S&H REPORTS (10)

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (CLASS ACTION -

Complainant, TERESA M. FORD)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on August 11, 1988 at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on September 27, 1988.

Joseph P. Tamburino, Certified Student Attorney, University of Minnesota Law School Civil Practice Clinic, 190 Law Center, 229-19th Avenue South, Minneapolis, Minnesota 55455 and Professor Steven F. Befort, University of Minnesota Law School, 190 Law Center, 229-19th Avenue South, Minneapolis, Minnesota 55455, appeared on behalf of the Complainant. There was no appearance by or on behalf of any of the Respondents.

NOTICE

Pursuant to Minn. Stat. § 363.071, subd. 2, this Order is the final decision in this case and under Minn. Stat. § 363.072, the Commissioner of the Department of Human Rights or any other person aggrieved by this decision may seek judicial review pursuant to Minn. Stat. §§ 14.63 through 14.69.

STATEMENT OF ISSUES

1. Whether Teresa Ford qualifies for relief in this matter as a member of Class 1 (persons discharged from their employment because of religion, sex or marital status), Class 2 (persons employed by Sports and Health Club, Inc. who were discriminated against with respect to terms, conditions or upgrading of their employment because of religion, sex or marital status) or Class 3 (persons subjected to acts of reprisal affecting the terms and conditions of their employment, including discharge from employment, for opposing practices by the Respondents which violated the Minnesota Human Rights Act) in this action?

2. Whether relief, if any, to which Ms. Ford is entitled properly includes a sum for compensatory damages, including damages for mental anguish and suffering, and punitive damages?

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. Teresa Mae (Terri) Ford began employment as a part-time receptionist at the Northland Park Sports and Health Club in Brooklyn Park on December 10, 1979. Her prior employment included a variety of service and sales positions, including the teaching of exercise classes, in both Minnesota and Colorado.

2. Prior to being offered employment at Sports and Health, Ms. Ford was interviewed by Company Vice-President Forest Larson. She was asked a number of personal questions and was required to identify her religion (Roman Catholic), whether she was married (she was), whether she was a "Born-Again" Christian, and whether she had her husband's permission to take the job. She was then interviewed by Arthur Owens, President of Sports and Health. Owens probed into Ms. Ford's private life, asking her whether she "had to" get married, whether she got married in order to get away from her family and whether she was a "Born-Again" Christian.

3. After several months of work as a part-time receptionist at Northland Park, Ms. Ford began performing the duties of a "programmer", also called Associate Membership Director. The primary duties in that position are membership sales and "programming" (supervision of exercise programs, giving advice on health and nutrition) of members and guests.

4. During the late summer of 1981, Ms. Ford asked the Respondents' management for a position as a full-time Associate Membership Director. Before accepting her as a full-time employee, Owens required Ms. Ford to obtain her husband's permission to allow her to work full time. Michael Ford, Teresa Ford's husband, granted that permission in person to Mr. Owens and Club Manager Glen Beckett prior to September 8, 1981, and Ms. Ford became a full-time programmer on that date. She remained in that employment until October of 1984. The experience of having to receive her husband's permission to work and to upgrade her employment to full-time was embarrassing and humiliating for Ms. Ford.

5. Ms. Ford's service and sales record as a full-time programmer at Northland Park was excellent. During the first two years of her employment, she ranked near the top of the Salespersons' Standings issued by the employer each calendar quarter, including a #2 ranking for all persons employed at all of the Respondents' Clubs during the last half of 1982. (See Exhibit 7.) For the first quarter of 1983, her Instructor Evaluation sheet contains the notation "Excellent service in programming area". (See Exhibit 1.) For the last quarter of 1982, her programming of members was rated as "Excellent" and ". . . Likely the key to her success". (See Exhibit 2.) For the second quarter of 1982, Ford's Evaluation contains the notation "Excellent Quarter (sales). Could be number one if she continues the way she's been going". (See Exhibit 3.) The only criticisms in the "Service" portions of Ford's Evaluations involved not remaining on the workout floor at all times (see Exhibits 1-6).

6. All Associate Membership Directors at Sports and Health Clubs were required to attend Toastmasters meetings every Monday. At many of these meetings, speakers would criticize persons who were not "Born-Again" Christians, and certain religions, including Roman Catholicism, would be criticized specifically. Some of the speakers called Catholicism "pagan". Ms. Ford, a practicing Roman Catholic, was offended by the atmosphere at Toastmasters. She once walked out of Toastmasters when the speaker declared "If you don't become Born Again, you will go to hell".

7. In late 1982, Ms. Ford became pregnant with her only child. She and her husband had been trying to have a child since their 1976 marriage, and Ms. Ford enrolled in classes for learning the "Lamaze" method of natural childbirth. Her Lamaze class conflicted with Monday Toastmasters meetings, so Ms. Ford stopped going to Toastmasters. After her baby was born in July of 1983, Ford was reprimanded by Beckett for not attending Toastmasters and told that she had to go or lose her job. During the several months Ms. Ford did not go to Toastmasters, she was dropped from the employer's "up" system, which allows the next programmer "up" an opportunity to sell memberships to persons who walk in or call in to the Club.

8. All Associate Membership Directors at Northland Park were invited to attend weekly Bible studies. Attendance at these studies was "voluntary". Teresa Ford attended these Bible study sessions until January of 1982, after which time she stopped going because of the criticisms leveled against Catholicism by persons at the studies.

9. It was the Respondents' policy not to promote anyone who did not attend Bible studies. In the fall of 1982, Val Udermann was promoted to Club Manager at St. Louis Park. He had been informed earlier that he would be promoted if he began attending Bible studies. Carol Wahman and Robert Langley were "Born-Again" Christians who attended the same church as Glen Beckett, a church Ms. Ford attended once and to which she did not return because she considered its services to be a fundamentalist Bible study. Wahman was promoted to Assistant Manager at Northland Park in October 1982. Wahman and Langley were promoted to Manager and Assistant Manager, respectively, at the Respondents' new Tonka Club in May of 1983.

10. Upon learning of Ford's pregnancy in January of 1983, Glen Beckett told her that her chances of being promoted would be hurt because it was Sports and Health's position that her duties lie with her family, that she would be unable to give the necessary commitment to the Club required by a person in management and that Owens believed her place was in the home. As noted at Findings 6-8, Ms. Ford did not attend Toastmasters and had already stopped attending Bible studies during her period of pregnancy. She was approximately seven months pregnant when Wahman and Langley were promoted. She was never considered for those promotions.

11. Teresa Ford asked Glen Beckett to be considered for each of the promotions received by Carol Wahman and Bob Langley. She became ill when Wahman was promoted in 1982. During the quarter ending September 25, 1982, Ms. Ford ranked #2, Wahman tenth and Langley sixteenth out of 40 persons ranked in the overall Company Sales Standings. During the following quarter, Ford was second, Wahman seventh and Langley ninth, out of 45.

12. After being denied promotion in May of 1983, Ms. Ford stayed on as an Associate Membership Director for Sports and Health because she liked the work and had developed a number of friendships among her co-workers and Club members. She quit the employment in late October, 1984 in order to devote more time to her family and because she continued to feel that Company management wanted her to remain at home with her baby.

13. During 1982, Ms. Ford received $16,490 in salary and commission. The comparable figures for 1983 and January through October of 1984 are $18,881 and $18,548. Her base salary was $600 per month as a full-time Associate Membership Director, until July 1, 1983, when her base salary was raised to $800 per month. (See Exhibit 14.) Assistant Managers received an average base salary of $700 per month from 1982 through 1986 (see Exhibit 10). Carol Wahman's base salary rose to $800 per month after her promotion to Assistant Manager at Northland Park on October 19, 1982 (see Exhibit 11). After being promoted to Manager at the Tonka Club in May 1983, Ms. Wahman received a base salary of $1200 per month and received a ten percent commission on her sales. That base salary was raised to $1400 per month on October 4, 1984. (See Exhibits 10 and 11.) Managers' incomes at Sports and Health's "large" Clubs averaged $31,810 in 1983 and $31,055 in 1984. Managers' average incomes at the "small" Clubs (Tonka was one of the small Clubs) were $18,678 in 1983 and $20,012 in 1984.

14. In late 1984, Ms. Ford began employment as a salesperson for Wickes Furniture Stores. Her 1985 income exceeded her 1984 income by approximately $6,700. Her income at Wickes was based on commission for sales, and she had to work approximately six months to bring her commissions up to a level equal to her final salary plus commissions at Sports and Health.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly termed Conclusions

of Law are hereby adopted as such.

2. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

4. Under International Brotherhood of Teamsters v. United States, 97 S.Ct. 1843, 431 U.S. 324 (1977), after the Complainant makes a prima facie showing that an individual has been the victim of a discriminatory employment practice, the burden of proof shifts to the employer to establish by a preponderance of the evidence that adverse employment action taken against an employee was for lawful, non-discriminatory reasons.

5. Under State, by McClure v. Sports and Health Club, 370 N.W.2d 844 (Minn. 1985), appeal dismissed, 106 S.Ct. 3315, 92 L.Ed.2d 730 (1986), the Respondents engaged in prohibited employment practices by discharging persons from employment based on religion, sex and marital status, by discriminating
against persons in their employment with regard to the terms, conditions and upgrading of their employment because of religion, marital status and sex, and by subjecting persons to acts of reprisal affecting the terms and conditions of their employment, including discharge from employment, for opposing practices by the Respondents which violated the Minnesota Human Rights Act.

6. The Complainant has made a prima facie case that Teresa Ford was discriminated against with respect to the terms, conditions and upgrading of her employment because of religion, sex and marital status. The Respondents, who did not appear in this matter, are in default and have not established that the adverse employment actions taken against Ms. Ford were for lawful, non-discriminatory reasons. Teresa Ford, therefore, qualifies for relief in this matter as a member of Class 2.

7. The Complainant has not made a prima facie case that Teresa Ford was discharged from her employment because of religion, sex or marital status. She does not qualify for relief as a member of Class 1.

8. The Complainant has not made a prima facie case that Teresa Ford was subjected to acts of reprisal affecting the terms and conditions of her employment for opposing practices by the Respondents that violated the Minnesota Human Rights Act. She does not qualify for relief as a member of Class 3.

9. Minn. Stat. § 363.071, subd. 2 (1984), applicable in October of 1984, authorizes payment to an aggrieved party who has suffered discrimination, such as Teresa Ford, compensatory damages, including damages for mental anguish and suffering, and punitive damages.

10. Teresa Ford is entitled to compensatory damages in an amount equal to the difference between the wages and commissions she earned as an Associate Membership Director between October 1982 and May 1983 and the wages and commissions she would have earned as an Assistant Club Manager in the same period. This difference is $800, determined by the stipulated difference in monthly base salary of $100 per month. For the period between June 1983 and October 1984, Teresa Ford is entitled to compensatory damages in an amount equal to the difference between the wages and commissions she earned as an Associate Membership Director during that period and the wages and commissions she would have earned as a Club Manager in the same period. This difference is $7,500 ($900 for the period March 19 to June 30, 1983, $400 per month for the next 15 months and $600 for October of 1984), determined by the difference in base salary received by Ms. Ford and that received by Carol Wahman, Manager of the Tonka Club, during the same period.

11. Teresa Ford is entitled to damages for mental anguish and suffering in the amount of $6,000.

12. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure v. Sports and Health Club, et al., HR-82-005-RL, at p. 71.

13. Minn. Stat. § 363.071, subd. 2 requires the award of a civil penalty to the State where a violation of Chapter 363 is found, "taking into account the seriousness and extent of the violation, the public harm occasioned by the violation, whether the violation was intentional, and the financial resources
of the respondent". The State is entitled to a payment of a civil penalty in the amount of $1,000.

14. The Respondents are jointly and severally liable for all damages awarded herein.

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDERS

IT IS HEREBY ORDERED that the Respondents shall pay to Teresa Ford $14,300 ($8,300 in compensatory damages and $6,000 in damages for mental anguish and suffering) plus six percent interest from October 25, 1984, pursuant to Minn. Stat. § 334.01.

IT IS FURTHER ORDERED that the Respondents pay to the General Fund of the State of Minnesota a civil penalty of $1,000. The payment shall be filed with the Chief Administrative Law Judge of the Office of Administrative Hearings for submission to the General Fund.

Dated this day of October, 1988.

RICHARD C. LUIS

Administrative Law Judge

Reported: Taped.

MEMORANDUM

ing what sort of actions constitute prohibited discriminatory practices under the Human Rights Act and in dictating how such discrimination must be proven, has followed the approach of the federal courts in interpreting a similar statute, Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e. et seq., and has decided that court decisions under Title VII are applicable to similar actions under state law. See Danz v. Jones, 263 N.W.2d 395 (Minn. 1978) and Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983).

A three-part analysis was set out by the United States Supreme Court in the case of McDonnell-Douglas Corporation v. Green, 411 U.S. 792 (1973), describing the shifting burdens of production and proof in discrimination cases, and this analysis was refined by the Court in the case of Texas Department of Community Services v. Burdine, 450 U.S. 248 (1981). The requirements are: (1) the plaintiff must establish a prima facie case of discrimination; (2) the defendant must rebut the prima facie showing by articulating some legitimate, non-discriminatory reason for the employment action; and (3) the plaintiff must then show, by a preponderance of the evidence, that the reasons stated are a pretext for actual discrimination.

Under the Minnesota Human Rights Act, a member of a protected class who alleges that (s)he was treated differently from other persons because of membership in that protected class carries the initial burden of proof of establishing a prima facie case by showing (1) (s)he is a member of a protected class; (2) (s)he was qualified for the job; (3) that an adverse employment action was taken against him/her; and (4) the employer assigned non-members of the protected class(es) to do the same work. Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983). In this case, the above-noted analytical approach, as modified by Byrd v. Roadway Express, Inc., 687 F.2d 85 (1982), was used by the Administrative Law Judge and the Minnesota Supreme Court in analyzing the claims made by Charging Parties in the "underlying" action that determined general liability for discriminatory actions against the Respondents and authorized the creation of classes of individuals for potential monetary and other relief. See Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge in this matter, 4/26/84.

The United States Supreme Court case of International Brotherhood of Teamsters v. United States, 97 S. Ct. 843, 431 U.S. 324 (1977) provides for a different approach to the burden of proof in a class action lawsuit when the government has already proven a system-wide pattern and practice of discrimination on the part of the employer in the liability phase of the action. As the Court stated, at 97 S. Ct. 1868:

The proof of the pattern or practice supports an inference that any particular employment decision, during the period in which the discriminatory policy was in force, was made in pursuit of that policy. The Government need only show that an alleged individual discriminatee unsuccessfully applied for a job and therefore was a potential victim of the proved discrimination. . . . The burden then rests on the employer to demonstrate that the individual applicant was denied an employment opportunity for lawful reasons.

The Teamsters case involved discrimination by trucking companies and the Union against Black and Hispanic employees who were initially hired only as servicemen or local-city drivers, positions less desirable and lower-paying than over-the-road, long-distance driving jobs. Applying the reasoning of the above-quoted paragraph to this case, once the Complainant establishes that Teresa Ford, a married woman who did not share the religious beliefs and practices of Company management, employed as an Associate Membership Director and qualified for promotion to a position of employment as an Assistant Manager, unsuccessfully applied for that position, which position went to a "Born-Again" Christian, the burden then shifts to the Respondents to prove Ms. Ford was not promoted for legitimate, non-discriminatory reasons. The same analysis applies in the situation where she sought employment as an Assistant Manager or Club Manager at the Tonka Club, with the additional factor that she was pregnant when the promotion went to persons who shared management's religious beliefs and practices. In neither instance have the Respondents, who made no appearance in this matter, met their burden of proof.

It was concluded that Ms. Ford does not qualify as a member of Class 1 in this action because the Complainant has not demonstrated that she was discharged from employment. The evidence, when viewed in a manner most favorable to the Complainant, still shows that Ms. Ford voluntarily quit this
employment. As of October 25, 1984, she could have continued in employment as an Associate Membership Director for the Respondents. The unlawful action by the Employer established in this record occurred seventeen months earlier, when the decisions were made to promote persons less qualified than Ms. Ford because she did not share the religious beliefs and practices of Company management. Ms. Ford's testimony regarding why she quit when she did is persuasive in arriving at the conclusion that she was not discharged. She testified that she left, in part, because she found that continuing to work at Sports and Health would be too hard on her, since she was also trying to raise her infant child. She also testified that the Respondents felt her place, as a young mother, was in the home, but that evidence goes more to the employer's earlier decision not to promote her, absent any evidence of an overt act of discharge on the part of Sports and Health. Under Danz v. Jones, supra, and Continental Can Co., Inc. v. State, 297 N.W.2d 241, 251, a "constructive discharge" occurs when an employee resigns in order to escape intolerable working conditions caused by illegal discrimination. The facts of this case do not persuade the Judge that Ms. Ford was such an employee.

Regarding whether Ms. Ford qualifies as a member of Class 3, it was concluded that the Complainant has not established a separate prima facie case showing that the employer retaliated against Ms. Ford for opposing practices violating the Human Rights Act. She was not discharged or demoted for not going to Bible studies or for skipping Toastmasters meetings. It has been held that she was denied promotion for these reasons, but any such violations of the Human Rights Act in that regard properly place Ms. Ford in Class 2. Damages have already been awarded to her as a member of that Class. The fact that she was dropped from the employer's "up" system for not going to Toastmasters is related not to any practice of the employer violating the Human Rights Act, but is related to Ms. Ford's personal decision to give priority to her "Lamaze" classes. In addition, there is no evidence on the record that specifically isolates the amount of lost income, if any, resulting to Ms. Ford during the time she was not on the "up" system.

The determination of appropriate compensatory damages has been limited to the difference between Ms. Ford's monthly base salary and that which she would have earned as an Assistant Manager and Manager, during the appropriate periods, without awarding compensatory damages for a differential in commission. Ms. Ford's testimony that she would have earned more commissions had she been elevated into management is not supported by the balance of the record. Exhibit 10 is a stipulation between the Office of Attorney General and the Respondents, made before the Class Action hearings began. Parts A and F of that Exhibit show that the parties stipulated that the average commissions for Associate Membership Directors and Assistant Club Managers are the same. Ms. Ford testified that had she been promoted to management, she would have been able to earn more commissions because she would have been able to decide who had the right to solicit memberships from which potential members. This assertion is not corroborated by the documentary evidence. The increase in sales by Carol Wahman between the quarter ending September 25, 1982 and the quarter ending December 25, 1982 (she was promoted to Assistant Manager one month into that quarter) reflects no more than a normal seasonal increase in sales. While Wahman's gross sales increased by $9,000 during the following quarter, Bob Langley's also went up $8,000 and Ms. Ford's went up by more than $11,000. Part E of Exhibit 10 also shows that Ms. Wahman's commission income actually decreased after she began working as Manager at the Tonka Club.

The Complainant has established a clear prima facie case of discrimination against Ms. Ford regarding the upgrading of her employment. The Respondents' practice of not promoting anyone to management who did not share their religious beliefs or practices was established by their own admission in the underlying liability case. Ms. Ford did not share those practices and beliefs. Furthermore, the evidence that she was qualified for promotion and was never considered for it is unchallenged and credible. She was told by Club manager Glen Beckett after announcing her pregnancy that her chances for promotion were hurt because she was pregnant. This testimony establishes a prima facie case of sex discrimination. In order to obtain full-time work, Ms. Ford was forced to get the permission of her husband. This evidence establishes a prima facie case of discrimination in the upgrading of her employment based on both sex and marital status. It is clear that the Respondents are liable to Ms. Ford for appropriate compensatory damages.

It is also clear that Ms. Ford has suffered mental anguish, inflicted on her by Sports and Health, and under the Minnesota Human Rights Act she is entitled to additional compensation for that anguish and suffering. It is clear from the record that Ms. Ford was emotionally distressed and upset for at least two years about the way she was treated on the job. She was subjected to the humiliation of having to ask her husband for permission to work on two occasions. Her Roman Catholic faith was ridiculed regularly, not only by her co-workers but by the Club Manager as well. Not being promoted because she would not compromise her religious beliefs caused further strain, corroborated by testimony from her father, husband and parish priest. Counsel argues for an award of $8,500 for mental anguish and suffering damages. The Administrative Law Judge has limited the award to $6,000 because he is not persuaded that one element of those alleged damages relates to a violation of the Human Rights Act. That element is an incident that occurred late in Ms. Ford's pregnancy, when she was ordered to lead an exercise class. The physical workout caused her to hemorrhage, which put her in fear of losing her baby. This incident reflects a possible cause of action in tort for personal injury, rather than discrimination based on religion or sex.

