitimate, nondiscriminatory reason the bare statement by an employer that an individual was not hired because of an unspecified reason. Rather, an employer’s statement could only provide a legitimate, nondiscriminatory - 71 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER reason to the court if the employer identifies and provides the basis for that reason. Here, the substantive reasons proffered were that Adams’ previous sales experience was in outside sales, Adams had little to no experience selling to C-level corporate executives, and Adams had said she disliked tedious work. These statements were offered upon a central disputed issue in the summary judgment proceeding for application in the second prong of the Shoppe-McDonnell test and were intended by the employer to be duly considered by the trial court as CDM’s articulation of its legitimate, nondiscriminatory reasons for not hiring Adams.37 Consequently, in compliance with our law of summary judgment, Willis was required to have personal knowledge of the matters asserted in his statements in order to satisfy the burden of production imposed on CDM. The minority further indicates that Willis’ Declaration was admissible “even if the . . . reasoning is based on third-party information.” Id. at 35 (emphasis added). However, there is no alternate standard by which evidence is admitted under the Shoppe-McDonnell test. If the statement of a 37 In applying the second step of the Shoppe-McDonnell analysis, the trial court was not required to ascertain whether Adams’ previous sales experience was actually in outside sales, whether Adams had little to no experience selling to C-level corporate executives, or whether Adams had said she disliked tedious work; instead, assuming those reasons were provided in admissible form, the trial court only needed to consider whether the defendant-employer satisfied its burden of production to show that the reasons provided were both non-discriminatory and related to Adams’ ability to perform the work in question. - 72 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER party is offered to prove the truth of the matter asserted, the report from a party not present in the court — i.e. “third-party information” — remains inadmissible. HRE Rules 801, 802. The undisputed facts are that Willis had no interaction with Adams. As Willis could only have gained the information in his declaration from Bera, his declaration is based on third-party information; it is thus hearsay and is inadmissible.38 HRE Rule 802. The minority does not contend that Willis’ statements would be admissible at trial. If Willis were to testify at a trial, he could only testify that he had acted based on 38 The cases cited by the minority do not reduce the requirement that the evidence submitted must be admissible. See minority at 35 (citing Rivera v. City & Cnty. of Denver, 365 F.3d 912 (10th Cir. 2004)); McDonaldCuba v. Santa Fe Protective Servs., Inc., 644 F.3d 1096 (10th Cir. 2011)). In both cases, the second step of the McDonnell Douglas test was not in dispute; thus in neither case did the court examine the admissibility of the evidence supporting the legitimate, nondiscriminatory reason. Rivera, 365 F.3d at 920 (“[W]e address only the issue of pretext.”); McDonald-Cuba, 644 F.3d at 1102 (analyzing only the pretext issue). Furthermore, in neither case was the personal knowledge of the defendant regarding the relevant information disputed. In Rivera, a city worker was disciplined for falsifying a work report. The minority seizes on the fact that the supervisor “was informed” of certain information; however, the information of which the supervisor “was informed” related to information supporting the falsity of the report. Rivera, 365 F.3d at 918. The supervisor based his actual decision on “all of the information before him,” consisting of six specific reasons, including the supervisor’s own calculations. Id. at 919. Similarly, in McDonald-Cuba, the plaintiff-employee formed a company that she registered on the Central Contracting Registry (CCR), a database for government contractors, where it was identified as performing security guard services. McDonald-Cuba, 644 F.3d at 1099. The employer company president “discovered the CCR printout” and determined there was a “huge conflict of interest” from plaintiff’s competing business and promptly terminated the employee. McDonald-Cuba, 644 F.3d at 1099, 1103. Nothing in McDonald-Cuba suggests the defendant lacked personal knowledge regarding the plaintiff’s competing business. - 73 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER information provided to him without describing the substance of that information. The information itself would be admissible only through another witness with personal knowledge. Thus, the contention of the minority that hearsay is admissible for the “limited non-hearsay purpose” of articulating a legitimate, nondiscriminatory reason for an adverse employment action is contrary to HRCP Rule 56(e), which governs summary judgment proceedings and unequivocally requires “facts as would be admissible in evidence.” HRCP Rule 56(e) (2000) (emphasis added). Affidavits or testimony pertaining to employment discrimination are not exceptions to the rule disallowing hearsay. HRE Rule 802. As stated, allowing summary judgment to be rendered on evidence that includes inadmissible hearsay is contrary to Hawaiʻi law. See Munoz, 66 Haw. at 605, 670 P.2d at 826; Takaki, 87 Hawaiʻi at 69, 951 P.2d at 519; Lales, 133 Hawaiʻi at 361-62, 328 P.3d at 370-71. The minority’s analysis, therefore, would create an exception with regard to employment discrimination claims, allowing summary judgment to be based on an affidavit that was premised upon inadmissible hearsay statements. This would create a lower standard for evaluating employment discrimination claims, contrary to the purpose of the law to “protect and safeguard the right and opportunity of all - 74 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER persons to seek . . . employment . . . without discrimination.” 1963 Senate Journal at 866. Weakening the evidentiary standard in this context would create an additional layer of confusion to this already complicated test and weaken the ability of individuals to avail themselves of the protection of our laws; a danger that has been previously recognized. See H.D. Goodall Hosp., 66 A.3d at 16 (Silver, J., concurring) (criticizing the use of the McDonnell Douglas test in summary judgment); City of Des Moines, 387 F.3d at 740 (Magnuson, J., concurring specially) (same); Coleman, 667 F.3d at 863 (Wood, J., concurring) (same); Colo. Dep’t of Transp., 325 F.3d at 1225 (Hartz, J., concurring) (same); see also Tymkovich, The Problem with Pretext, 85 Denv. U. L. Rev. at 505, 522 (2008). 5. CDM did not articulate a legitimate, nondiscriminatory reason In summary, the justification of “no sales experience in the prior five years” was not related to Adams’ ability to perform as a telephone sales person at CDM because it was negated as a hiring criterion by Willis, and it was controverted as a required qualification for the position by statements in the solicitation. “Sales experience in the prior five years” also may have been an undisclosed hiring criterion that may have been applied only to Adams. The remaining reasons proffered by - 75 - FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Willis’ Declaration in subparagraphs (b), (c), and (d) were inadmissible statements that may not be considered by a court. Therefore, we conclude that CDM did not satisfy its burden to produce a legitimate, nondiscriminatory reason for declining to hire Adams as an International Media Sales Executive.39