No punitive damages have been awarded because the discriminatory actions taken by the Respondents all occurred prior to April 26, 1984. In the underlying case, the Administrative Law Judge stated that punitive damages against the Respondents were inappropriate because their discriminatory acts, although indifferent to the rights of others, had not been "willful". The same reasoning applied in the underlying case, therefore, applies here (see Conclusion 10.) Ms. Ford was denied promotion in 1982 and 1983. There is no evidence that she was victimized by subsequent illegal discriminatory acts. The evidence to the effect that she was "constantly" harassed for her religious beliefs is too vague as to any events after September of 1983 to constitute substantial evidence for the Administrative Law Judge to conclude that any discriminatory action was taken against Ms. Ford after the April 26, 1984 ruling that the Respondents' religious-based employment practices were illegal and unconstitutional.

R.C.L.

Service List

Stephen W. Cooper, Commissioner Joseph P. Tamburino

Department of Human Rights Certified Student Attorney

Fifth Floor Bremer Tower U of M Law School Civil Practice Clinic

Seventh Place & Minnesota Street 190 Law Center, 229-19th Avenue South

St. Paul, MN 55101 Minneapolis, MN 55455

Professor Steven F. Befort Arthur W. Owens

U of M Law School 6535 Peaceful Lane

190 Law Center, 229-19th Avenue S. Chanhassen, MN 553l7

Minneapolis, MN 55455

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

October 21, l988

Stephen W. Cooper, Commissioner

Department of Human Rights

Fifth Floor Bremer Tower

Seventh Place & Minnesota Street

St. Paul, MN 55101

Re: State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Class Action Case of Teresa Ford); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Commissioner Cooper:

Enclosed and served upon you by mail, please find an Order Correcting Error in Original Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge (Class Action - Teresa Ford) in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

RCL/lr Telephone: 612/341-7610

Enclosures

cc: Joseph P. Tamburino

Professor Steven F. Befort

Richard L. Varco, Jr.

Sports and Health Club, Inc.

Arthur Owens

Marc Crevier

Forest Larson

Administrative Law Judge Janice K. Frankman

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W. ORDER CORRECTING

Cooper, Commissioner, Minnesota ERROR IN ORIGINAL

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (CLASS ACTION -

Complainant, TERESA M. FORD)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

On October 20, 1988, the undersigned Administrative Law Judge issued Findings of Fact, Conclusions of Law and Order in this matter.

There is an error in Conclusion 10 on page 5 of that Order. The last sentence of Conclusion 10 presently reads:

This difference is $7,500 ($900 for the period March 19 to June 30, 1983, $400 per month for the next 15 months and $600 for October of 1984), determined by the difference in base salary received by Ms. Ford and that received by Carol Wahman, Manager of the Tonka Club, during the same period.

(Emphasis supplied.)

The date "March 19" should read "May 19". This sentence is hereby AMENDED to read as follows:

This difference is $7,500 ($900 for the period May 19 to June 30, 1983, $400 per month for the next 15 months and $600 for October of 1984), determined by the difference in base salary received by Ms. Ford and that received by Carol Wahman, Manager of the Tonka Club, during the same period.

A copy of this Order is being sent to all persons served with copies of the original Order.

Dated this day of October, 1988.

RICHARD C. LUIS

Administrative Law Judge

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (CLASS ACTION -

Complainant, THOMAS BECKER)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on August 18, 1988 at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on September 20, 1988.

Linda F. Close, Deputy Attorney General, and Julie A. Leppink, Special Assistant Attorney General, 515 Transportation Building, St. Paul, Minnesota 55155, appeared on behalf of the Complainant. There was no appearance by or on behalf of any of the Respondents.

NOTICE

STATEMENT OF ISSUES

1. Whether Thomas Becker qualifies for membership in Class 1 (persons discharged from their employment because of religion) in this action?

2. If Thomas Becker is a proper member of Class 1, whether he is entitled to monetary relief in the form of compensatory and/or punitive damages, and, if so, whether unemployment benefits received by him should be set off against that entitlement?

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. Thomas K. (Tom) Becker was employed by the Respondents as an Associate Membership Director (programmer) at the Northland Park Sports and Health Club in Brooklyn Park from April 1, 1980 to June 18, 1981.

2. On June 18, 1981, prior to the start of his work shift, Mr. Becker was summoned to the office of Northland Park's Club Manager, Glen Beckett. Beckett informed Mr. Becker that he was "letting (him) go". Becker was shocked by this news, and pressed Beckett for a reason for the termination. After some discussion, Beckett told Becker he was being discharged for a "bad attitude".

3. Thomas Becker was born and raised in Sauk Centre, Minnesota. Upon graduation from high school in 1974, Mr. Becker spent two years at Willmar Community College and three years at St. Cloud State University. He received his degree from St. Cloud in 1979. Mr. Becker's major was therapeutic recreation, with a minor in physical education. He also played four years of college football.

4. In late March of 1980, Mr. Becker, who had heard about Sports and Health Club from a friend with whom he worked out, applied for employment with the Respondents. He wanted work at a health club because he enjoyed the physical activity and he thought the work fit his educational background.

The job application process consisted of two interviews, one with Sports and Health Vice-President Marc Crevier and one with Company President Arthur Owens. During the initial interview, Crevier asked Becker about his religious background and asked whether he could be a "reborn again" Christian. Becker did not reply to the last question, and left the interview thinking he would be rejected for employment at Sports and Health because he had not made a declaration about his religious beliefs.

5. A few days after his interview with Marc Crevier, Mr. Becker was called to interview with Arthur Owens. Owens asked no questions regarding Becker's qualifications to work as a programmer (the general duties are to sell Club memberships, to supervise exercise programs for members and to counsel members on matters regarding health and diet). Owens delivered a 30 to 45-minute "sermon" to Becker, comparing man's sinful nature and the purity of Jesus Christ.

6. Three days after his interview with Mr. Owens, Tom Becker was called by Marc Crevier and offered employment as a programmer at Sports and Health's Northland Park Club, which offer was accepted.

7. Mr. Becker's supervisor when he began employment at Sports and Health was Edythe Wandell, the Northland Park Club Manager. During the summer of 1980, Wandell retired and was replaced by Glen Beckett. Beckett's managerial style was much more intrusive than Wandell's, and the pressure to sell new memberships was increased at the Club.

8. All programmers at Sports and Health were required to attend Toastmasters meetings every Monday morning. The religious content of many of the speeches offended Mr. Becker, but he continued to attend because attendance was mandatory.

9. Mr. Becker was born and raised in the Lutheran faith. He attended church regularly while growing up in Sauk Centre and when he was in college. After moving to the Twin Cities, he was not a regular attendee at church services, but would always attend his "home" church in Sauk Centre whenever he returned. Mr. Becker has never considered himself a "Born Again" Christian.

10. Bible studies were offered for Northland Park Club employees every Wednesday between changes in shifts. Attendance was voluntary, and Mr. Becker never attended Bible studies. He was periodically asked to attend Bible studies by Mr. Beckett. Beckett also asked Becker to attend his church, but Becker never accepted that offer.

11. Tom Becker was successful at selling memberships for Sports and Health Club. Throughout the course of his employment, Becker was ranked in the top ten percent of all company employees in terms of sales volume. When he received employment evaluations, administered by Vice President Forest Larson, his job performance was not criticized.

12. Mr. Becker's compensation as a programmer was in the form of a monthly salary plus a ten percent commission on all new membership sales. His monthly base salary was increased from $500 to $577 on December 19, 1980, and to $600 on April 9, 1981. The frequency of the raises in his basic pay reflects steadily-improving sales performance.

13. During calendar year 1981, Becker averaged $614 per month in sales commissions. Between June 18, 1981 and February 28, 1982 Mr. Becker was unemployed, except for a short-term job as a construction laborer. He earned wages of $2,250 on the construction job and drew unemployment benefits of $2,730 before March 1, 1982. On that date, Mr. Becker began employment as a salesperson. His work search during the 8.5 months prior to March 1, 1982 was constant and diligent. Since that time, he has earned compensation greater than he had been earning at Sports and Health in 1981.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly termed Conclusions

of Law are hereby adopted as such.

2. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

6. The Complainant has made a prima facie case that Thomas Becker was a competent, qualified employee who did not share the religious beliefs and practices of the Respondents' management and was discharged from employment because of religion. He had a good sales and service record and was given no reason for being discharged beyond having a "bad attitude."

7. The Respondents, who did not appear and are in default in this proceeding, have not demonstrated that Mr. Becker's discharge was for lawful, non-discriminatory reasons.

8. Thomas Becker is entitled to compensatory damages of $5,339 as a member of Class 1 in this action. His actual damages of $10,319 ($1,214 per month in salary and commissions multiplied by 8.5, the number of months between discharge and securing better employment), are properly reduced by wages earned ($2,250) and unemployment benefits received ($2,730).

9. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure v. Sports and Health Club, et al., HR-82-005-RL, at p. 71.

10. In accordance with the Minnesota Supreme Court decision herein, the Respondents are jointly and severally liable for all damages awarded herein. State, by McClure v. Sports and Health Club, 370 N.W.2d 844, 853-54 (Minn. 1985).

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents shall pay to Thomas Becker $5,339 in compensatory damages, plus six percent interest from June 18, 1981, pursuant to Minn. Stat. § 334.01.

Dated this day of October, 1988.

RICHARD C. LUIS

Administrative Law Judge

Reported: Taped.

MEMORANDUM

ing what sort of actions constitute prohibited discriminatory practices under
the Human Rights Act and in dictating how such discrimination must be proven, has followed the approach of the federal courts in interpreting a similar statute, Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e. et seq., and has decided that court decisions under Title VII are applicable to similar actions under state law. See Danz v. Jones, 263 N.W.2d 395 (Minn. 1978) and Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983).

The Teamsters case involved discrimination by trucking companies and the Union against Black and Hispanic employees who were initially hired only as servicemen or local-city drivers, positions less desirable and lower-paying
than over-the-road, long-distance driving jobs. Applying the reasoning of the above-quoted paragraph to this case, once the Complainant establishes that an Associate Membership Director who was not a "born again" Christian and never attended weekly Bible studies, but was never criticized for his job performance and had consistently ranked in the top ten percent of all company employees in new membership sales, was discharged for employment due to a "bad attitude" at a time when the employer was still seeking qualified job applicants for employment as Associate Membership Directors, the burden of proof shifts to the Respondents to establish that he was discharged for lawful, non-discriminatory reasons. That burden has not been met in this case, where the Respondents are in default. In this instance, it is proper to infer that being discharged for what the employer called a "bad attitude" is a pretext for being discharged for not following one of management's religious practices (not attending Bible studies).

The Administrative Law Judge has decided to set off the $2,730 in unemployment benefits received by Mr. Becker from his damage award, despite strong argument to the contrary by counsel for the Complainant. In the case of State, by Wilson v. Continental Can Company, 297 N.W.2d 241, 251 (Minn. 1980), the Minnesota Supreme Court affirmed the hearing examiner's award to a charging party in a Minnesota Human Rights Act case. The hearing examiner had reduced the charging party's compensatory damages of over $14,000 to $5,000, including a specific reduction of $2,730 for unemployment benefits received. The Supreme Court specifically affirmed the reduced damages award in its entirety. The set off of unemployment benefits was mentioned as an element of damages reduced but was not specifically discussed.

In Robertson v. Special School District No. 1, 347 N.W.2d 265 (Minn. 1984), the Supreme Court reversed the lower court's decision determining that no offset of unemployment compensation benefits against a back pay award was appropriate. The Court cited two earlier decisions, Mrkonjich v. Erie Mining Company, 334 N.W.2d 378 (Minn. 1984) and McClellan v. Northwest Airlines, Inc., 304 N.W.2d 35 (Minn. 1981), where it had "made it clear that we favor a policy of preventing an employee's double recovery due to the receipt of both back pay and unemployment benefits." Each of the older cases involved awards for wrongful discharge, as does this case.

Counsel's argument that the Federal case of Craig v. Y & Y Snacks, Inc., 727 F.2d 77 (3d Cir. 1983) should be followed is persuasive but not controlling. A major factor in the Craig decision was the Third Circuit panel's conclusion that other circuits (the Fourth, Ninth and Eleventh) had already held that unemployment compensation should not be deducted from back pay awards. In Minnesota, however, our Supreme Court has expressed a policy (in Robertson and its predecessors) and indirectly held (in Continental Can) in favor of the opposite view. The Administrative Law Judge has decided that it is appropriate to follow the view implied by this State's highest court.

R.C.L.

Service List

Stephen W. Cooper, Commissioner Linda F. Close

Department of Human Rights Deputy Attorney General

Fifth Floor Bremer Tower 515 Transportation Building

Seventh Place & Minnesota Street St. Paul, MN 55155

St. Paul, MN 55101

Julie A. Leppink Arthur W. Owens

Special Assistant Attorney General 6535 Peaceful Lane

515 Transportation Building Chanhassen, MN 553l7

St. Paul, MN 55155

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

October 19, l988

Stephen W. Cooper, Commissioner

Department of Human Rights

Fifth Floor Bremer Tower

Seventh Place & Minnesota Street

St. Paul, MN 55101

Re: State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Class Action Case of Thomas Becker); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Commissioner Cooper:

Enclosed and served upon you by mail, please find the Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge (Class Action - Thomas Becker) in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

RCL/lr Telephone: 612/341-7610

Enclosures

cc: Linda F. Close

Julie Leppink

Richard L. Varco, Jr.

Sports and Health Club, Inc.

Arthur Owens

Marc Crevier

Forest Larson

Administrative Law Judge Janice K. Frankman

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (CLASS ACTION -

Complainant, TAMMY S. ANDERSON

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on March 10, 1988 at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on August 8, 1988.

Leslie J. Anderson, Dorsey & Whitney, 2200 First Bank Place East, Minneapolis, Minnesota 55402 appeared on behalf of the Complainant. Arthur W. Owens, 6535 Peaceful Lane, Chanhassen, Minnesota 55317 appeared on behalf of Sports and Health Club, Inc., as its President, on behalf of himself as an individual Respondent, and on behalf of Respondent Forest Larson. Marc Crevier, 10965 Fieldcrest, Eden Prairie, Minnesota 55344 appeared on his own behalf.

NOTICE

STATEMENT OF ISSUES

1. Whether Tammy Anderson qualifies for membership in Class 4 (persons who sought employment after September 24, 1979, and who were not hired because of religion, marital status, and/or sex) or Class 5 (persons who sought employment between September 24, 1979 and July 15, 1986, and who were required to furnish information that pertains to religion, marital status, and/or sex) in this action.

2. Whether relief, if any, to which Ms. Anderson is entitled properly includes a sum for compensatory damages, mental anguish or suffering or punitive damages.

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. On April 26, 1984, Tammy Schulman¹ Anderson applied for a fulltime entry level clerical position at the offices of Sports and Health Club, Inc. in St. Louis Park. She made the application in response to the advertisement of an opening in the Minneapolis Star & Tribune.

2. After filling out an application form, Ms. Anderson was interviewed for the position available by Lee McNamara, manager of the Respondents' executive offices. Ms. McNamara described the job duties, which included office filing, clerical and possibly data entry work. The main requirement of the job was a proficiency level in typing of 40 words per minute.

3. At the time of the interview, Ms. Anderson had recently (late March 1984) completed a typing course and was able to type at over 50 words per minute. Ms. McNamara told Anderson that her ability to type met the required level of ability for the job. At no time during the interview did McNamara inform Ms. Anderson that she was lacking in any job requirement. McNamara also stated that the position available was one from which an employee could, with further training on the job, possibly gain a position as a supervisor sometime in the next six months to one year.

4. During the course of the job interview, Ms. McNamara also asked Tammy Anderson a number of personal questions. She was asked whether she lived with her parents, whether her parents were divorced, whether she was married, and whether she lived with a boyfriend.

5. Ms. Anderson was wearing a necklace with a Star of David (a gold, six-pointed star on a gold field) at the interview. The Star of David is a symbol of Judaism. McNamara noticed the necklace Ms. Anderson was wearing and remarked: "What a pretty necklace. It's a Star of David. Are you Jewish?" Ms. Anderson replied: "Yes. Is that a problem?" Ms. McNamara said: "No, we have a Jewish woman working here in the same department." Ms. McNamara was referring to an employee named Vanessa Moldo.

6. As the interview progressed further, Ms. McNamara informed Anderson that Sports and Health was a Christian organization and that only "growing Christians" could be promoted into management positions. She asked Anderson if she had a problem with that. Ms. Anderson then terminated the interview and told McNamara to throw away her application.

7. Tammy Anderson terminated the job interview with Sports and Health because she wanted a job from which she could advance, and since only "growing Christians" could get into management at Sports and Health, she saw no future for her there beyond the initial job for which she was interviewing. She also terminated the interview because she had become uncomfortable. After being

¹At the time of the incident that is the subject matter of this case, Ms. Anderson was single. Her maiden name is Tammy Beth Schulman.

asked the personal questions noted at Findings 4 through 6, she concluded that the atmosphere of the Employer's office was discriminatory against Jewish people and that she could not work in such an environment. Had Anderson actually been offered a job at Sports and Health's office, and had there not been the discriminatory atmosphere she perceived, she would have taken the job.

8. Tammy Anderson was raised in Eden Prairie, Minnesota, and graduated from Eden Prairie High School in 1978. She worked in a variety of clerical and laboring jobs after high school, and completed a one-year vocational-

technical course in commercial art. Prior to the interview on April 26, 1984, Ms. Anderson had never experienced direct anti-Semitic prejudice. Her faith was shaken by her interview experience.

9. On Saturday, April 28, 1984, Ms. McNamara read an account in the Minneapolis Star & Tribune of the decision reached by the Administrative Law Judge on April 26, 1984, which decision held the Respondents liable for discrimination in employment based on religion, sex and marital status. At the time she read the newspaper account, Ms. Anderson was still upset over the events of April 26.

10. Sometime in January, 1985, Ms. Anderson received a letter sent by Arthur Owens to current and former Sports and Health Club members (she was a former member). The letter explained the Respondents' decision to close their LaSalle (Minneapolis) Club. Upon receiving the letter, Anderson was reminded of her interview experience the previous year. She immediately wrote to Owens, expressing her continuing distress over the events of April 26, 1984. See Complainant's Ex. 1.

11. Ms. Anderson secured fulltime employment that paid her more than what she would have earned as an office employee at Sports and Health in July of 1984. She seeks compensatory damages of $525.00 for 14 days of unemployment between April 27 and June 15, 1984. The starting salary for the position for which Anderson interviewed was $825.00 per month, or $37.50 per day.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

2. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

3. Under International Brotherhood of Teamsters v. United States, 97 S.Ct. 1843, 431 U.S. 324 (1977), after the Complainant makes a prima facie showing that an individual has been the victim of a discriminatory employment practice, the burden of proof shifts to the employer to establish by a preponderance of the evidence that adverse employment action taken against a perspective employee was for lawful, non-discriminatory reasons.

4. Any of the preceding Findings of Fact more properly termed Conclusions

of Law are hereby adopted as such.

status.

6. The Complainant has not made a prima facie case showing that Tammy Anderson was rejected from employment because of religion or marital status. Therefore, she is not a potential member of Class 4 in this action.

7. The Respondents required Tammy Anderson to furnish information pertaining to her religion and marital status when she sought employment with them. Under State, by McClure v. Sports and Health Club, supra, she has been aggrieved by the Respondents' discriminatory practice. Therefore, she qualifies for relief as a member of Class 5.

8. Minn. Stat. § 363.071, subd. 2 (1982), the law applicable in May of 1984, authorizes payment to an aggrieved party who has suffered discrimination such as Tammy Anderson of compensatory damages, including damages for mental anguish and suffering, and punitive damages.

9. Tammy Anderson is entitled to compensatory damages of $1,000 for mental anguish and suffering due to being required to furnish information pertaining to religion and marital status.

10. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure, v. Sports and Health Club, et al., HR-82-005-RL, at p. 71.

11. In accordance with the Minnesota Supreme Court decision herein, the Respondents are jointly and severally liable for all damages awarded herein. State, by McClure v. Sports and Health Club, 370 N.W.2d 844, 853-54 (Minn. 1985).

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents shall pay to Tammy Anderson $1,000 in compensatory damages for mental anguish and suffering, with six percent interest from April 26, 1984, in accordance with Minn. Stat. § 334.01.

IT IS FURTHER ORDERED that the Respondents shall pay a civil penalty to the State of Minnesota in the amount of $500. Payment of the civil penalty shall be made to the Chief Administrative Law Judge of the Office of Administrative Hearings for remittance to the General Fund of the State of Minnesota.

Dated this day of September, 1988.

RICHARD C. LUIS

Administrative Law Judge

Reported: Taped.

MEMORANDUM

Minn. Stat. § 363.03, subd. 1 prohibits discrimination in employment on account of religion, marital status and sex. It also prohibits pre-employment inquiry pertaining to such subjects. The Minnesota Supreme Court, in determining what sort of actions constitute prohibited discriminatory practices under the Human Rights Act and in dictating how such discrimination must be proven, has followed the approach of the federal courts in interpreting a similar statute, Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e. et seq., and has decided that court decisions under Title VII are applicable to similar actions under state law. See Danz v. Jones, 263 N.W.2d 395 (Minn. 1978) and Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983).

The proof of the pattern or practice supports an inference that any particular employment decision, during the period in which the discriminatory policy was in force, was made in pursuit of that policy. The Government need only show
that an alleged individual discriminatee unsuccessfully applied for a job and therefore was a potential victim of the proved discrimination. . . . The burden then rests on the employer to demonstrate that the individual applicant was denied an employment opportunity for lawful reasons.

Ms. Anderson terminated the job interview at a point in time when it is impossible to ascertain whether she would ultimately have been rejected for the position sought. She terminated the interview because she found it offensive, and the Administrative Law Judge has made an award of damages (explained below) for that set of circumstances. However, the record fails to establish that the Employer would have rejected Anderson for employment, had the application-interview process continued. Neither does it establish that Anderson had already been rejected when the interview was terminated.

The decision that Ms. Anderson fails to qualify as an unsuccessful job applicant is supported by the fact that the Respondents were employing a Jewish woman in their office on April 26, 1984. The Respondents' policy of not hiring persons who are "antagonistic to the Gospel" does not preclude the hiring of Jews for entry level employment.

Ms. Anderson was told that the position for which she interviewed could be a stepping stone to advancement within the office. She was then informed that only "growing Christians" were eligible for promotion into management. From these facts, the Complainant argues that Ms. Anderson was, in effect, rejected for employment because she is Jewish. The Administrative Law Judge is unable to accept this argument.

The fact that the person taking the job could, at some future time, be considered for management does not convert the job for which Ms. Anderson was applying and that was available, an entry level office position, into one for which the Employer was making religious-based hiring decisions beyond the threshold inquiry of whether the potential employee was "antagonistic to the Gospel." And, based on the record in this matter, the interview-application process never got to the point where the Employer could tell if Anderson was of such a belief or temperament that she could not work in an atmostphere where co-workers proselytize and "witness" for Jesus Christ. While it is apparent from the record that Anderson would find such a work environment intolerable, the record does not establish that the Employer knew this about Ms. Anderson, let alone that the action was taken to reject her for employment because of that reason.

Ms. Anderson's statement to McNamara to the effect that she would not be able to work in such an atmosphere of anti-Semitic discrimination was stated
at the time Anderson terminated the interview. Thus, she took herself of consideration for employment before the Employer could decide whether or not to reject her for being "antagonistic" to the religious beliefs embraced by the Respondents. McNamara never told Ms. Anderson that Sports and Health did not hire persons who were "antagonistic to the Gospel". She told Anderson that only "growing Christians" were eligible for promotion to management, but Anderson was not applying for a manager's position. While it is likely that the Respondents would have refused to hire Anderson because she objected to the Respondents' religious beliefs or practices, the interview-application process never got to the point where the potential employee was told she would not be hired because of any such objections. Rather, Ms. Anderson cut short the interview and walked out. In such a situation, the Administrative Law Judge is unable to award damages for denial of employment.

Damages have been awarded for mental anguish and suffering experienced by Ms. Anderson as a proper Member of Class 5. The Administrative Law Judge has decided that Ms. Anderson was telling the truth when she testified that Lee McNamara asked her whether she was married, whether she lived with her boyfriend (a situation found objectionable by the Respondents on the basis of marital status) and whether she was Jewish. These questions offended Ms. Anderson, and the Judge has awarded damages in accordance with the gravity of the offenses. The letter Ms. Anderson sent to Mr. Owens in January of 1985 shows she was still upset months after the interview.

In arriving at a decision that Tammy Anderson was asked illegal questions pertaining to religion and marital status, the Administrative Law Judge has chosen to give greater evidentiary weight to Ms. Anderson's testimony than that of Lee McNamara. Ms. McNamara interviewed literally hundreds of job applicants in the quarter century of her employment for Sports and Health and is not able to remember all of them. In fact, she does not remember Tammy Anderson's interview, although she recognized Ms. Anderson at the hearing. Her testimony that she could not have said certain things or would never ask a person's religion (because asking such questions were among Mr. Owens's duties, and reserved for a second pre-employment interview with him) is outweighed by the specific, credible testimony of Ms. Anderson in recalling an incident that had a great impact on her.

On the issue of Ms. McNamara's credibility, the Administrative Law Judge is also persuaded by the argument of counsel for the Complainant that points out the inconsistency of McNamara's testimony that she would never ask about an applicant's religion with her testimony that no one she has recommended to Mr. Owens for a second interview had been rejected by Mr. Owens. It is highly unlikely that all of the applicants could be acceptable to Owens if McNamara were not identifying and "screening out" those who were "antagonistic to the Gospel." In order to find such persons, the interviewer has to ask about the prospective employee's religious beliefs. The credibility of McNamara's denial that she asked Tammy Anderson about her religion is eroded further by her admission that she had asked another applicant (Gail Fischer) about her church affiliation.

In his decisions on the Class Action matter to date, the Administrative Law Judge has declined to award punitive damages for incidents occurring prior to his issuance of Findings of Fact, Conclusions of Law and Orders in the "underlying" liability case. That decision was issued on April 26, 1984, the same day Ms. Anderson had her encounter at the Respondents' office. As of
that day, the Respondents had not yet been apprised of the Orders to cease and desist their illegal practices, so no punitive damages have been awarded. See Conclusion 10.

Interest is awarded pursuant to the recent Minnesota Court of Appeals decision in Henry v. Metropolitan Waste Control Commission, 401 N.W.2d 401, 407 (Minn. App. 1987), which holds that for administrative proceedings, interest awarded is to be calculated in accordance with Minn. Stat. § 334.01. That statute mandates an interest rate of six percent.

R.C.L.

Service List

Stephen W. Cooper, Commissioner Richard L. Varco, Jr.

Department of Human Rights Assistant Attorney General

Fifth Floor Bremer Tower 1100 Bremer Tower

Seventh Place & Minnesota Street 7th Place & Minnesota Street

St. Paul, MN 55101 St. Paul, MN 55101

Leslie Anderson Arthur W. Owens

Dorsey & Whitney 6535 Peaceful Lane

2200 First Bank Place East Chanhassen, MN 553l7

Minneapolis, MN 55402

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

September 2, l988

Stephen W. Cooper, Commissioner Richard L. Varco, Jr.

Department of Human Rights Assistant Attorney General

Fifth Floor Bremer Tower 1100 Bremer Tower

Seventh Place & Minnesota Street 7th Place and Minnesota Street

St. Paul, MN 55101 St. Paul, MN 55101

Leslie Anderson Arthur W. Owens

Dorsey & Whitney 6535 Peaceful Lane

2200 First Bank Place East Chanhassen, MN 553l7

Minneapolis, MN 55402

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Re:State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Class Action Case of Tammy S. Anderson); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Parties and Counsel:

Enclosed and served upon you by mail, please find the Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge (Class Action - Tammy S. Anderson) in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

RCL/lr Telephone: 612/341-7610

Enclosures

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (CLASS

Complainant, ACTION - JUDY KENT)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above-entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on March 3, 1988, at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on April 21, 1988.

James A. Barnum, Leonard, Street & Deinard, Suite 1500, 100 South Fifth Street, Minneapolis, Minnesota 55402, appeared on behalf of the Complainant. Arthur W. Owens, 6535 Peaceful Lane, Chanhassen, Minnesota 55317, appeared on behalf of Respondent Sports and Health Club, Inc., on behalf of himself, and on behalf of Respondent Forest Larson. Marc Crevier, 10965 Fieldcrest, Eden Prairie, Minnesota 55344, appeared on his own behalf.

NOTICE

STATEMENT OF ISSUES

1. Whether Judy Kent qualifies for relief in this matter as a Member of Class 4 (persons who sought employment between September 24, 1979 and July 15, 1986 and who were not hired on the basis of religion, marital status, and/or sex), or Class 5 (persons who sought employment between September 24, 1979 and July 15, 1986 and who were required to furnish information that pertains to religion, marital status and/or sex).

2. Whether relief, if any, to which Ms. Kent is entitled properly includes a sum for compensatory damages (lost wages and lost commissions) and punitive damages.

Based upon all the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. On or about June 11, 1984, Judy Kent telephoned the Normandale Sports and Health Club in response to a newspaper advertisement by the Respondents for applicants interested in employment as Associate Membership Directors. Ms. Kent remembers the ad as stating that the job involved "nutritional counseling and sales". The person who answered the telephone told Ms. Kent that in order to apply, she had to come to the Normandale Club's location and fill out an application.

2. After the telephone contact described in Finding 1, Ms. Kent drove to the Normandale Sports and Health Club to fill out an application for employment with the Respondents. She filled out the application and also supplied the Club with her resume. After that, Ms. Kent was led to a private office by dark-haired man, approximately 5' 10" to 6' 0" tall, who was wearing an athletic warm-up suit with a blue top. She does not remember the man's name or whether he told her he was a Club Manager or other Company executive. She is able to describe the physical layout of the portions of the Normandale Sports and Health Club that she saw.

3. Ms. Kent's interview lasted approximately 10-15 minutes. Her qualifications for the position were discussed, and the job duties of nutritional counseling, weighing and measuring Club members and helping people with fitness programs were explained to her. At the conclusion of the interview, Ms. Kent felt confident and positive--as if she had a genuine chance of getting hired. The interviewer told her she would be called for another employment interview, although he still had other applicants to see, and that he wanted to review all the applications before he called anyone back.

4. After waiting approximately two days, Ms. Kent called back to the Normandale Club on or about June 13, 1984. She spoke to the same man who had interviewed her on June 11. Ms. Kent opened the discussion by asking the interviewer about her coming back for a second interview. The tone of the conversation was positive, which led her to believe she would be invited back and that she was going to be hired eventually. The interviewer then asked Ms. Kent if she lived with her parents. She said no, that they lived near Rochester. He then asked why she was living in Prior Lake and applying for a job in Bloomington. Ms. Kent replied that, at that time, she was living with her fiance and other roommates, that she and her fiance were planning on getting married and had bought a house from his mother on Spring Lake near the City of Prior Lake.

5. After Ms. Kent informed the interviewer that she was living with her fiance, as described in the preceding Finding, the interviewer told her, "I'm sorry, but we do not hire people who live under those conditions," because Sports and Health is a Christian organization, and that if her "living situation" changed in the near future, she should call him back and he would probably have a position for her.

6. Ms. Kent had no further contact with the Respondents. Her application for employment with Sports and Health Club was one of several that
she made at or about the time she graduated from Inver Hills Community College with an Associate Degree in Human Services and Counseling, with a specialization in Child Development. Approximately three weeks after June 13, 1984, she began employment (as a teacher at a Christian day care center) that provided wages and benefits equal to or better than what she would have earned as an Associate Membership Director for the Respondents.

7. Ms. Kent's work experience prior to June of 1984 included retail sales positions, a position as a nanny for two young children, and a teaching assistantship at a Christian nursery school.

8. During the first three weeks of employment, a person hired as an Associate Membership Director is generally involved in training, has not begun to sell memberships and earns little or no sales commissions.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly termed Conclusions of Law are hereby adopted as such.

2. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

4. Under International Brotherhood of Teamsters v. United States, 97 S. Ct. 1843, 431 U.S. 324 (1977), after the Complainant makes a prima facie showing that an individual has been the victim of a discriminatory employment practice, the burden of proof shifts to the employer to establish by a preponderance of the evidence that adverse employment action taken against an employee or job applicant was for lawful, non-discriminatory reasons.

6. The Complainant has made a prima facie case that Judy Kent was not hired as an Associate Membership Director at Sports and Health Club because of her marital status. She is a potential member of Class 4 in this proceeding.

7. The Complainant has not made a prima facie case that Judy Kent was required to furnish information pertaining to marital status during the pre-employment hiring process at Sports and Health Club. She does not qualify as a potential member of Class 5 in this proceeding based on marital status.

8. The Complainant has not made a prima facie case that Judy Kent was not hired because of religion or that she was required to furnish information
pertaining to religion during the pre-employment hiring process at Sports and Health Club. She does not qualify as a potential member of Class 4 or Class 5 based on religion.

9. The Respondents have failed to demonstrate a lawful reason for not hiring Judy Kent because of her marital status. As a result, Ms. Kent is entitled to damages in this matter as a member of Class 4.

10. Minn. Stat. § 363.071, subd. 2 (1983 Supp.), the law applicable in June of 1984, authorizes payment to an aggrieved party who has suffered discrimination, such as Judy Kent, of compensatory damages and punitive damages.

11. Judy Kent is entitled to compensatory damages in an amount equal to the average wages and commissions earned during a three-week period by Associate Membership Directors at Sports and Health Club in 1984. This amount, $553.83 in wages and $272.43 in commissions, totals $826.26. Ms. Kent is entitled to this amount of compensatory damages because she was not hired at Sports and Health Club due to her marital status.

12. Ms. Kent is entitled to an award of punitive damages against the Respondents in the amount of $1,500.00.

13. Minn. Stat. § 363.071, subd. 2 (1983 Supp.) requires the award of a civil penalty to the State were a violation of Chapter 363 is found, "taking into account the seriousness and extent of the violation, the public harm occasioned by the violation, whether the violation was intentional, and the financial resources of the respondent". The State is entitled to payment of a civil penalty in the amount of $400.00.

14. The Respondents are jointly and severally liable for all damages awarded herein.

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDERS

IT IS HEREBY ORDERED that the Respondents pay to Judy Kent $2,326.26 ($826.26 in compensatory damages, $1,500 in punitive damages) plus interest on the compensatory damages pursuant to Minn. Stat. § 549.09.

IT IS FURTHER ORDERED that the Respondents pay to the general fund of the State of Minnesota a civil penalty of $400.00. The payment shall be filed with the Chief Administrative Law Judge of the Office of Administrative Hearings for submission to the general fund.

Dated this day of May, 1988.

RICHARD C. LUIS

Administrative Law Judge

Reported: Taped.

Transcript Prepared.

MEMORANDUM

The United States Supreme Court case of International Brotherhood of Teamsters v. United States, 97 S. Ct. 1843, 431 U.S. 324 (1977) provides for a different approach to the burden of proof in a class action lawsuit when the government has already proven a system-wide pattern and practice of discrimination on the part of the employer in the liability phase of the action. As the Court stated, at 97 S. Ct. 1868:

The proof of the pattern or practice supports an inference that any particular employment decision, during the period in which the discriminatory policy was in force, was made in pursuit of that policy. The Government need only show that an alleged individual discriminatee unsuccessfully
applied for a job and therefore was a potential victim of the proved discrimination. . . . The burden then rests on the employer to demonstrate that the individual applicant was denied an employment opportunity for lawful reasons.

The threshold inquiry in this case is whether Ms. Kent actually applied for work with Sports and Health. After a review of the record, the Administrative Law Judge is convinced that she did. Although she cannot remember the name of the person who interviewed her, she did describe his physical appearance and the layout of the building where she made her application. She also testified that the person she talked to two days after applying for work was the same man. As for when she applied, she testified that the events for which she seeks relief came at or about the time of her graduation from junior college, a significant event in her life, which occurred on or about June 10, 1984. Her unrebutted testimony in this regard is entirely credible.

In his Order issued in the underlying liability hearing in this matter, see Findings of Fact, Conclusions of Law and Order, HR-82-005-RL, 4/26/84, pp. 12-15, 18-19, 29-31, the Administrative Law Judge held that single persons not hired by Sports and Health because of their living arrangement with members of the opposite sex were victims of illegal discrimination because of their marital status under the Minnesota Human Rights Act. In affirming the Administrative Law Judge's finding of illegal discrimination based on marital status regarding persons situated similarly to Ms. Kent, see State, by McClure v. Sports and Health Club, Inc., 370 N.W.2d 844, 853 (Minn. 1985), the Minnesota Supreme Court stated:

In a pluralistic and democratic society, government has a responsibility to ensure that all its citizens have equal opportunity for employment, promotion, and job retention without having to overcome the artificial and largely irrelevant barriers occurring from gender, status, or beliefs to the main decision of competence to perform the work.

This same issue was decided by the Minnesota Court of Appeals. See State, by Johnson v. Porter Farms, Inc., 382 N.W.2d 543, 547-48 (Minn. App. 1986). It is noted that the Court of Appeals has held that the Minnesota Supreme Court affirmed the Administrative Law Judge's finding that the Sports and Health Club violated Minn. Stat. § 363.03, subd. 1(2) by both refusing to "hire and [firing] individuals living with but not married to a person of the opposite sex . . . ." The Court of Appeals held that, "In doing so, it extended the
protection of the Human Rights Act to unmarried couples." The appellant in Porter Farms, Inc., supra, also contended that while the Supreme Court in Sports and Health Club extended the protection of the Human Rights Act to those employees and prospective employees living with a person of the opposite sex to whom they were not married, the Court of Appeals must reconsider the Supreme Court's decision under Article 1, Section 16 of the Minnesota Constitution. The Court of Appeals declined to do so and held that the Appellants in Sports and Health Club asserted their rights under Article 1, Section 16 and the Supreme Court held that facially, and as applied, the Human Rights Act does not violate the free exercise of religion as guaranteed by Article 1, Section 16. See 382 N.W.2d 543, at 547-48.

It is also noted that, as with Charging Parties Crosby and Perkins in the underlying case, there is no showing on the record of this case that Ms. Kent was a fornicator at the time that she was denied employment.

The Respondents argue that Ms. Kent cannot be a proper member of Class 4 because it has not been shown that she was not hired as a result of her living arrangement. This argument is contrary to the facts of the case. As soon as the Company's interviewer learned of the living arrangement, one that offended the Respondents because the Applicant was single, the application process was terminated. The record reveals no other reason for refusal to hire. It is not necessary for potential Class Member to be actually offered a job before rejection due to living arrangements when the facts of the case reveal that (s)he is qualified for an open position and that (s)he was rejected for a discriminatory reason. In this case, the interviewer went so far as to tell Ms. Kent to call back if the living arrangement changed--an admission that she would have been continued along in the hiring process had she not been single.

The Complainant argues that Ms. Kent was discriminated against on the additional ground of religion. The Administrative Law Judge cannot agree. There is no evidence that Ms. Kent was asked for, nor gave the Respondents any information on her religious beliefs and practices. The fact that her rejection due to her marital status was grounded in the Respondents' sincerely-held religious beliefs, as put into practice in operation of their Clubs, is not enough to convert this claim into one of discrimination based on religion. See Findings of Fact, Conclusions of Law and Orders of the Administrative Law Judge, supra, 4/26/84, at pp. 49-51.

The Administrative Law Judge has also decided that Ms. Kent does not qualify as a Member of Class 4--persons required to furnish information pertaining to religion and/or marital status. It has been so held because, under the unique facts of this case, Ms. Kent volunteered the information when she announced that she lived with her fiance. The question leading to her voluntary admission was neutral as to her religion or marital status--it asked only why she sought work in Bloomington while living in Prior Lake. Her revelation that she lived with her fiance led to an act of illegal discrimination (terminating the employment application process due to marital status), but the questioning established on the record made no requirement, express or implied, that Ms. Kent furnish the interviewer with the fact that she was single.

The Respondents argue that Ms. Kent should receive no compensation based on lost commissions, should liability be found, because a person employed at Sports and Health generally receives no such income during the first three
weeks on the job. Under the case of Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 627 (Minn. 1988), "The civil damage remedy afforded a discrimination victim under the Minnesota Human Rights Act contemplates compensating the victim to restore her, as near as possible, to the same position she would have attained had there been no discrimination". (Emphasis supplied.) The damages awarded compensate Ms. Kent at a level she would have attained and earned had she been an average performer as an Associate Membership Director at Sports and Health. The illegal discriminatory acts of the Respondents denied her more than three weeks of work--they illegally denied her an opportunity to become an "average" employee who earns an "average" commission. The Anderson v. Hunter, Keith, Marshall & Co. decision mandates a restoration, as near as possible, to the position the victim of damages would have attained. There is no showing on the record that Judy Kent would not have become at least an "average" Associate Membership Director at Sports and Health, but for her being single when she applied for work.

Punitive damages have been awarded in this case because: (1) the Respondents' actions toward Ms. Kent, in not hiring her because of her living with her fiance, show by clear and convincing evidence "a willful indifference to the rights . . . of others"; and (2) the discriminatory action, even if taken by an agent of the Respondents, was authorized by the Respondents, within the scope of the agent's employment, and was done with the Respondents' approval. See Minn. Stat. § 549.20, subds. 1 and 2.

In the underlying case, the Administrative Law Judge stated that punitive damages against the Respondents were inappropriate because their discriminatory acts, although indifferent to the rights of others, had not been "willful". That reasoning cannot protect the Respondents for actions taken after the Administrative Law Judge issued Orders enjoining them from discriminatory actions (such as denying employment to presumed fornicators, the presumptions being based on their marital status). In fact, the Minnesota Court of Appeals and Hennepin County District Judge Franklin Knoll have held that the Respondents' refusal to obey the Orders of April 26, 1984 was contemptuous. See State, by Johnson v. Sports and Health Club, 392 N.W.2d 329 (Minn. App. 1986). The Administrative Law Judge's Orders of April 26, 1984 are the first pronoucement that the Respondents' business practices were illegal by a neutral fact-finder and a person empowered to take actions against the Respondents for illegal discrimination. The above-noted decision of the Minnesota Court of Appeals makes it clear that the Administrative Law Judge's Orders were to have been obeyed from the day they were issued. It is clear from the record of this case that the Respondents disregarded those Orders and made no effort to instruct their interviewing personnel to obey them. After the Orders of April 26, 1984, the Respondents were apprised that their actions, although sincere, were not protected under the Constitution. They were ordered clearly to cease them. The non-cessation of the illegal, unprotected actions was a clear demonstration of "willful indifference to the rights of others" within the meaning of Minn. Stat. § 549.20.

Subdivision 3 of Section 549.20 mandates measurement of punitive damage awards by the factors which justly bear on the purpose of punitive damages, including seriousness of the hazard to the public arising from the defendant's misconduct, the duration of the misconduct, the degree of the defendant's awareness of the hazard and of its excessiveness, the attitude of the defendant upon the discovery of the misconduct, the number and level of employees involved in causing the misconduct, the financial condition of the
defendant, and the total effect of other punishment likely to be imposed on the defendant as a result of the misconduct, including compensatory and punitive damage awards to the plaintiff and other similarly situated persons, and the severity of any criminal penalty to which the defendant may be subject. After considering all of the listed factors, the Administrative Law Judge has decided to assess punitive damages in this case of $1,500. He is mindful of the fact that Counsel for the Complainant asked for only $1,000 in punitive damages. However, Counsel was under the mistaken assumption that punitive damages were limited at the time this cause of action arose to $1,000. That assumption is erroneous. Minn. Laws 1981, Ch. 364, section 2, effective August 1, 1981, changed the maximum punitive damages award for violations of the Minnesota Human Rights Act from $1,000 to $6,000.

The Complainant's Motion for Directed Verdict against Respondents Sports and Health Club, Inc. and Forest Larson, based upon the fact that they were not legally represented in this case by Mr. Owens, a non-attorney, has been rendered moot by the above Order holding the Respondents liable to Ms. Kent.

R.C.L.

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (CLASS

Complainant, ACTION - JOHN SENIOR)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on February 11, March 1, and March 7, 1988 at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on August 8, 1988.

Susan M. Robiner, Leonard, Street and Deinard, Suite 1500, 100 South Fifth Street, Minneapolis, Minnesota 55402 appeared on behalf of the Complainant. Arthur W. Owens, 6535 Peaceful Lane, Chanhassen, Minnesota 55317 appeared on behalf of Sports and Health Club, Inc., as its President, and on behalf of himself as an individual Respondent. Marc Crevier, 10965 Fieldcrest, Eden Prairie, Minnesota 55344 appeared on his own behalf. Forest Larson, 5005 Richmond Drive, Edina, Minnesota 55436 appeared on his own behalf on March 1 and March 7.

NOTICE

STATEMENT OF ISSUES

1. Whether John Senior qualifies for membership in Class 1 (persons discharged from their employment because of religion) or Class 2 (persons employed by Sports and Health Club, Inc. who were discriminated against with respect to the terms, conditions or upgrading of their employment because of religion) in this action?

2. If John Senior is a proper member of Classes 1 and/or 2 in this action, whether he is entitled to relief in the form of monetary and/or punitive damages, and, if so, to what extent?

3. Whether the Complainant made a prima facie case for holding the Respondents liable for damages in this matter on February 11, 1988, and, if he did, whether a default judgment should be entered against Forest Larson for his failure to appear at the hearing in this matter until after February 11, 1988?

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. John Senior was employed by the Respondents as an Associate Membership

Director (programmer) from January 4, 1978 to approximately November 15, 1980.

2. John Senior was born May 20, 1956. After graduating in 1974 from Edina High School, where he had excelled in golf, Mr. Senior attended the University of Montevallo, in Montevallo, Alabama and the University of Alabama-

Birmingham. He had a golf scholarship from Montevallo, and completed a three semester training course as a paramedic at Alabama-Birmingham. He has worked as a volunteer paramedic for fire departments in Birmingham, Alabama and Edina,

Minnesota.

3. Mr. Senior was a member of the National Amateur Golf Tour in the mid-to-late 1970s. The tour operates from the late spring to early fall each year. During one of the years he was on the Amateur Tour, Senior missed qualifying for the United States Open by one stroke.

After leaving school in 1975 or 1976, Mr. Senior supported himself as a shift manager at two family restaurants, and as a bartender, to earn money for going on the golf tour. During 1977, Mr. Senior's only employment was at a sporting goods store in Edina. He started as a salesman, and after a short time became the store's manager.

4. Sometime in late 1977, Marc Crevier, a Vice President of Sports and Health, offered Mr. Senior employment as a programmer after a talk at the Normandale Sports and Health Club in Bloomington. Senior had been an active member of the Club for an extended period, and Crevier told him that he thought Senior had already been working for the Clubs. The hiring process for Mr. Senior was irregular because he was hired, effective January 4, 1978, without having filled out an employment application and without having been interviewed by the Company President, Arthur Owens.

5. After a short training period at the Normandale Club, Mr. Senior was assigned to work as a programmer at the newly-opened Northland Park Sports and Health Club in Brooklyn Park. The basic duties of a programmer are membership sales and "programming" of club members. Programming involves periodic weighing and measuring of members, advising members on nutritional and general health habits, and assignment-supervision of exercise programs for members.

6. At the Northland Park Club, Mr. Senior (the "Employee") worked under the supervision of Edythe Wandell, the Club manager. He was employed at Northland Park until late 1979 or early 1980. During this period of time, Mr. Senior assumed extra duties which went beyond those required in the basic job responsibilities of an associate membership director. Specifically, he took
on the tasks of scheduling the programmers' work shifts, scheduling of locker room attendants' work shifts, supervision of the locker room attendants and supervision of the "pro shop" at Northland Park. Senior never received additional compensation, above and beyond his compensation as a programmer (a monthly "base" salary plus commissions on sales of memberships) for performance

of the extra tasks. Performance of these tasks required several hours per week, in addition to the six 7-hour shifts per week Senior put in as a programmer.

7. The tasks mentioned in the preceding Finding, if not performed by Mr. Senior, would have to have been performed by the Club Manager or some other supervisory or management person. Club Manager Edythe Wandell and Company Vice President (Operations) Marc Crevier were aware that Mr. Senior was performing the extra duties, and acquiesced in his performance of them.

8. In late 1979 or early 1980, Mr. Senior was transferred by Crevier to work as a programmer at the Normandale Sports and Health Club, where he remained until the end of his employment for the Respondents. At Normandale, where he worked under the direct supervision of Club Manager John Stewart, Senior continued to perform the duties of pro shop supervision and scheduling-

supervision of locker room attendants.

9. During June of 1979, Crevier reprimanded John Senior regarding his retaining possession of racquetball racquets which had been given to him on a trial-use basis by representatives of sporting goods companies. Senior received the racquets from representatives who called on the pro shops in the Respondents' Clubs. It is customary in the sporting goods sales business for sales people to allow store managers to use new products they are trying to sell to the stores, and the sales people rarely ask for the return of such "demonstrator" equipment. Senior understood this custom from his previous experiences as manager of a sporting goods store. Many of the sales people who called on him at the pro shop at Sports and Health were known to him from his previous employment.

Crevier had noticed several items of demonstrator equipment in Senior's racquet bag, and asked how Senior had come into possession of them. Senior explained that he had been given the racquets by various sales representa-

tives, and that it was his understanding they were his to keep unless the representatives asked for their return.

10. Marc Crevier accused John Senior of stealing the racquets mentioned in the previous Finding. Crevier made the accusation because he understood company policy to be that such "demonstrator" equipment belongs to Sports and Health, and became a part of the pro shops' inventories when the sales repre-

sentatives gave them away. The policy had been enunciated to Crevier and Forest Larson, the company's other Vice President, by President Arthur Owens in 1978, when the company decided to take over direct operation of the shops.

The shops had been operated previously by Roy Halverson. During the negotiations involving the "buyout" of Halverson, a dispute arose as to whether such demonstrator equipment belonged to Halverson or to the Club, and Owens ruled that they belonged in inventory. Crevier assumed Senior knew this because he assumed Forest Larson (who had responsibility for finance and accounting at the pro shops) had communicated the policy to the Employee. In fact, Senior was unaware of the Company policy at the time he was confronted by Crevier.

11. Rather than discharging Mr. Senior for the perceived theft of the sporting goods equipment, Crevier arranged for Senior to meet with Arthur Owens, who would have the final word on the extent of punishment, if any.

Senior met with Owens and discussed the incident detailed in the preceding two Findings. Owens told Senior that he could continue working at Sports and Health if he was sorry about the affair and asked Senior to join him in prayer. Mr. Senior, who wanted to retain his position, told Owens he was sorry and gave him two of the racquets involved in the dispute. He also prayed with Owens. Senior did not agree that he was at fault for having retained possession of the racquets, but he gave them back, apologized, and joined Owens in prayer in order to keep his job. He kept his feeling that he was not at fault to himself. After meeting with Owens, Mr. Senior resumed his duties at the Northland Park Club.

12. Edythe Wandell retired from the employment of Sports and Health Club in early 1980. Prior to Wandell's leaving as manager at the Northland Park location, Company management (Respondents Owens, Crevier, and Larson) selected Glen Beckett, who had been managing their St. Louis Park Club, to succeed her. Before he took over the management of Northland Park, Beckett made the Respondents aware that he did not want to work with Mr. Senior, and Senior was transferred to the Normandale Club.

13. John Senior was employed as a programmer for the Respondents at their Normandale Club for almost one year, until mid-November of 1980. He worked under Club Manager John Stewart. In addition to his duties as a programmer, Mr. Senior managed the pro shop at the Club and scheduled work shifts for and supervised the locker room attendants. He received no extra compensation for the performance of these tasks, which added several hours per week to his regular work schedule. No one else performed such duties at Normandale.

14. Sports and Health had an appointment book system that allowed any programmer or manager to schedule programming sessions for new members at any other Club. The person making the sale could have the new members' initial contact recorded in the books at the Club the member(s) wanted to attend, and by this procedure the employee who actually sold the membership(s) would get credit and commission for the sale. It was not uncommon for prospective members to have had an earlier contact with another salesperson, and to have committed to a time for an initial programming session, and then not show up until later. In such cases, if the members had a later session with another programmer, or a later appointment, the sale was considered to be credited to the programmer with whom they had the initial contact.

15. On or about November 15, 1980 John Senior became involved in a dispute over entitlement to a commission for the sale of a new membership with Brian Gust, who was the Respondents' Club Manager at St. Louis Park. In November of 1980, Brian Gust called the Normandale Club to book a programming session for a couple (family membership) who were becoming new members. Mr. Senior informed Gust that he (Senior) had already sold memberships to the people involved and claimed a right to the resultant commission.

16. On the following day, Mr. Gust informed Marc Crevier that he had gone to the Normandale Club late the previous evening to see if Senior's alleged contact with the new member had been "booked", and that the was unable to find
an entry crediting Senior with the initial contact. Gust also told Crevier that another employee (Vic Janowiec) had helped him search the records and that no evidence was found showing that Senior had made the initial contact.

17. After hearing the basis of Brian Gust's claim for sales credit, Crevier checked the books at Normandale. John Senior, Brian Gust and Vic Janowiec were all present. Crevier found an entry for the members in question, which entry showed that Senior had booked the people on September 27.

Prior to the search, Senior told Crevier that he had made the entry at the time of the contact in September, and Gust and Janowiec maintained the entry had not been there when they looked the night before.

18. Crevier decided to believe Gust and Janowiec and concluded that the entry establishing Senior's entitlement had not been made until just before this last look at the records. Crevier accused Senior of trying to steal a commission and discharged him from employment. Crevier based his decision on his belief that Senior had a prior "track record" of theft, as shown by his attempt to misappropriate racquets at Northland Park, and felt he could not afford to give the employee yet "another chance".

19. Throughout the course of John Senior's employment at Sports and Health, programmers were encouraged to attend Bible studies, conducted weekly at the start or end of a shift under the leadership of Club Managers (Edythe Wandell at Northland Park, John Stewart at Normandale). John Senior is a religious person, but he never attended Bible studies. He did not agree with the Company management's form of religious expression, which included proselytizing of other employees and members and open witnessing for Jesus Christ. At some point during his three years of employment at Sports and Health, Mr. Senior also stopped regular attendance at the weekly meeting of the company-sponsored Toastmasters Club, because the meetings were being dominated by speakers who gave talks emphasizing the role Jesus Christ was playing in their lives. He avoided going to Toastmasters by scheduling himself to work at the same time or by working at the pro shops.

20. In approximately July of 1978, after becoming familiar with his responsibilities as a programmer, Mr. Senior began to inquire with company management, principally Marc Crevier and Forest Larson, about being promoted into a management position at one of the Respondents' Clubs. Senior felt he was qualified because he had learned how the Clubs operated and he had previous management experience. He persisted in such inquiries on a regular basis for the rest of the time he worked for the Respondents. By his estimation, he brought up the subject at least once a week. On occasions when he brought up the subject, he was informed by the Respondents' management personnel that he would be considered for management if he went to Bible studies and "cut out his partying". Senior was never promoted and never offered a management position in the Company.

21. During the course of his employment with Sports and Health, Mr. Senior attended parties where alcohol was consumed and frequently drank beer on such occasions. He never consumed alcohol while working or during the time of a shift. On one occasion when he consumed what he considered to be too much beer after a golf tournament, Senior called Edythe Wandell and told her he did not feel fit to come to work later that afternoon. He was excused from work.

22. John Senior is 6'2" tall, is large-boned and has a large body structure. During his employment at Sports and Health, he weighed between 205 and 210 pounds. After the transfer to Normandale, Stewart and Crevier had Mr. Senior "weigh in" on a regular basis. They wanted him to weigh less than 200 pounds, but the Employee never weighed less than 205 prior to his discharge. Crevier frequently told Senior that the weight would come off if he stopped partying and beer drinking. Senior's weight was not a factor in the loss of his employment.

23. After the time that John Senior first inquired about being promoted into management at Sports and Health, specifically inquiring about being a Club Manager, through the time he was terminated in late 1980, at least three people with less seniority than he were made Club Managers for the Respondents.

Two of those people, John Stewart and Glen Beckett, were approximately five years older than John Senior. Stewart was a prominent major league professional hockey player for several years. Beckett played minor league professional hockey and also competed as a body builder.

Glen Beckett was hired approximately 3-4 months after Mr. Senior began his employment with Sports and Health and, by early 1979, was managing the St. Louis Park Club. Upon Edythe Wandell's retirement, Beckett became the Manager at Northland Park, a larger club than St. Louis Park. John Stewart began his employment with the company approximately one year after Mr. Senior and served only a short time as a programmer before being promoted into management. As noted above, he was the Manager at the Normandale Club, another of the Company's "large" locations, during 1980.

Dan Kruse, who was younger than Mr. Senior, began employment as a programmer for Sports and Health just after graduating from college in 1979. After a short time serving as a programmer, Mr. Kruse was promoted to Club Manager at the LaSalle Sports and Health Club in Minneapolis.

24. John Stewart, Glen Beckett and Dan Kruse all attended Bible studies throughout their employment at Sports and Health, and led Bible studies for programmers at the Clubs they managed. All three men are "Born-Again" Christians who proselytized members, co-workers and persons who worked under them, openly witnessed for Jesus Christ, and distributed religious pamphlets at the Club. They share the religious beliefs and practices of Respondents Owens, Crevier and Larson. Mr. Senior did not share such religious beliefs and practices.

25. Two other persons, Brian Gust and Vicki Owens, were promoted to Club Manager positions during the period John Senior was employed by the Respondents. Gust and Owens, who was the daughter of Sports and Health's President, Arthur Owens, also shared the religious beliefs and practices of the individual Respondents. At the time of their promotions, each had less continuous seniority as an Associate Membership Director than Mr. Senior. However, Ms. Owens had been employed by the Company for several years in a variety of capacities, both in the Clubs and in the Company office, and Mr. Gust had been employed as a programmer before Mr. Senior was hired. Gust, a world-class amateur wrestler, had qualified for the 1980 United States Olympic Greco-Roman Wrestling Team. He was on leave of absence for an extensive period, after making the wrestling team, until it was disbanded due to the United States' boycott of the 1980 (Moscow) Games. Upon his return to Sports and Health, Gust became Manager of the St. Louis Park Club, replacing Vicki Owens.

26. During the course of his employment for the Respondents, Mr. Senior was competent in the performance of his duties and consistently ranked at or near the top in commission earnings for new membership sales.

27. In 1979, Mr. Senior earned $14,678.00 in sales and commissions. The average net income for Club Managers that year was $20,619.00. In 1980, Senior earned approximately $16,000. The average Managers' salary at Sports and Health Club during that year was $19,786.

After his discharge from Sports and Health, Mr. Senior received unemploy-

ment benefits and qualified for licensure as an insurance salesperson. His income in 1981 was $25,000. It increased to $35,000 in 1982. For these years,

his income was greater than he would have earned as a Sports and Health Manager.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

1. Any of the preceding Findings of Fact more properly termed Conclusions

of Law are hereby adopted as such.

2. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

5. Under State, by McClure v. Sports and Health Club, 370 N.W.2d 844 (Minn. 1985), appeal dismissed, 106 S.Ct. 3315, 92 L.Ed.2d 730 (1986), the Respondents engaged in prohibited employment practices by discriminating against people with respect to terms, conditions and upgrading of employment because of religion and by discharging persons from employment because of religion.

6. The Complainant has made a prima facie case that John Senior had adverse action taken against him with respect to the terms, conditions or upgrading of his employment because of religion by showing that Mr. Senior, who did not share the Respondents' religious beliefs or practices, was never considered for a promotion within the Respondents' organization while persons with less seniority in the Respondents' organization, and who shared the religious beliefs and practices of the Respondents, were promoted.

7. The Respondents have failed to demonstrate a lawful reason for never considering Mr. Senior for promotion because of religion. As a result, Mr. Senior is entitled to damages in this matter as a member of Class 2.

8. The Complainant has made a prima facie case that Mr. Senior was a potential victim of discrimination by showing that he was a qualified employee who did not share the religious beliefs of the Respondents' management who was discharged from employment after a dispute over "stealing" of a membership commission was resolved in favor of an employee who shared the religious beliefs of the Respondents' management.

9. The Respondents have demonstrated by a preponderance of the evidence that the discharge of Mr. Senior was for reasons that do not violate the Minnesota Human Rights Act. Mr. Senior is not a proper member of Class 1 in this action.

10. John Senior is entitled to compensatory damages of $3,000.00 as a member of Class 2.

11. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure v. Sports and Health Club, et al., HR-82-005-RL at p. 71.

12. In accordance with the Minnesota Supreme Court decision herein, the Respondents are jointly and severally liable for all damages ordered herein. State, by McClure v. Sports and Health Club, 370 N.W.2d 844, 853-54 (Minn. 1985).

13. The issue of whether Forest Larson can be held separately liable in this matter because of the prima facie showings made by the Complainant that Mr. Senior is a potential member of Classes 1 and 2 in this action are moot. With respect to Class 1, the issue is moot because the Complainant seeks no compensatory damages for the discharge of Mr. Senior and no punitive damages are available. With respect to Class 2, joint and several liability against all Respondents has been found, and damages awarded.

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents shall pay to John Senior $3,000.00 in compensatory damages, plus six percent interest from December 1, 1980, pursuant to Minn. Stat. § 334.01.

Dated this day of September, 1988.

RICHARD C. LUIS

Administrative Law Judge

MEMORANDUM

Minn. Stat. § 363.03, subd. 1 prohibits discrimination in employment on account of religion, marital status and sex. It also prohibits pre-employment
inquiry pertaining to such subjects. The Minnesota Supreme Court, in determining what sort of actions constitute prohibited discriminatory practices under the Human Rights Act and in dictating how such discrimination must be proven, has followed the approach of the federal courts in interpreting a similar statute, Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e. et seq., and has decided that court decisions under Title VII are applicable to similar actions under state law. See Danz v. Jones, 263 N.W.2d 395 (Minn. 1978) and Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983).

The Teamsters case involved discrimination by trucking companies and the Union against Black and Hispanic employees who were initially hired only as servicemen or local-city drivers, positions less desirable and lower-paying than over-the-road, long-distance driving jobs. Applying the reasoning of the above-quoted paragraph to this case, once the Complainant establishes that a programmer who does not share the religious beliefs and practices of the Respondents was denied consideration for promotion, in part, because he did not share those beliefs and practices and did not attend weekly Bible studies, and once the Complainant establishes that the Respondents promoted persons who shared their religious beliefs and practices, including attendance at or leading of Bible studies, the burden of proof shifts to the Respondents to establish by a preponderance of the evidence that the protected Class Member was not promoted for lawful, non-discriminatory reasons. That burden has not been met in this case.

With respect to Mr. Senior's discharge from employment, once the Complainant establishes that Mr. Senior, an otherwise competent employee who did not share the religious beliefs and practices of the Respondents, was discharged, and the Respondents continued to seek persons to work as associate membership directors after his discharge, the burden of proof shifts to the Respondents to establish that Senior was discharged for lawful, non-discriminatory reasons. The Administrative Law Judge has held that the Respondents have met their burden on this issue.

The Complainant seeks no compensatory damages for Mr. Senior because of his allegedly discriminatory discharge because Senior was able to secure employment after leaving Sports and Health Club that paid more than he earned, or would have earned, had he been in management at the Club.

Regarding whether the discharge was discriminatory, the Judge is persuaded that religion was not a factor in the discharge action taken by Mr. Crevier in November of 1980. The Respondents have established that the discharge occurred because Crevier was persuaded that Mr. Senior had attempted to "steal" a credit for membership, which credit (and commission) belonged to another employee. Mr. Crevier's belief that John Senior had altered the membership enrollment records was supported, in his mind, by the fact that Senior had earlier attempted to "steal" racquetball racquets. Thus, Crevier believed that Senior had a "track record" of such petty theft and that he was therefore justified in disciplining the Employee. The Administrative Law Judge is convinced that Mr. Crevier actually made his decision to terminate Mr. Senior for the reason articulated, theft, and is not persuaded by the evidence offered by the Complainant to show that Crevier's reason was merely a pretext for illegal discrimination.

It has been found that Mr. Senior did not, in fact, attempt to steal the racquets at Northland Park. However, nothing in the evidence shows that this fact was ever established in the mind of any of the Respondents. Crevier believed all along that Senior was aware of the Club policy that "demonstrator equipment" became the property of the Club, and Mr. Senior did not articulate his contrary point of view to Mr. Owens after Mr. Crevier referred the Employee to the Club President for a decision on appropriate discipline. The Administrative Law Judge believes Crevier's testimony to the effect that he still believed Senior was culpable for the earlier racquet incident when the ultimate discharge action was taken.

The Administrative Law Judge need not decide whether Mr. Senior attempted to "steal" credit for the new memberships from Brian Gust, for two reasons: (1) the question is moot, because no compensatory damages are sought for the discharge and it has been ruled earlier that no punitive damages should be awarded; and (2) the Judge is persuaded that Crevier actually believed Senior had attempted the wrongful act. Whether or not Crevier was correct in that decision, his decision that Senior was lying and had attempted to take credit and resultant commission wrongfully was the actual reason for discharge. That decision, right or wrong, was not based on Mr. Senior's religion, sex or marital status and therefore cannot serve as a basis for awarding damages in this action.

Damages have been awarded to Mr. Senior for not being considered for promotion, or promoted, because of religion during the course of his employment at Sports and Health. Mr. Senior was a successful salesperson while in the Respondents' employ. After several months of service as a programmer, he began periodic inquiries about promotion to management and continued to so inquire throughout the remaining course of his employment. The Administrative Law Judge believes his testimony that consideration of promotion and promotion were denied, in part, because he did not attend the Bible study sessions offered by the Respondents.

Senior also testified that the Respondents told him he would not be promoted unless he "cut out his partying", and that he continued to attend parties, at which he consumed beer, during his off hours. Thus, the facts of this case establish that the employer had "mixed motives" for not promoting Mr. Senior -- an illegal discriminatory reason based on religion (for not attending Bible studies) and a non-discriminatory reason (an off-duty lifestyle of partying and beer drinking). The Respondents also testified that Senior was not promoted because he was inefficient as a programmer, had a tendency to "look busy" without getting much work done, and once came to work intoxicated. If it is reasonable to conclude that the Respondent would have made the same decision (not to promote Mr. Senior), even if there had been a complete absence of the unlawful discriminatory reason, the argument is that an award of damages for violation of the Human Rights Act is inappropriate. The Minnesota Supreme Court rejected that argument in the case of Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619 (Minn. 1988).

The Anderson case differs from this class action matter, in that it involved a determination of liability using the traditional McDonnell-Douglas and Burdine approach, where the Complainant must establish that the reasons stated by the employer for adverse employment action are a pretext for actual discrimination.¹ In this class action matter, the burden of proof is on

the Respondents to establish that their articulated reasons for non-promotion were not discriminatory. The Judge concludes that this procedural difference in burden of proof is not enough to make Anderson v. Hunter, Keith, Marshall & Co. inapplicable here, in a situation where it has been decided that Mr. Senior's testimony that he was not promoted, or considered for promotion because of his non-attendance at Bible studies is truthful. Once that

¹Anderson involved a pregnant woman discharged in part because she was pregnant and in part because she was allegedly incompetent and dishonest.

threshold of whether a discriminatory reason exists for adverse employment action has been crossed, the Anderson case holds that liability for that discrimination is determined, regardless of other reasons for discharge. 417 N.W.2d 619, at 624-26.

The Respondents' ascertion that Mr. Senior was offered a position as manager of the LaSalle Sports and Health Club, and turned it down because he did not want to be in an atmosphere permeated by homosexuality, has been rejected. The Administrative Law Judge believes Mr. Senior's testimony that had such an offer been made, he would have taken it. To conclude that Mr. Senior was once offered a Club Manager's job is totally inconsistent with the Respondents' testimony that he was lazy, overweight, partied and drank too much, once came to work intoxicated and was a thief.

Compensatory damages awarded to Mr. Senior have been limited to $3,000.00, because the record is unclear regarding when he would have advanced to the higher salary and commission potential following promotion to a management position. The Complainant initially argued that the compensatory damages should be set at nearly $10,000, but this argument assumes Mr. Senior was ready for promotion and that openings in management existed from January 1, 1979 until the end of his period of employment. In her final submission, Complainant's counsel argued for compensatory damages of $4,386 (plus interest), based on an assumption that Senior was entitled to promotion on and after October 1, 1979. The Complainant also presumes that Mr. Senior would have been promoted ahead of any of Glenn Beckett, John Stewart, Dan Kruse, Vicki Owens or Brian Gust. Given the age, experience and education of these persons, as compared to the same data on Mr. Senior, the Judge is unable to accept fully the presumptions that serve as bases for the proposed award. See Findings 23 and 24. An award of $3,000.00 in compensatory damages is deemed appropriate for the illegal discrimination suffered in this case. Interest on the $3,000.00 awarded should be computed effective with the first day of the month after the Employee was discharged, or December 1, 1980.

R.C.L.

Service List

Stephen W. Cooper, Commissioner Richard L. Varco, Jr.

Department of Human Rights Assistant Attorney General

Fifth Floor Bremer Tower 1100 Bremer Tower

Seventh Place & Minnesota Street 7th Place & Minnesota Street

St. Paul, MN 55101 St. Paul, MN 55101

Susan M. Robiner Arthur W. Owens

Leonard, Street & Deinard 6535 Peaceful Lane

Suite 1500, 100 South Fifth Street Chanhassen, MN 553l7

Minneapolis, MN 55402

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

September 2, l988

Stephen W. Cooper, Commissioner Richard L. Varco, Jr.

Department of Human Rights Assistant Attorney General

Fifth Floor Bremer Tower 1100 Bremer Tower

Seventh Place & Minnesota Street 7th Place and Minnesota Street

St. Paul, MN 55101 St. Paul, MN 55101

Susan M. Robiner Arthur W. Owens

Leonard, Street & Deinard 6535 Peaceful Lane

Suite 1500, 100 South Fifth Street Chanhassen, MN 553l7

Minneapolis, MN 55402

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Re:State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Class Action Case of John Senior); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Parties and Counsel:

Enclosed and served upon you by mail, please find the Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge (Class Action - John Senior) in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

RCL/lr Telephone: 612/341-7610

Enclosures

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDER (DAMAGES -

Complainant, JOSEPH WILLIAMS)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on September 1, 1988 at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on October 3, 1988.

Andrea M. Kircher, Special Assistant Attorney General, 1100 Bremer Tower, St. Paul, Minnesota 55101, appeared on behalf of the Complainant. There was no appearance by or on behalf of any of the Respondents.

NOTICE

STATEMENT OF ISSUE

Whether Joseph Williams is entitled to monetary relief in the form of compensatory and/or punitive damages and, if so, in what amounts?

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. On July 22, 1983, Joseph (Joe) Williams testified before the undersigned Administrative Law Judge at the underlying liability hearing in this matter. Mr. Williams testified, and was cross-examined, regarding an employment interview with Sports and Health Vice-President Marc Crevier during the summer of 1980. (T. V.--Underlying Hearing, pp. 5-43).

2. On August 16, 1983, Marc Crevier testified before the undersigned Administrative Law Judge at the underlying liability hearing in this matter. Mr. Crevier testified, and was cross-examined, regarding the employment interview with Joe Williams during the summer of 1980. (T. XI--Underlying Hearing, pp. 30-38).

3. On April 26, 1984, the undersigned Administrative Law Judge issued Findings of Fact, Conclusions and Orders in the underlying liability portion of this matter. Findings 40 and 41, Conclusion 16, the first two paragraphs under the subheading Joseph (Joe) Williams at page 34 in the Memorandum of the April 26, 1984 Report, the first two sentences in page 39 of the Memorandum and the three sentences from the fourth line from the bottom of page 39 through the third line from the top of page 40 in the Memorandum all relate to the 1980 employment interview. Findings 40 and 41 of the April 26, 1984 Report are incorporated by reference herein. They are reproduced at the end of the Memorandum of this Report.

4. On April 26, 1984, the Administrative Law Judge ordered the Respondents to pay compensatory damages to Joe Williams for requiring him to furnish information pertaining to religion before being hired.

5. What Williams anticipated would be a job interview turned into, from his point of view, a debate on religious practices. Mr. Williams was extremely upset by Crevier's requirement that he attend Bible studies if he was to be employed at Sports and Health. After Williams refused that condition, he and Crevier got into an argument which terminated by Crevier's telling Williams that he didn't want "my (Williams') kind" around.

6. Mr. Williams was of limited reading ability and was not able to write at the time of the above-noted interview with Marc Crevier, and since positions as Associate Membership Directors (programmers) at Sports and Health required persons who were able to keep current a large amount of records, no damages are sought by the Complainant as a result of Sport and Health's failure to hire Mr. Williams as an Associate Membership Director.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly termed Conclusions

of Law are hereby adopted as such.

2. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

4. The Respondents violated Minn. Stat. § 363.03, subd. 1(4)(a) by requiring Joseph Williams to furnish information pertaining to religion before being employed. This Conclusion repeats Conclusion 16 reached by the Administrative Law Judge in his Report on the underlying liability hearing (HR-82-005-RL, 4/26/84, p. 19).

5. Joe Williams is not entitled to compensatory damages in this matter because (1) he was not qualified for employment as an Associate Membership Director with the Respondents, and (2) as of the summer of 1980, no compensatory damages for mental anguish and suffering were available under the Minnesota Human Rights Act.

6. Joe Williams is entitled to an award of punitive damages against the Respondents in the amount of $1,000.00.

7. The Respondents are jointly and severally liable for all damages awarded herein.

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents pay to Joseph (Joe) Williams $1,000.00 in punitive damages.

Dated this day of November, 1988.

RICHARD C. LUIS

Administrative Law Judge

Reported: Taped.

MEMORANDUM

The question of whether unlawful discrimination on the part of the Respondents occurred against Joe Williams has already been decided. The Minnesota Supreme Court affirmed the Administrative Law Judge's Findings and Conclusions regarding Mr. Williams, the United States Supreme Court dismissed the Respondents' appeal, and all that remains is to determine the appropriate level of damages.

Since Mr. Williams was not qualified to work for Sports and Health in any case, and because the statute authorizing compensatory damages for mental anguish and suffering in Human Rights cases was not made law until 1981, the question becomes whether relief is available to Mr. Williams in the form of punitive damages.

In his Memorandum issued in the underlying case (HR-82-005-RL, 4-26-84) at pages 70-71, the Administrative Law Judge stated why he did not believe that punitive damages should be awarded against the Respondents in this case. Since then, in all of the individual actions in this case, this Administrative Law Judge has awarded punitive damages only when causes of action have arisen after April 26, 1984, the date he Ordered the Respondents to cease and desist their illegal discrimination. Prior to April 26, 1984, the Respondents' actions were not viewed as willful.

This case provides an exception to the general principles regarding punitive damages mentioned and referenced in the preceding paragraph. Punitive damages have been awarded to Joe Williams because the discrimination against him was flagrant and willful. The evidence is uncontroverted that Marc Crevier made adherence to certain religious principles ("Born-Again" Christianity) and practices (a commitment to attend weekly Bible studies) conditions precedent to employment. Such requirements are obviously and willfully discriminatory. The evidence is clear and convincing that Crevier's imposition of such pre-employment requirements on Joe Williams showed a willful indifference to Mr. Williams' rights to practice religion in a manner of his own choosing. See Minn. Stat. § 549.20, subd. 1.

Finding 3 incorporates by reference Findings 40 and 41 in the Report for the underlying liability hearing. Those Findings read:

40. During the summer of 1980, Joe Williams, who had been a member of the Sports and Health Clubs, approached Marc
Crevier at the LaSalle Court Club (where he usually worked out) about the possiblity [sic] of employment with the Respondents' organization. Williams, a champion body builder, had recently quit his other employment to concen-

trate on some up-coming body building competitions, and wanted to work in an environment where he could continue his training. He was also in poor financial circumstances due to a recent divorce.

41. Although there was no current opening for an associate membership director, Crevier did discuss with Williams what was involved in the job, that the job description was based on Biblical principles and explained to Williams what the religious beliefs of the Sports and Health Clubs' management

were. Specifically, he told Williams that he had to be a "reborn" Christian in order to be hired. Williams had no problem with this requirement. Crevier also said that Williams would have to go to weekly Bible studies. This led to a discussion which upset Williams, who then decided not to fill out an application for employment, although Crevier offered him the opportunity to do so for considera-

tion when an opening occurred in the future. Williams decided not to continue with the application process because

he did not want to make Crevier any more upset and, thus, possibly jeopardize his membership.

R.C.L.

Service List

Stephen W. Cooper, Commissioner Andrea Kircher

Department of Human Rights Special Assistant Attorney General

Fifth Floor Bremer Tower 1100 Bremer Tower

Seventh Place & Minnesota Street Seventh Place & Minnesota Street

St. Paul, MN 55101 St. Paul, MN 55101

Sports and Health Club, Inc. Arthur W. Owens

Arthur W. Owens, President 6535 Peaceful Lane

6535 Peaceful Lane Chanhassen, MN 553l7

Chanhassen, MN 55317

Marc Crevier

Forest Larson 10965 Fieldcrest Road

5005 Richmond Drive Eden Prairie, MN 55344

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

November 8, l988

Stephen W. Cooper, Commissioner

Department of Human Rights

Fifth Floor Bremer Tower

Seventh Place & Minnesota Street

St. Paul, MN 55101

Re: State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Damages - Joseph Williams); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Commissioner Cooper:

Enclosed and served upon you by mail, please find Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge (Damages - Joseph Williams) in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

RCL/lr Telephone: 612/341-7610

Enclosures

cc: Andrea Kircher

Richard L. Varco, Jr.

Sports and Health Club, Inc.

Arthur Owens

Marc Crevier

Forest Larson

Administrative Law Judge Janice K. Frankman

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW,

AND ORDERS (CLASS ACTION -

Complainant, PAMELA LINDGREN)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above-entitled matter came on for hearing before Administrative Law Judge Richard C. Luis on September 29, 1988 at the Office of Administrative Hearings in Minneapolis. The record in this matter closed on October 20, 1988.

Daniel W. Blake, Certified Student Attorney, and Anna W. Shavers, Clinical Professor, University of Minnesota Law School Civil Practice Clinic, 190 Law Center, 229-19th Avenue South, Minneapolis, Minnesota 55455, appeared on behalf of the Complainant. There was no appearance by or on behalf of any of the Respondents.

NOTICE

STATEMENT OF ISSUES

1. Whether Pamela Lindgren qualifies for membership in Class 1 (persons discharged from their employment because of religion), Class 2 (persons discriminated against with respect to the terms, conditions and upgrading of their employment because of religion) and/or Class 3 (persons subjected to acts of reprisal affecting the terms and conditions of their employment, including discharge from employment, for opposing practices by the Respondents that violate the Minnesota Human Rights Act) in this action?

2. If Pamela Lindgren is a proper member of Classes 1, 2 or 3, whether she is entitled to monetary relief in the form of compensatory damages, including damages for mental anguish and suffering, and punitive damages?

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. Pamela Lindgren ("Employee") was employed as an Associate Membership Director (programmer) at the Respondents' Normandale Sports and Health Club in Bloomington from January 3, 1984 to July 12, 1984. She was on medical leave for approximately five weeks of that time, between April 13 and May 19, 1984.

2. Ms. Lindgren began employment for Sports and Health after undergoing a series of job interviews with Company President Arthur Owens, Company Vice-

President Forest Larson and Normandale Club Manager John Stewart. The interviews began in December of 1983. During those interviews, Ms. Lindgren was asked about her religious beliefs, church attendance and marital status.

Company officials stressed the Club's Christian philosophy during the interview, and Ms. Lindgren was told that attendance at Thursday Bible study sessions was required of all Associate Membership Directors. Ms. Lindgren, who was a member of a Pentecostal church congregation in Minneapolis, was not disturbed by the employment interview.

3. Ms. Lindgren had applied for employment at Sports and Health because she enjoyed the physical aspects of a programmer's work and wanted to be in an environment where she could rehabilitate herself after suffering a ruptured disc on a previous job which required repeated heavy lifting. Ms. Lindgren was employed with the understanding that she would not be required to teach aerobics classes, which would have aggravated her back condition. Her long-

term goal in accepting employment at Sports and Health was to rehabilitate herself to the point where she could return to work as a sous (assistant) chef on a full-time basis.

4. Ms. Lindgren's starting pay was $800 per month. This figure was a draw against commissions. After three months of employment, the Employee became entitled to an $800 per month base salary plus a ten percent commission on all sales of new Club memberships. During the first three months of work, although employed only 20 hours per week, Ms. Lindgren was able to sell enough new memberships to exceed her $800 draw and earn commissions.

5. Upon her return from medical leave in late May, during which Ms. Lindgren underwent extensive tests diagnosing her back problems, she was placed on a straight wage of $4.65 per hour for full-time employment (172 hours per month). $4.65 per hour is the equivalent of an $800 monthly salary for full-time employment. However, since she continued to be actually working for only 20 hours per week, Lindgren's monthly base salary was, in effect, cut in half to $400. Although she continued to make sales and was assigned the same sales quotas as if she were employed full-time, Ms. Lindgren was not authorized the ten percent in commissions on new sales after her return to work.

6. Prior to going on medical leave, Ms. Lindgren had been approached several times by Normandale Club Manager John Stewart with respect to her religious practices. Specifically, Stewart had attempted to persuade Lindgren to attend the church attended by himself and his family, rather than her own church. He and other Normandale personnel also attempted to persuade Lindgren
to participate in a "witnessing" (proselytising) for Christ along Hennepin Avenue in Minneapolis. Each time she was approached in such a fashion, Lindgren refused to engage in the religious practice urged by Stewart and/or her co-workers. Each time, Lindgren explained that she preferred to practice religion in her own way, which was as a member of her Pentecostal congregation. Lindgren was bothered by the continued attempts to change her religious practices.

7. Ms. Lindgren's sales record was excellent. On June 26, 1984, her extra efforts as a salesperson were recognized by the Company with the payment to her of a $1,000 bonus. Throughout the extent of her employment as an Associate Membership Director, although she worked only 20 hours per week, Lindgren was paid an average of $243 per month in commissions. Full-time programmers averaged $394 per month in commissions (Company-wide) in 1984, $292 per month in 1985 and $202 per month in 1986.

8. Upon returning to work on or about May 20, Lindgren stopped going to Thursday Bible studies in order to devote more of her time to sales and paperwork. She decided she needed the time to build up sales contacts that had fallen off while she was on leave. Most of her new sales had come on referrals from persons she had been assigned to "program" (planning and overseeing of workout routines, giving advice on diet and nutrition) but these people had been reassigned to other programmers during her absence.

After Lindgren began skipping Bible studies, which occupied approximately 1.5 hours each Thursday, Manager John Stewart approached her and urged her to resume attending. Lindgren refused because she felt building up her sales was the more immediate priority.

9. On July 11, 1984, while Ms. Lindgren was in the Club's locker room preparing to enter the women's sauna, she was approached for advice on a body-building technique by one of the members she regularly advised. The member, who had a reputation in the Club as a lesbian, was dressed for working out. Lindgren stopped, talked with the member, and demonstrated the technique to her. At that time, Lindgren was wearing only a towel, wrapped around her waist, and was naked from the waist up. The saunas at Sports and Health Clubs were single-sex only, and persons using them were frequently nude during such times. Lindgren was dressed appropriately for a woman who was about to enter the sauna. There was no physical touching of the other person by either woman during the conversation-demonstration. After it was over, Lindgren went to the sauna and the member went to the workout floor.

10. After Lindgren completed her sauna, she was called into John Stewart's office. A Club member had told Stewart that she had seen Lindgren and the alleged lesbian together. Stewart questioned Lindgren at length about homosexuality and how the practice was against the word of God and therefore against the beliefs and practices under which the Club operated. He asked her why, if Sports and Health was a Christian-based club, she had been talking to a "known homosexual" without a shirt on. Lindgren explained that the woman was assigned to her for exercise program advice, and that she had been giving that advice. Stewart again pressed the question of why Lindgren had not worn a shirt while giving the advice, and Lindgren reminded him that she had been on the way to the sauna, a place where the women who used it were generally naked, when the member had approached her.

11. After Lindgren finished working her shift and went home, Stewart called her there and asked if Lindgren was, herself, a homosexual and whether she had ever engaged in a homosexual act. He told her that homosexuality was against the word of God and that association with homosexuals was anti-

Christian. He quoted Bible passages to her in an attempt to support these views. Lindgren had company at the time and refused to engage Stewart in this conversation. She had a similar telephone conversation with Sports and Health Club Vice-President Marc Crevier that same evening or on July 12, 1984.

12. On July 12, 1984, while Ms. Lindgren was supervising the workouts of several members on the exercise floor at the Normandale Club, she was approached by Marc Crevier regarding the events of the previous day (detailed in Findings 10 and 11). Crevier asked her, in front of her clients, whether her own homosexuality was the reason she was not going to Bible studies. Lindgren explained that she had skipped Bible studies to work on her sales. She also told Crevier that "what I do and whom I associate with should have no effect on my work".

13. When Lindgren reported to work on July 13, 1984, she was informed by a co-worker that John Stewart had decided to fire her and that she would not be working any more at Sports and Health. The co-worker stated that although "we all know why" Lindgren could no longer work at Sports and Health, that Stewart had told her to tell Lindgren that her position was no longer available because (1) she could not teach aerobics and (2) she could not work full-time.

14. Lindgren sought clarification of her employment status, since the condition that she would not be teaching aerobics and the condition that she could only work 20 hours per week were agreed to by the Company when she was hired. Her attempts to reach Stewart, Crevier and Owens by telephone for this clarification failed. She left messages for all of them to call her back, and none of them did. Lindgren never returned to work at Sports and Health.

15. By September 1, 1984, Lindgren was in good enough physical condition to work at Sports and Health on a full-time basis. Had she been so employed, and had she performed an average amount of sales for a Sports and Health Club programmer, she would have earned $800 per month in base salary and approximately $394 per month in commissions. During 1985, she would have earned $800 per month plus commissions of $292 per month. In 1986, she would have earned $800 per month plus commissions of $203 per month. See Stipulated Exhibit A.

16. During mid-August of 1984, Lindgren accepted part-time employment as a sous chef at the Ramada Hotel in Bloomington. The job was for 20 hours per week at $6.50 per hour. Lindgren continued this employment, at the same rate of pay, until July 1, 1986, when she became a full-time sous chef. The hotel elevated Lindgren to that status after she had been cleared by her doctor for full-time work as a sous chef, which job involves heavy lifting. It was the same type of employment at which Lindgren had suffered the ruptured disc, after which she looked for work at Sports and Health. She took the job at Sports and Health, in large part, to rehabilitate her back so that she could resume full-time work as a sous chef.

17. Employment as an Associate Membership Director at Sports and Health, under the restrictions mandated by Lindgren's physician and agreed to by
Sports and Health (no teaching of aerobics) was easier on the Employee's back, given her specific condition, than her employment as a sous chef. The lifting of food supplies as a sous chef requires repeated lifting motions that exacerbate any prior injury to the area she previously injured. Given her prior injury, it took 22 months longer for Lindgren to be able to return to work as a full-time sous chef than it would have taken to return to move into a position as a full-time programmer with restrictions at Sports and Health.

18. When Ms. Lindgren returned to work as a full-time sous chef at the Ramada Hotel on July 1, 1986, she was paid $6.50 per hour. Since then, her hours have increased to an average of over 60 per week.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly termed Conclusions

of Law are hereby adopted as such.

2. The Notice of Hearing was proper and all relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1987).

5. Under State, by McClure v. Sports and Health Club, 370 N.W.2d 844 (Minn. 1985), appeal dismissed, 106 S.Ct. 3315, 92 L.Ed.2d 730 (1986), the Respondents engaged in prohibited employment practices by discharging persons from employment based on religion, by discriminating against persons with respect to the terms, conditions and upgrading of their employment because of religion and by subjecting persons to acts of reprisal affecting the terms and conditions of their employment for opposing practices by the Respondents which violated the Minnesota Human Rights Act.

6. The Complainant has made a prima facie case that Pamela Lindgren was discharged from employment as an Associate Membership Director at Sports and Health Club because of religion. She is a potential member of Class 1 in this action.

7. The Complainant has made a prima facie case that Pamela Lindgren was discriminated against with respect to the terms and conditions of her employment because of religion when, after her return from medical leave, the Sports and Health Club ceased to pay her commissions for new membership sales. She is a potential member of Class 2 in this action.

8. The Complainant has made a prima facie case that Pamela Lindgren was subjected to an act of reprisal, discharge from employment, for opposing a
religious practice by the Respondents which violates the Human Rights Act. Ms. Lindgren stated to a Company Vice-President that what she did and who she associated with should have no effect on her work after being told that association with homosexuals was forbidden by the word of God and was therefore against Club policy and after being asked if she was homosexual because she had skipped Bible studies. She was discharged from employment before the start of her next work shift. She is a potential member of Class 3 in this action.

9. The Respondents, who did not appear and are in default in this proceeding, have not demonstrated that Ms. Lindgren's discharge was for lawful, non-discriminatory reasons or that the denial to her of commissions on new membership sales upon her return to work after a medical leave was for lawful, non-discriminatory reasons.

10. Since the reprisal taken against Ms. Lindgren (discharge), which qualifies her as a member of Class 3 in this action, is the same act which entitles her to membership in Class 1 in this action, her membership in those Classes merges for the purpose of calculating compensatory damages.

11. Pamela Lindgren is entitled to compensatory damages of $16,704 as a member of Classes 1, 2 and 3 in this action.

12. Ms. Lindgren's damages are $13,204, the sum of commissions denied after return from medical leave (the action that qualifies her for membership in Class 2 of this action), $694, the amount of wages and commissions she would have earned at Sports and Health during the month she was unemployed, $793, the difference between the amount of wages and commissions she would have earned at Sports and Health and the wages she earned at Ramada between August 16 and August 31, 1984, $117 (based in part on a $4.65-per-hour wage for 20 hours per week at Sports and Health) and the difference between the amount she would have earned in full-time employment at Sports and Health and the wages she earned at Ramada from September 1, 1984 to June 30, 1986, $11,600, calculated from a base salary of $800 per month plus average commissions of $393 per month for four months in 1984, $292 per month for all of 1985 and $202 per month for six months of 1986 (what she would have earned at Sports and Health) minus the $559 per month she earned at Ramada ($6.50 per hours times 20 hours per week times 4.3 weeks in a month).

13. Pamela Lindgren is entitled to compensatory damages for mental anguish and suffering in the amount of $3500 in this action.

14. Pamela Lindgren is entitled to an award of punitive damages in the amount of $6,000.

15. Minn. Stat. § 363.071, subd. 2 (1983 Supp.) requires the award of a civil penalty to the State where a violation of Chapter 363 is found, "taking into account the seriousness and extent of the violation, the public harm occasioned by the violation, whether the violation was intentional, and the financial resources of the Respondent". The State is entitled to payment of a civil penalty in the amount of $1,000 in this action.

16. In accordance with the Minnesota Supreme Court decision herein, the Respondents are jointly and severally liable for all damages awarded herein. State, by McClure v. Sports and Health Club, et al., 373 N.W.2d 844, 853-54 (Minn. 1985).

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDERS

IT IS HEREBY ORDERED that the Respondents pay to Pamela Lindgren compensatory damages of $16,704 ($13,204 in actual damages plus $3,500 for mental anguish and suffering) with six percent interest from July 13, 1984, in accordance with Minn. Stat. § 334.01.

IT IS FURTHER ORDERED that the Respondents pay to Pamela Lindgren $6,000 in punitive damages.

IT IS FURTHER ORDERED that the Respondents pay a civil penalty to the State of Minnesota in the amount of $1,000. Payment of the civil penalty shall be made to the Chief Administrative Law Judge of the Office of Administrative Hearings for remittance to the General Fund of the State of Minnesota.

Dated this day of November, 1988.

RICHARD C. LUIS

Administrative Law Judge

Reported: Taped.

MEMORANDUM

Under the Minnesota Human Rights Act, a member of a protected class who alleges that (s)he was treated differently from other persons because of
membership in that protected class carries the initial burden of proof of establishing a prima facie case by showing (1) (s)he is a member of a protected class; (2) (s)he was qualified for the job; (3) that an adverse employment action was taken against him/her; and (4) the employer assigned non-members of the protected class(es) to do the same work. Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983). In this case, the above-noted analytical approach, as modified by Byrd v. Roadway Express, Inc., 687 F.2d 85 (1982), was used by the Administrative Law Judge and the Minnesota Supreme Court in analyzing the claims made by Charging Parties in the "underlying" action that determined general liability for discriminatory actions against the Respondents and authorized the creation of classes of individuals for potential monetary and other relief. See Findings of Fact, Conclusions of Law and Order of the Administrative Law Judge in this matter, 4/26/84.

practices of Respondents' management has had her compensation reduced and was subsequently discharged from employment in close proximity to an incident in which she opposed a religious practice of Respondents' management, the burden then shifts to the Respondents to prove by a preponderance of the evidence that the potential Class Member had her compensation reduced and was subsequently discharged from employment for legitimate, non-discriminatory reasons. That burden has not been met in this case, where the Respondents are in default.

In this case, it is proper to infer that the Respondents ceased to pay Ms. Lindgren sales commissions upon her return to work from medical leave because she had earlier, and subsequently, refused to attend the church chosen by the Club Manager, had refused to join Club executives and some of her co-workers in "witnessing" for Christ and had stopped attending Bible studies. It is also proper to infer that Ms. Lindgren was discharged for not attending Bible studies and for voicing opposition to the Respondents' religious-based edict against association with homosexuals when her discharge came the day after she
had voiced opposition to the edict and the suggestion had been made that she was a practicing homosexual because she had not been attending Bible studies (where, presumably, the Respondents believed she would have learned to behave otherwise).

The Administrative Law Judge has awarded the damages Ordered above for several reasons. First, the Respondents offered no rebuttal to the Complainant's case. Second, the Complainant's only witness, Pamela Lindgren, was credible. Third, the reason given by the Employer for discharge, that a position as an Associate Membership Director where the occupant did not have to give aerobics instruction was no longer open is not believable. Apart from the immediate proximity in time of the discharge action to the confrontations Lindgren had with Stewart and Crevier regarding giving instruction in the locker room to a member believed by the Respondents to be homosexual, the fact that Lindgren had been employed with the same restrictions for six months, and had received a bonus for sales production just over two weeks prior to discharge, lead the Administrative Law Judge to conclude that the reason given by the Company to Lindgren for her discharge was a pretense for the real reason--a refusal to embrace the Respondents' religious beliefs on the subject of homosexuality. The fact that Lindgren had to sign an employment agreement obliging her to work at Sports and Health for 18 months (Exhibit 29) is further evidence that the lack of an available job was not the real reason for terminating her. It is noted that the Respondents have expressed, in previous hearings, that they were always looking for qualified Associate Membership Directors. The evidence is overwhelming that they had one in Pamela Lindgren.

Damages have been awarded for mental anguish and suffering because Lindgren's testimony is credible and unrebutted that she was continuously bothered by the Respondents' agents, particularly the Club Manager, with requests to go to his church, to "witness" for Christ outside the Club and to attend Bible studies. That emotional anguish and suffering ensued from the incident where the member sought instruction in the locker room is obvious. Lindgren was simply doing her job. That she was wearing only a towel around her waist at the time is readily explained by the fact that she was about to enter the sauna and had no prior expectation that a member would seek instruc-

tion at that precise moment. Instead of accepting this plausible view of the event, Stewart and Crevier subjected the Employee to a barrage of religious-

based advice and criticism. This was compounded by the fact that Stewart confronted the Employee in his office, in view of co-workers, and bothered her at home with at least one follow-up phone call. Crevier's confrontation with the Employee on the exercise floor, in view of several of the members whose exercises she oversaw, is particularly offensive and embarrassing. The Complainant sought $5,000 in damages for mental anguish and suffering. The Administrative Law Judge has reduced that portion of the award to $3,500 because Ms. Lindgren impressed him as an emotionally strong person who rebounded from the groundless humiliation she received and went on with her life and career quickly, without lingering doubts about her religious beliefs.

Punitive damages have been awarded because the Respondents' actions against Ms. Lindgren in violation of the Human Rights Act showed, by clear and convincing evidence, a willful indifference to Ms. Lindgren's rights to her own religious convictions and practices. Respondents engaged in these actions after the Administrative Law Judge issued Orders enjoining them from discrimination based on religion. Hennepin County District Judge Franklin Knoll and the Minnesota Court of Appeals each held that the Respondents'
refusal to obey the Orders of the Administrative Law Judge issued on April 26, 1984 was contemptuous. See State, by Johnson v. Sports and Health Club, Inc., et al., 392 N.W.2d 329 (Minn. App. 1986). The Judge's Orders of April 26, 1984 are the first pronouncement that the Respondents' business practices were illegal by a neutral fact-finder and a person empowered to take actions against the Respondents for illegal discrimination. The above-noted decision of the Minnesota Court of Appeals makes it clear that the Administrative Law Judge's Orders were to have been obeyed from the day they were issued. It is clear from the record of this case that the Respondents disregarded those Orders and made no effort to instruct their management personnel to obey them. After the Orders of April 26, 1984, the Respondents were apprised that their actions, although sincere, were not protected under the Constitution. They were ordered clearly to cease them. The non-cessation of the illegal, unprotected actions was a clear demonstration of "willful indifference to the rights of others" within the meaning of Minn. Stat. § 549.20.

Subdivision 3 of Section 549.20 mandates measurement of punitive damage awards by the factors which justly bear on the purpose of punitive damages, including seriousness of the hazard to the public arising from the defendants' misconduct, duration of the misconduct, the degree of the defendants' awareness of the hazard and of its excessiveness, the attitude of the defendant upon the discovery of the misconduct, the number and level of employees involved in causing the misconduct, the financial condition of the defendant, and the total effect of other punishment likely to be imposed on the defendant as a result of the misconduct, including compensatory and punitive damage awards to the plaintiff and other similarly situated persons, and the severity of any criminal penalty to which the defendant may be subject. After considering all the listed factors, the Administrative Law Judge has decided to assess punitive damages in this case in the maximum statutory amount of $6,000.

Counsel for the Complainant have argued that Ms. Lindgren is entitled to compensatory damages for lost wages based upon the total compensation she would have received from Sports and Health Club as a part-time (20 hours per week at $4.65 per hour) programmer earning full commissions, which they calculate at $243 per month for the entire period from Lindgren's discharge until her employment as a full-time sous chef. They erroneously computed that period of time as 46 months (it is 23.6 months). Their argument also fails to take into account that Lindgren was employed, part-time, from August 16, 1984 to June 30, 1986. In measuring actual damages, it is appropriate to set off the $559 per month earned as a sous chef against the potential income lost due to discrimination by the Respondents. The Administrative Law Judge concludes that the damages computation which he used, as detailed at Conclusion 12, measures best the difference between what Lindgren would have attained had there been no discrimination and what she actually earned in alternative, part-time employment. The computation measures what she earned against what she would have earned at Sports and Health part-time to September 1, 1984, and full-time thereafter. See Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 627 (Minn. 1988). In making these calculations, the Judge also assumed (conservatively, given Ms. Lindgren's obvious success in sales despite part-time employment and a medical leave that caused her to rebuild her clientele) that Lindgren would have performed at the Company's average level of sales, earning average stipulated (Exhibit A) commissions for a programmer.

It is noted that the average monthly commissions for the 23.6 months in question is $293, as opposed to the $243 suggested for Ms. Lindgren based on her performance prior to July 13, 1984.

Damages were not awarded to compensate Ms. Lindgren for never receiving her last paycheck. It is inappropriate to award the unpaid hourly wages (compensation for commissions were awarded) in the context of a Human Rights case. Ms. Lindgren's proper forum for that action is a wage and hours complaint under the jurisdiction of the Department of Labor and Industry. The same disposition applies to any commissions earned but not paid prior to Lindgren's going on medical leave in April of 1984. There is no showing that the commissions earned but not paid prior to her going on leave were denied because of discriminatory reasons. It is noted that commissions not paid after her return to work from medical leave were accounted for in the computation of damages herein. See Conclusion 12.

Interest is awarded pursuant to the recent Minnesota Court of Appeals' decision in Henry v. Metropolitan Waste Control Commission, 401 N.W.2d 401, 407 (Minn. App. 1987), which holds that for administrative proceedings, interest awarded is to be calculated in accordance with Minn. Stat. § 334.01. That statute mandates an interest rate of six percent.

R.C.L.

Service List

Stephen W. Cooper, Commissioner Daniel W. Blake

Department of Human Rights Certified Student Attorney

Fifth Floor Bremer Tower U of M Law School Civil Practice Clinic

Seventh Place & Minnesota Street 190 Law Center, 229-19th Avenue South

St. Paul, MN 55101 Minneapolis, MN 55455

Anna W. Shavers, Clinical Professor Arthur W. Owens

U of M Law School 6535 Peaceful Lane

190 Law Center, 229-19th Avenue S. Chanhassen, MN 553l7

Minneapolis, MN 55455

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

November 17, l988

Stephen W. Cooper, Commissioner

Department of Human Rights

Fifth Floor Bremer Tower

Seventh Place & Minnesota Street

St. Paul, MN 55101

Re: State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Class Action Case of Pamela Lindgren); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Commissioner Cooper:

Enclosed and served upon you by mail, please find Findings of Fact, Conclusions of Law and Orders of the Administrative Law Judge (Class Action - Pamela Lindgren) in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

RCL/lr Telephone: 612/341-7610

Enclosures

cc: Anna W. Shavers

Daniel W. Blake

Richard L. Varco, Jr.

Sports and Health Club, Inc.

Arthur Owens

Marc Crevier

Forest Larson

Administrative Law Judge Janice K. Frankman

Service List

Stephen W. Cooper, Commissioner Daniel W. Blake

Department of Human Rights Certified Student Attorney

Fifth Floor Bremer Tower U of M Law School Civil Practice Clinic

Seventh Place & Minnesota Street 190 Law Center, 229-19th Avenue South

St. Paul, MN 55101 Minneapolis, MN 55455

Anna W. Shavers, Clinical Professor Arthur W. Owens

U of M Law School 6535 Peaceful Lane

190 Law Center, 229-19th Avenue S. Chanhassen, MN 553l7

Minneapolis, MN 55455

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

January 27, 1989

Arthur W. Owens Marc Crevier

6535 Peaceful Lane 10965 Fieldcrest Road

Chanhassen, MN 55317 Eden Prairie, MN 55344

Sports and Health Club, Inc. Forest Larson

Arthur W. Owens, President 5005 Richmond Drive

6535 Peaceful Lane Edina, MN 55436

Chanhassen, MN 55317

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

Dear Parties and Counsel:

Please be advised that I have received no response from the Respondents to my August 2, 1988 letter requesting information regarding the closing of individual Sports and Health Clubs. I have since reviewed the record, including correspondence submitted by Special Assistant Attorney General Jean Boler in June 1988 and Class Action proceedings where the closing dates of specific club locations were discussed and/or briefed, and have decided upon the following closing dates for each Sports and Health Club facility:

LaSalle - February 1, 1985;

St. Louis Park - May 31, 1986;

Normandale, Apache, Midway, Northland Park, Tonka, St. Cloud -

October 31, 1986.

Parties and Counsel

Page Two

January 27, 1989

The above dates were selected, based upon all information available to me, as the dates on which the Respondents ceased management of the respective facilities. It is my intention that October 31, 1986 be the end of the period for calculating compensatory damages for any qualifying Class Members.

The record is clear that LaSalle and St. Louis Park were among the Respondents' "small" clubs. It is evident that the Respondents were "always looking for good people" and had no reservations about transferring personnel from club to club. Therefore, prospective or former employees of the LaSalle and St. Louis Park facilities who qualify for relief as Class Members will, where appropriate, be considered the same as persons similarly situated with respect to the other clubs -- eligible for compensatory damages as late as October 31, 1986. Judge Frankman and I intend to decide, on a case-by-case basis, whether it is appropriate to treat a "LaSalle" or St. Louis Park" person as one who would have remained in the Respondents' continued employ, as late as October 31, 1986, even after "their" club closed. Damages will be awarded accordingly.

The imposition of the above closing dates has no bearing on the appropriateness or calculation of punitive damages or damages for mental anguish and suffering.

The parties are allowed until Monday, February 6, 1989 (mailing date) to comment upon the determination expressed above. If there is no response, the determination will become final.

Thank you.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

Telephone: 612/341-7610

RCL:lr

cc: Helen Rubenstein

Nancy Triplett

Janice K. Frankman

February 9, 1989

Arthur W. Owens Marc Crevier

6535 Peaceful Lane 10965 Fieldcrest Road

Chanhassen, MN 55317 Eden Prairie, MN 55344

Sports and Health Club, Inc. Forest Larson

Arthur W. Owens, President 5005 Richmond Drive

6535 Peaceful Lane Edina, MN 55436

Chanhassen, MN 55317

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

Dear Parties and Counsel:

On January 27, 1989, I wrote to you and announced my determinations regarding closing dates for each Sports and Health Club facility. Persons were allowed until Monday, February 6, 1989 (mailing date) to comment on these determinations.

I have not received a response to my January 27 letter. As a result, I have determined that the parties have no further comment on this issue. Therefore, it is ORDERED that, for the purpose of Class Action proceedings in this matter, the closing dates for each Sports and Health Club facility are:

LaSalle - February 1, 1985;

St. Louis Park - May 31, 1986;

Normandale, Apache, Midway, Northland Park, Tonka, St. Cloud -

October 31, 1986.

Parties and Counsel

Page Two

February 9, 1989

This Order serves to close the record in the following Class Action cases:

Arthur Batsell, Lynn Bulena, Valerie Butkowski, Karen Fate, Linda Dunn Freeman, Victor Janowiec, Robert Johnson, Scott Kelm, Peter Kessler, Thomas Knutson, Marilyn Crosby Lovejoy, Patrick Murphy, Donna Norling, Bob Severin, Karen Spandl, Sandra Stein, Cathy Stevens, Lynn Zipperer.

Judge Frankman and myself will now take the cases of the above-listed potential Class Members under advisement and issue Findings of Fact, Conclusions of Law and Orders in each individual's case.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

Telephone: 612/341-7610

RCL:lr

cc: Helen Rubenstein

Nancy Triplett

Janice K. Frankman

Service List

Arthur W. Owens

6535 Peaceful Lane

Chanhassen, MN 553l7

Marc Crevier

Sports and Health Club, Inc. 10965 Fieldcrest Road

Arthur W. Owens, President Eden Prairie, MN 55344

6535 Peaceful Lane

Chanhassen, MN 55317 Forest Larson

5005 Richmond Drive

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota AMENDED FINDING OF

Department of Human Rights, and FACT AND CONCLUSION

his Predecessors, OF LAW (CLASS ACTION-

LINDA DUNN FREEMAN)

Complainant,

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

On March 10, 1989, the undersigned Administrative Law Judge issued Findings

of Fact, Conclusions of Law, and Order in the above-entitled matter. It has come to his attention subsequently that the March 10, 1989 document contained clerical errors with respect to the ending date for computation of damages and with respect to a damage figure. Accordingly, the Administrative Law Judge makes the following:

FINDING OF FACT

16. (AMENDED). Between November 9, 1985 and May 31, 1986 (the date the St. Cloud Sports and Health Club was sold by the Respondents), Linda Freeman was unemployed and earned no wage income. She received unemployment benefits during that period in the amount of $4080. Had she continued to be employed by Sports and Health Club between those dates, Ms. Freeman would have earned $7111 in wages and commissions (see Stipulated Exhibit A).

CONCLUSION OF LAW

10. (AMENDED). Ms. Freeman is entitled to compensatory damages of $3531 for damages of $3031 due to lost income ($7111 in wages and commissions less $4080 in unemployment benefits) and damages for mental anguish and suffering in the amount of $500.

Dated this day of March, 1989.

RICHARD C. LUIS

Administrative Law Judge

SUPPLEMENTARY MEMORANDUM

(Additional paragraph to the Memorandum issued accompanying Findings of Fact, Conclusions of Law and Order issued March 10, 1989). In computing compensatory damages for lost wages and income, the Administrative Law Judge used the stipulated figure of $800 per month from November 1985 through May 31,

1986 for a wage figure of $5600. To this, he added $1511 in commissions for a total of $7111. The commissions used were $292 per month for November 10 through December 31, 1985 and $203 per month from January 1 to May 31, 1986.

R.C.L.

-2-

March 17, 1989

Stephen W. Cooper, Commissioner

Department of Human Rights

Fifth Floor Bremer Tower

Seventh Place & Minnesota Street

St. Paul, MN 55101

Re: State of Minnesota, by Stephen W. Cooper, Commissioner, Minnesota Department of Human Rights, Complainant v. Sports and Health Club, Inc., Arthur W. Owens, Marc Crevier and Forest Larson, Respondents (Class Action Case of Linda Dunn Freeman); OAH Docket No. HR-82-005-RL, 7-1700-108-2.

Dear Commissioner Cooper:

Enclosed and served upon you by mail, please find the Amended Finding of Fact and Conclusion of Law in the above-entitled matter.

Very truly yours,

RICHARD C. LUIS

Administrative Law Judge

Telephone: 612/341-7610

RCL:lr

Enclosure

cc: Neal T. Buethe

Richard L. Varco, Jr.

Sports and Health Club, Inc.

Arthur Owens

Marc Crevier

Forest Larson

Administrative Law Judge Janice K. Frankman

Service List

Stephen W. Cooper, Commissioner Arthur W. Owens

Department of Human Rights 6535 Peaceful Lane

Fifth Floor Bremer Tower Chanhassen, MN 55317

Seventh Place & Minnesota Street

St. Paul, MN 55101 Marc Crevier

10965 Fieldcrest Road

Sports and Health Club, Inc. Eden Prairie, MN 55344

Arthur W. Owens, President

6535 Peaceful Lane Forest Larson

Chanhassen, MN 55317 5005 Richmond Drive

Edina, MN 55436

Richard L. Varco, Jr.

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota St.

St. Paul, MN 55101

Neal T. Buethe

Briggs and Morgan

2200 First National Bank Building

St. Paul, MN 55101

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW

AND ORDER (DAMAGES -

Complainant, STEVEN C. BRUHJELL)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter was submitted on Affidavit pursuant to the Order of the Administrative Law Judge issued on February 24, 1987. The record in this matter closed on May 10, 1989.

The Complainant is represented by Richard A. Varco, Jr., Assistant Attorney

General, 1100 Bremer Tower, Seventh Place and Minnesota Streets, St. Paul, Minnesota 55101. Respondent Sports and Health Club, Inc. is represented by Arthur W. Owens, President, 6535 Peaceful Lane, Chanhassen, Minnesota 553l7.

Individual Respondents Arthur W. Owens, 6535 Peaceful Lane, Chanhassen, Minnesota 55317, Marc A. Crevier, 10965 Fieldcrest Road, Eden Prairie, Minnesota 55344, and Forest M. Larson, 5005 Richmond Drive, Edina, Minnesota 55436, all represent themselves in this proceeding.

NOTICE

STATEMENT OF ISSUE

What is the appropriate level of compensatory and punitive damages, if any, to be awarded to Steven C. Bruhjell, a Charging Party in the underlying liability hearing in this matter?

Based upon all of the proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. On April 26, 1984, the Administrative Law Judge issued Findings of Fact, Conclusions of Law and Orders in this matter. The Respondents were
ordered to pay compensatory damages to eight Charging Parties, including Steven Bruhjell, the level of such damages to be determined in a subsequent proceeding.

2. The Administrative Law Judge's Orders were affirmed by the Minnesota Supreme Court on May 17, 1985. State, by McClure, et al., v. Sports and Health Club, Inc., et al., 370 N.W.2d 844 (Minn. 1985). On July 6, 1986, the Respondents' appeal from the ruling of the Minnesota Supreme Court was "dismissed for want of jurisdiction" by the United States Supreme Court. 106 S. Ct. 3315, 478 U.S. 1015 (1986).

3. On February 24, 1987, the Administrative Law Judge issued an Order granting the Complainant's Motion to file Affidavits in lieu of testimony containing income and employment information for certain Charging Parties in the underlying liability case whose entitlement to damages had been affirmed by the Minnesota Supreme Court and whose current residence made it inconvenient

and costly to return to Minnesota for a damages hearing. Steven Bruhjell, who lives in Hawaii, is one such Charging Party.

4. The February 24, 1987 Order provided that, absent a showing of fraud, the information in the Affidavits of the Charging Parties would be admitted as evidence in this proceeding.

5. On September 14, 1988, the Complainant filed the Affidavit of Steven C. Bruhjell, with attachments, in compliance with the Judge's Order of February 24, 1987. Since that time, the Respondents have made no reply, nor have they sought to discover further information regarding the circumstances of the Charging Party.

6. On April 26, 1989, the Administrative Law Judge issued a Letter/Order requiring the Respondents to reply to the allegations contained in the Affidavits of the Charging Parties by Friday, May 5, 1989 (mailing date). No response was filed by the Respondents.

7. Steven (Steve) Bruhjell was employed as an Associate Membership Director for the Respondents from June 18, 1973 through December 18, 1976. Throughout his period of employment, he ranked near the top of the company in new membership sales. He was qualified for promotion to a management position and was considered for promotion several times.

8. In April 1975, Steve Bruhjell was not promoted to the position of Assistant Manager (a position for which he was considered) in the Respondents' organization because of religion. Forest Larson, one of the Respondents and a person who shared the religious beliefs of Sports and Health's owner and president, Arthur W. Owens, received the promotion. Bruhjell and Larson began their employment with the Respondents at the same time.

9. In late November or December of 1976, Steve Bruhjell decided to speak directly to Arthur Owens in an effort to find out if it was true that the only reason he had not been promoted to management was because of his religious beliefs. Owens admitted to him that his (Bruhjell's) religious beliefs were the only reason he had not been promoted. Shortly thereafter, Bruhjell resigned his employment because he felt he had no future in the Respondents' organization.

10. Forest Larson was promoted to a Club Manager's position at Sports and Health in January 1977.

11. Steve Bruhjell would have been promoted to an Assistant Manager's position at Sports and Health in April 1975, and to Manager in January 1977, but was not so promoted because he did not share the religious beliefs of the Respondents. As an Assistant Manager between April 1975 and December 31, 1976, Bruhjell would have earned $14,847. As Manager of the Normandale Sports and Health Club, or in an equivalent position from January 1, 1977 to July 31, 1978, he would have earned $32,143.

12. In January 1977, Bruhjell relocated to Kona, Hawaii, where he and a partner started operating a fitness-oriented business that offered nutritional counseling and fitness programming. This business failed after six months, due to lack of profit.

13. From July 1977 to July 1978, Bruhjell co-managed a health food restaurant in Kona, Hawaii.

14. For the period between January 1977 and July 1978, Bruhjell's earnings were minimal, amounting to approximately $2,500.

15. Between July 1978 and January 1979, the Charging Party was unemployed and not actively seeking employment.

16. In January 1979, Mr. Bruhjell moved to the island of Molokai, Hawaii, where he currently resides. Because of extremely limited employment opportunities on Molokai, Bruhjell has subsisted on a barter system, growing his own food, constructing his own shelter and furniture, and trading goods and services for necessities. He spends an average of one day each week providing chiropractic, nutritional counseling, exercise programming and other health-oriented services to a number of the approximately 5,000 residents of the island. There are no health club facilities on the island of Molokai. Bruhjell also does woodworking for island residents, cuts wood and grows bananas. His earnings for the above-noted services, both in cash and in kind, are approximately $350 per month.

17. Between April 1975 and July 1978, Steve Bruhjell's gross income was $19,536.

18. Had Steve Bruhjell not been discriminated against by the Respondents with respect to the terms and conditions of his employment, his income for the period of April 1975 to July 1978 would have been $46,990.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly designated as Conclusions of Law are hereby adopted as such.

2. All relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action Ordered pursuant to Minn. Stat. §§ 14.50 and 363.071, subd. 2 (1988).

4. The Respondents, having filed no reply to the Affidavit of Steven C. Bruhjell, filed herein by the Complainant, and having made no attempt to discover relevant income and employment information on the Charging Party or to otherwise participate in this matter, are in default in this portion of the proceeding.

5. Steven C. Bruhjell is entitled to compensatory damages in the amount of $27,454, the difference between his income from April 1, 1975 through July 31, 1978 ($19,536) and the amount he would have earned as an Assistant Manager at Sports and Health between April 1, 1975 and December 31, 1976 ($14,847) and as a Club Manager at Sports and Health between January 1, 1977 and July 31, 1978 ($32,143).

6. Steven C. Bruhjell is not entitled to damages for the period between July 31, 1978 and January 1, 1979 because he was not actively seeking employment during that period of time.

7. Steven C. Bruhjell is not entitled to damages for any period after January 1, 1979 because, in voluntarily moving to the island of Molokai, where there are no health clubs and employment opportunities are extremely limited, he failed to exercise reasonable diligence in obtaining employment similar or substantially equivalent to his employment at Sports and Health Club.

8. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure v. Sports and Health Club, et al., HR-82-005-RL at p. 71.

9. In accordance with the Minnesota Supreme Court decision herein, the Respondents are jointly and severally liable for all damages ordered herein. State, by McClure v. Sports and Health Club, 370 N.W.2d 844, 853-54 (Minn. 1985).

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents pay to Steven C. Bruhjell $27,454 in compensatory damages, plus interest on the compensatory damages since July 31, 1978, pursuant to Minn. Stat. § 334.01.

Dated this day of May, 1989.

RICHARD C. LUIS

Administrative Law Judge

Reported: Submitted on Affidavit.

MEMORANDUM

The Complainant seeks damages for the Charging Party of $187,209. That figure assumes that Steve Bruhjell is entitled to damages for the entire period from April 1975 until the closing of the Normandale Sports and Health Club on October 31, 1986, based on the difference between what he would have earned in the Respondents' employ and his actual income for that 11-1/2 year period. See Exhibits 4, 5.

The Administrative Law Judge has decided that, for periods after July 31, 1978, Mr. Bruhjell is not entitled to accumulate damages. The question is straightforward for the period from July 31, 1978 to January 1, 1979. The Charging Party's Affidavit admits he sought no employment during that period of time. It is well-settled law in Minnesota that an employer is entitled to a reduction in the amount of compensable wage loss if the evidence establishes that the former employee made no reasonable effort to seek or accept similar employment. Johnson v. Village of Cohassett, 263 Minn. 425, 437, 116 N.W.2d 692, 700 (1962); Soules v. Independent School District No. 518, 258 N.W.2d 103, 105 (Minn. 1977). For any period of time Mr. Bruhjell sought no employment at all, the Respondents are not liable for compensatory damages.

The more difficult issue is treatment of the period after January 1, 1979, when Mr. Bruhjell moved to the island of Molokai and became self-employed as a subsistence farmer, artisan, logger and, for one day a week, provider of "chiropractic, nutritional counseling, exercise programming and other health-

oriented services". The Administrative Law Judge concludes that for an award of compensatory damages based on lost wages to be appropriate, the damaged individual must attempt to mitigate his damages by seeking equivalent employment. The case law affirms that view. The general principle behind awarding back pay for damages in employment discrimination cases is to assure that persons aggrieved are "so far as possible, restored to a position where they would have been were it not for the unlawful discrimination." Franks v. Bowman Transportation Company, 424 U.S. 747, 764 (1976). As a broad proposition, injured parties are expected to mitigate the damages they suffer. Back pay should not be awarded when the evidence shows a willful loss of earnings. Phelps-Dodge v. NLRB, 313 U.S. 177, 198 (1941). Working from that benchmark, cases decided under Title VII of the Federal Civil Rights Act have defined failure to remain in the labor market or failure diligently to search for alternative work as examples of such willful conduct. NLRB v. Mastro Plastics Corp., 354 F.2d 170, 174 n. 3 (2d Cir. 1965), cert. denied, 384 U.S. 972 (1966); Sangster v. United Airlines, 24 FEP Cases 845 (9th Cir. 1980).

The Administrative Law Judge is mindful of the fact that an employee who has been separated from employment wrongfully is generally not required to seek employment outside his/her area of residence. Reliance on that principle would ignore the fact that Bruhjell was in an area where employment equivalent to what he did at Sports and Health was available, the Kona Coast of the island of Hawaii, from which he voluntarily moved to a sparsely-

inhabited island with no health club and a subsistence-level economy. It is noted that Mr. Bruhjell is able to subsist on Molokai earning $350 per month, in cash and in kind. This fact suggests that residents of Molokai have minimal funds to spend on fitness and leisure. Such a society, one to which the Charging Party voluntarily relocated himself, is not large (5,000 people) or affluent enough to provide a base for employment in the health-club or
fitness area. In effect, Steven Bruhjell removed himself from the labor market and voluntarily stopped searching for work equivalent to what he would have had at Sports and Health by relocating to Molokai. He should not be compensated in damages for any period of time after which he made such a move.

R.C.L.

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and ORDER DENYING MOTION

his Predecessors, FOR RECONSIDERATION

(CLASS ACTION - JUDY KENT)

Complainant,

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

WHEREAS, Findings of Fact, Conclusions of Law and an Order were issued in the above-captioned matter on May 17, 1988 regarding Judy Kent; and

WHEREAS, on May 20, 1988, the Respondents filed a Motion for Reconsideration of the Administrative Law Judge's Findings of Fact, Conclusions

of Law and Order regarding Judy Kent; and

WHEREAS, on June 10, 1988, the Respondents filed a Memorandum in Support of their Motion for Reconsideration regarding Judy Kent, which Memorandum alleges that since counsel for the Complainant only requested punitive damages of $1,000 for Ms. Kent, the Administrative Law Judge had acted improperly and outside his authority in awarding punitive damages in excess of the amount requested; and

WHEREAS, on June 16, 1988, counsel for the Complainant, James A. Barnum, Leonard, Street & Deinard, Attorneys at Law, 150 South Fifth Street, Suite 2300, Minneapolis, Minnesota 55402, filed a Memorandum in Opposition to Respondents' Motion for Reconsideration, asserting that the amount of punitive damages awarded was proper and appropriate because counsel had requested $1,000 in punitive damages on the erroneous assumption that $1,000 was the maximum punitive damage award available in the case; and

WHEREAS, the Administrative Law Judge subsequently granted a period of time, through August 3, 1989, for the filing by the parties of any further arguments in connection with the Respondents' Motion; and

WHEREAS, counsel for the Complainant filed a final response on August 1, 1989 and no response was received from the Respondents; and

WHEREAS, the award of punitive damages in the amount of $1,500 to Judy Kent is appropriate;

NOW, THEREFORE, IT IS HEREBY ORDERED that the Motion of the Respondents for Reconsideration of the punitive damages award to Judy Kent is DENIED.

Dated this day of August, 1989.

RICHARD C. LUIS

Administrative Law Judge

NOTICE

Pursuant to Minn. Stat. § 14.64, time for appeal of this matter has been stayed pending disposition of the Respondents' Motion for Reconsideration. Pursuant to Minn. Stat. § 363.072, the Respondents or the Commissioner of the Department of Human Rights may seek judicial review pursuant to Minn. Stat. §§ 14.63 - 14.69. The 30-day appeal period provided in Minn. Stat. § 14.63 begins to run upon service of this Order.

MEMORANDUM

The only issue raised for reconsideration is whether it was appropriate for the Administrative Law Judge to award an amount of punitive damages in excess of the amount requested by counsel for the Complainant.

The Minnesota Human Rights Act, at Minn. Stat. § 363.071, subd. 2 authorizes an award of punitive damages. At the time of the illegal discrimination against Ms. Kent (June 1984), the maximum amount of punitive damages authorized for violations of the Act was $6,000. That maximum punitive damages level had been effective since August 1, 1981. In his brief of April 12, 1988, counsel asked for the maximum punitive damages available for Ms. Kent because of the Respondents' "total disregard and willful indifference to the legal rights of Ms. Kent, and Respondents' contemptuous disregard of Judge Luis's April 24, 1984 Order . . . in order to carry out the intent of the Human Rights Act." It is obvious from that argument, and counsel so admitted in his subsequent Memorandum, that more than $1,000 in punitive damages would have been sought had counsel known that more was available under the applicable statute.

The Respondents have not argued that the Administrative Law Judge had no authority to award punitive damages in this case or that an award of $1,500 is excessive under Minn. Stat. § 549.20, which mandates measurement of punitive damages awards by the factors that justly bear on the purposes of punitive damages, as specified at pp. 8-9 in the Memorandum following the Judge's Order of May 17, 1989. They argue that the amount awarded should be limited to $1,000, the amount requested. They do not dispute the fact that the Human Rights Act allowed punitive damages to be awarded up to an amount of $6,000, not $1,000 when Judy Kent applied for employment with them. The sole basis of the Respondents' Motion is that the Administrative Law Judge is limited in awarding damages by the amount requested by the Complainant and had no power to award more.

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The Judge is unable to accept the Respondents' argument because he concludes that, in awarding punitive damages, he is entitled to award any appropriate amount authorized by law without being "locked in" by the pleadings or other arguments advanced by counsel for the Complainant. Rule 54.03 of the Minnesota Rules of Civil Procedure reads:

A judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment. Except as to a party against whom a judgment is entered by default, every other judgment shall grant the relief to which the party in whose favor it is rendered is entitled.

This case was not a default matter. The Respondents appeared and defended themselves at the hearing. In such a case it is appropriate, under Rule 54.03,

that the Complainant not be limited to a recovery of the amount requested by counsel. The award should be at a level to which Ms. Kent was properly entitled. In Stephenson v. F. W. Woolworth Company, 152 N.W.2d 138 (1967), a case decided under Rule 54.03, the Minnesota Supreme Court stated:

Under our liberalized rules of pleading, ordinarily plaintiff is not limited to the recovery of the amount prayed for in the complaint . . . . ordinarily the court may grant full relief . . . even if it goes beyond the prayer for relief . . . .

152 N.W.2d at 143 and 145.

Nothing in this case takes it out of the "ordinary". Counsel simply requested what he thought was the maximum punitive damages available. His error does not bar the Administrative Law Judge from awarding an appropriate, authorized level of damages greater than that requested. See also, Schwartz v. Schneuriger, 69 N.W.2d 756 (Wis. 1955) and Gibeault v. City of Highland Park, 212 N.W.2d 818 (Mich. 1973).

R.C.L.

-3-

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW AND ORDER

(DAMAGES - BEVERLY MATHA (LARSEN))

Complainant,

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter was submitted on Affidavit pursuant to the Order of the Administrative Law Judge issued on February 24, 1987. The record in this matter closed on May 10, 1989.

The Complainant is represented by Richard A. Varco, Jr., Assistant Attorney

NOTICE

STATEMENT OF ISSUE

What is the appropriate level of compensatory and punitive damages, if any, to be awarded to Beverly Matha (Larsen), a Charging Party in the underlying liability hearing in this matter?

Based upon all of the proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. On April 26, 1984, the Administrative Law Judge issued Findings of Fact, Conclusions of Law and Orders in this matter. The Respondents were ordered to pay compensatory damages to eight Charging Parties, including Beverly Matha (Larsen), the level of such damages to be determined in a subsequent proceeding.

and costly to return to Minnesota for a damages hearing. Beverly Matha (Larsen), who lives in Colorado, is one such Charging Party.

4. The February 24, 1987 Order provided that, absent a showing of fraud, the information in the Affidavits of the Charging Parties would be admitted as evidence in this proceeding.

5. On September 14, 1988, the Complainant filed the Affidavit of Beverly Matha (Larsen), with attachments, in compliance with the Judge's Order of February 24, 1987. Since that time, the Respondents have made no reply, nor have they sought to discover further information regarding the circumstances of the Charging Party.

7. Beverly Larsen Matha was employed by Sports and Health Club, Inc. as an Associate Membership Director from July 1976 to October 4, 1977.

8. During her employment with Sports and Health, the Charging Party was one of the top salespersons for all six Sports and Health locations. On at least one occasion she sold more memberships than any other salesperson during a six-month period.

9. On October 3, 1977, Marc Crevier, Vice-President of Sports and Health, asked Matha if she was interested in a management position. She indicated that she was but that she did not want to participate in the required Bible studies. She was terminated the following day.

10. But for the Respondents' discriminatory conduct, Beverly Matha would have been promoted to an Assistant Manager's position at Sports and Health in October of 1977, and to a Club Manager's position by October 1, 1979.

11. Following her termination, the Charging Party attempted to find work, but was only able to locate temporary or part-time work through personal referrals. It was very difficult for her to obtain employment because of negative references given by Sports and Health.

12. The Complainant seeks compensatory damages for Beverly Matha for the period between January 1, 1978 and the end of September 1981, when she moved to Colorado. But for the Respondents' discriminatory conduct against her, discriminating against her with respect to the terms and conditions of her employment because of religion and discharging her because of religion, Matha would have earned approximately $67,718 at Sports and Health Club. She would have earned $19,738 in employment as an Assistant Manager between October 5, 1977 and September 30, 1979 and $47,980 as a Club Manager between October 1, 1979 and September 30, 1981.

13. During the late 1970s and early 1980s, the usual promotion pattern for Associate Membership Directors promoted to management positions at Sports and Health Club was to be promoted first to an Assistant Manager's position. It was normal to serve satisfactorily, or with distinction at least one or two years as an Assistant Manager, or as the Manager of one of the Respondents' smaller clubs before being promoted to manage a larger facility such as the Normandale Sports and Health Club. The figures at Finding 12 assume that Beverly Matha would have been promoted to an Assistant Manager's position for approximately two years, until September 30, 1979, at which time she would have qualified for the Manager's position at the Normandale Sports and Health Club, or for an equivalent position.

14. Beverly Matha's actual earnings for October 1977 through September 1981 were $13,240.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly designated as Conclusions of Law are hereby adopted as such.

2. All relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action ordered pursuant to Minn. Stat. § § 14.50 and 363.071, subd. 2 (1988).

4. The Respondents, having filed no reply to the Affidavit of Beverly Matha (Larsen), filed herein by the Complainant, and having made no attempt to discover relevant income and employment information on the Charging Party or to otherwise participate in this matter, are in default for this portion of the proceeding.

5. Beverly Matha is entitled to compensatory damages in the amount of $54,478, the difference between her income from October 5, 1977 to September 30, 1981 ($13,240) and the amount she would have earned as an Assistant Manager at Sports and Health Club between October 5, 1977 and
September 30, 1979 ($19,738) and as a Club Manager at Sports and Health between October 1, 1979 and September 30, 1981 ($47,980).

6. It is appropriate to reduce the Charging Party's and Complainant's proposed compensatory damages award of $77,401 because the proposed award assumes the Charging Party would have been promoted to the position of Normandale Sports and Health Club Manager, or an equivalent position, on October 5, 1977. It is inappropriate to make that assumption for any period before October 1, 1979.

7. The Charging Party moved to Colorado after September 30, 1981, and no damages are sought for periods of time after that date in the text of her Affidavit, so it is appropriate to terminate the accumulation of compensatory damages on that date.

8. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure v. Sports and Health Club, et al., HR-82-005-RL at p. 71.

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents pay to Beverly Matha (Larsen) $54,478 in compensatory damages, plus interest on the compensatory damages since September 30, 1981, pursuant to Minn. Stat. § 334.01.

Dated this day of May, 1989.

RICHARD C. LUIS

Administrative Law Judge

Reported: Submitted on Affidavit.

MEMORANDUM

In computing appropriate damages for this Charging Party, the Administrative Law Judge notes first that Exhibit 3, attached to her Affidavit, contains an error in arithmetic. The total compensation for managing the Normandale Sports and Health Club between 1978 and 1981 was $90,641, not $80,641. The damages requested are therefore $10,000 greater ($77,401) than noted on Exhibit 3 and in paragraph 10 of the Affidavit. The damages requested are reduced by the difference between an Assistant Manager's compensation ($19,738) and the compensation of the Normandale Manager ($42,661) for the period from October 5, 1977 to September 30, 1978.

In finding it reasonable to assume that the Charging Party would not have been promoted to Club Manager as early as assumed in her Affidavit, the Administrative Law Judge has relied on the record of the Sports and Health Club case as a whole, and has knowledge that persons promoted to management positions do not advance as swiftly as assumed by the Complainant. Forest Larson, one of the Respondents in this case, was an Assistant Manager for 21 months before moving up to a Club Manager's position (see Affidavit of Steven C. Bruhjell). Another Charging Party, Steve Bruhjell, requested that his damages be computed on the assumption that his career path at Sports and Health would have been comparable to Forest Larson's, but for religious discrimination, which approach was accepted by the Administrative Law Judge in a companion matter issued today. The assumed scenario for Bruhjell was that he would not have advanced to Club managership at Sports and Health for nearly two years, and that he would have managed the Normandale Club, or had an equivalent position, through July of 1978. In order to be consistent with the record as a whole, it is concluded that the damages awarded to Beverly Matha must be less than requested in her Affidavit. The calculations noted above reflect that reasoning.

R.C.L.

HR-82-005-RL

7-1700-108-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Minnesota

Department of Human Rights, and FINDINGS OF FACT,

his Predecessors, CONCLUSIONS OF LAW AND ORDER

(DAMAGES - MISTINGUETT, f/k/a

Complainant, ROBIN CARNAHAN)

Sports and Health Club, Inc.,

Arthur W. Owens, Marc Crevier

and Forest Larson,

Respondents.

The above entitled matter was submitted on Affidavit pursuant to the Order of the Administrative Law Judge issued on February 24, 1987. The record in this matter closed on May 10, 1989.

The Complainant is represented by Richard A. Varco, Jr., Assistant Attorney

NOTICE

STATEMENT OF ISSUE

What is the appropriate level of compensatory and punitive damages, if any, to be awarded to Mistinguett, a Charging Party in the underlying liability hearing in this matter?

Based upon all of the proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. On April 26, 1984, the Administrative Law Judge issued Findings of Fact, Conclusions of Law and Orders in this matter. The Respondents were ordered to pay compensatory damages to eight Charging Parties, including Mistinguett, the level of such damages to be determined in a subsequent proceeding.

and costly to return to Minnesota for a damages hearing. Mistinguett, who lives in Pennsylvania, is one such Charging Party.

4. The February 24, 1987 Order provided that, absent a showing of fraud, the information in the Affidavits of the Charging Parties would be admitted as evidence in this proceeding.

5. On September 14, 1988, the Complainant filed the Affidavit of Mistinguett, with attachments, in compliance with the Judge's Order of February 24, 1987. Since that time, the Respondents have made no reply, nor have they sought to discover further information regarding the circumstances of the Charging Party.

7. The Charging Party's legal name was Robin Ann Carnahan when she was employed at Sports and Health Club and until June 1, 1987. On that date, her name was changed legally to Mistinguett.

8. Mistinguett was employed by Sports and Health Club, Inc. at the Normandale location as an Associate Membership Director from June 19, 1977 to May 30, 1978.

9. The Charging Party's duties as an Associate Membership Director included the sale of Club memberships, and developing exercise and diet programs for Club members. She took on the additional responsibilities of developing a dance studio, a fitness festival, a "Super Stars" competition and an arm wrestling contest at the Normandale Club. She also worked overtime doing graphics work at the Normandale Club.

10. Mistinguett received positive performance evaluations from Marc Crevier and Forest Larson, Respondents in this matter and her supervisors at
the Normandale Club. Crevier and Larson told her that they were considering her for a management position.

11. On May 30, 1978, Respondent Crevier terminated Mistinguett's employment with Sports and Health after she expressed to him disapproval of certain religious-based business practices of the Club. Part of her discussion with Crevier included Mistinguett's asking him whether, if she should be promoted to management, she could attend only the business-oriented portions of management meetings and not the companion Bible studies.

12. But for the Respondent's discriminatory conduct, Mistinguett would have been promoted to an Assistant Manager's position at Sports and Health, and served in that position until September 30, 1980, a period of 27 months after June 1, 1978. As an Assistant Manager for that period, Mistinguett would have earned a total of $23,671. Had the Charging Party not been discriminated against by the Respondents with respect to the terms and conditions of her employment because of religion, and by being discharged because of religion, she would have been promoted to a Club Manager's position at the Normandale Sports and Health Club, or to an equivalent position, on October 1, 1980. Between October 1, 1980 and September 30, 1984, after which time Mistinguett's earnings surpassed her estimated earnings at Sports and Health Club, her income as a Club Manager, absent the discriminatory action taken against her, would have totaled $108,061.

13. Mistinguett's actual earnings between June 1, 1978 and September 30, 1984 were $60,374. She was employed during that time as a graphic artist and, after 1981, as a professional dancer and choreographer. At no time between June 1, 1978 and September 30, 1984 were her earnings greater than they would have been as an Assistant Manager/Manager at Sports and Health Club during the periods specified in the preceding Finding.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. Any of the preceding Findings of Fact more properly designated as Conclusions of Law are hereby adopted as such.

2. All relevant substantive and procedural requirements of law and rule have been fulfilled.

3. The Administrative Law Judge has jurisdiction herein and authority to take the action ordered pursuant to Minn. Stat. § § 14.50 and 363.071, subd. 2 (1988).

4. The Respondents, having filed no reply to the Affidavit of Mistinguett, filed herein by the Complainant, and having made no attempt to discover relevant income and employment information on the Charging Party or to otherwise participate in this matter, are in default in this portion of the proceeding.

5. Mistinguett is entitled to compensatory damages in the amount of $71,358, the difference between her income from June 1, 1978 to September 30,
1984 ($60,374) and the amount she would have earned as an Assistant Manager at Sports and Health Club between June 1, 1978 and September 30, 1980 ($23,671) and as a Club Manager at Sports and Health between October 1, 1980 and September 30, 1984 ($108,061).

6. It is appropriate to reduce the Charging Party's and Complainant's proposed compensatory damages award of $101,399 because the proposed award assumes the Charging Party would have been promoted to the position of Normandale Sports and Health Club Manager, or an equivalent position, on June 1, 1978. It is inappropriate to make that assumption before October 1, 1980.

7. No punitive damages are awarded in this matter in accordance with the decision reached in this case on April 26, 1984. State, by McClure v. Sports and Health Club, et al., HR-82-005-RL at p. 71.

8. In accordance with the Minnesota Supreme Court decision herein, the Respondents are jointly and severally liable for all damages ordered herein. State, by McClure v. Sports and Health Club, 370 N.W.2d 844, 853-54 (Minn. 1985).

Based upon the foregoing Conclusions of Law, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED that the Respondents pay to Mistinguett (f/k/a Robin Carnahan) $71,358 in compensatory damages, plus interest on the compensatory damages since September 30, 1984, pursuant to Minn. Stat. § 334.01.

Dated this day of May, 1989.

RICHARD C. LUIS

Administrative Law Judge

Reported: Submitted on Affidavit.

MEMORANDUM

In calculating the compensatory damages award, the Administrative Law Judge reduced the proposed award of $101,399 by the difference between the amount earned by the Normandale Sports and Health Club Manager between June 1, 1978 and September 30, 1980 ($53,712) and the amount earned by an average Assistant Manager for the Respondents during the same period ($23,671), for a total reduction in the amount awarded of $30,041.

In finding it reasonable to assume that the Charging Party would not have been promoted to Club Manager as early as assumed in her Affidavit, the Administrative Law Judge has relied on the record of the Sports and Health Club case as a whole, and his knowledge that persons promoted to management positions do not advance as swiftly as the progress assumed by the
Complainant. Forest Larson, one of the Respondents in this case, was an Assistant Manager for 21 months before moving up to a Club Manager's position (see Affidavit of Steven C. Bruhjell). Another Charging Party, Steve Bruhjell, requested that his damages be computed on the assumption that his career path at Sports and Health would have been comparable to Forest Larson's, but for religious discrimination, which approach was accepted by the Administrative Law Judge in a companion matter issued today. The assumed scenario for Bruhjell was that he would not have advanced to Club managership at Sports and Health for nearly two years, and that he would have managed the Normandale Club, or had an equivalent position, through July of 1978. In another companion matter, also issued today, the Administrative Law Judge assumed that Beverly Matha (Larsen) would have received a promotion to manager of the Normandale Sports and Health Club, or an equivalent position, on October 1, 1979, and would have held such a position until September 30, 1981. It is noted that Matha (Larsen) had approximately one year's seniority over Mistinguett in the Respondents' organization. In order to be consistent with the record as a whole, it is concluded that the damages awarded to Mistinguett must be less than requested in her Affidavit. The calculations noted above reflect that reasoning.

R.C.L.