HR -88-008 -AK

6 1700-1885-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE DEPARTMENT OF HUMAN RIGHTS

State of Minnesota, by Stephen W.

Cooper, Commissioner, Department

of Human Rights, ORDER DENYING

SUMMARY JUDGMENT

Complainant,

Cleveland Gear Company,

Respondent.

On January 21, 1988, Respondent filed a Motion for Summary Judgment in

this proceeding. On February 5, 1988, the Department filed Memorandum in

opposition to the Motion.

On February 10, 1988, a hearing was held on the Motion. Appearing on

behalf of the Complainant, Department of Human Rights, was Carl M. Warren,

Special Assistant Attorney General, 1100 Bremer Tower, Seventh Place and

Minnesota Street, St. Paul, Minnesota 55101. Appearing on behalf of the

Respondent, Cleveland Gear Company, was Mark B. Rotenberg, Dorsey & Whitney,

Attorneys at Law, 2200 First Bank Place East, Minneapolis, Minnesota 55402.

Supplemental memoranda were filed, and the record closed on March 21.

Based upon all the filings , the oral argument , and for the reasons set out

in the Memorandum which follows:

IT IS HEREBY ORDERED that the portion of Respondent' s Motion for Summary

Judgment that would require collateral estoppel is DENIED.

Dated this 14th day of April, 1988.

ALLAN W. KLEIN

Administrative Law Judge

MEMORANDUM

The primary portion of Respondent's Motion for Summary Judgment turns on

the question of whether or not findings from an unemployment compensation

hearing before the Department of Jobs and Training may be used to collaterally

estop Complainant from asserting that Respondent unlawfully discriminated

against the Complaining Witness on the basis of sex. If estoppel is

appropriate, then summary judgment might be appropriate. But without

estoppel, there can be no summary judgment because there would be numerous

factual issues in dispute. There is a second part of the motion that deals

with the doctrine of "comparable worth". That part of the motion is not

decided at this time. See Part 11 hereof.

Collateral estoppel, or "issue preclusion", is traditionally applied when

a question of fact or law resolved in a prior litigation is raised in a

subsequent proceeding based upon a different cause of action. Under the

doctrine, the judgment in the prior forum precludes a relitigation of the

issues necessary to the outcome of the first action. Issue preclusion

minimizes inconsistent determinations of factual issues among different

forums, and promotes judicial economy. The doctrine is customarily considered

in terms of fundamental notions of justice and fairness. See_generally,

"Getting a Full Bite of the Apple: When Should the Doctrine of Issue

Preclusion Make an Administrative or Arbitral Determination Binding in a Court

of Law?", LV Fordam Law Review, 63 (1986).

In the case of Ellis v. Minneapolis Commission on Civil Rights, 319 N.W.2d

702 (Minn. 1982), the Minnesota Supreme Court set forth four tests to

determine when collateral estoppel is appropriate. They are:

(1) The issue was identical to one in a prior acjudication;

(2) There was a final judgment on the merits;

(3) The estopped party was a party or in privity with a party

to the prior adjudication; and,

(4) The estopped party was given a full and fair opportunity to

be heard on the adjudicated issue.

The crucial tests in this particular case are numbers (1) and (4). There is

no serious disagreement about tests (2) and (3) -- they are both met. A brief

recitation of the facts will be set forth below in order to evaluate whether

tests (1) and (4) have been met.

Cora Williams, the Complaining Witness in this matter, was employed by

Respondent Cleveland Gear Company from August of 1975 to Parch of 1985. She

originally was a secretary to the president, then became a "personnel

technician", and then a "personnel administrator". For much of the time at

issue, the personnel department consisted of two people -- the personnel

manager and Williams. In 1984, the personnel manager was terminated, and the

Complaining Witness assumed the responsibilities of the department. She

served alone in the department for a few months, until she was given a half-

time assistant for clerical work. Throughout the period of time that she

worked for Respondent, including the time that she was the only person in the

department, she was paid substantially less than the former personnel manager

was paid. However, there were substantial differences in background,

education, and experience.

On February 26, 1985, Williams filed an intake questionnaire with the

Department of Human Rights, alleging that Respondent was paying her in a

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discriminatory Manner because of sex. On February 28, 1985, she gave

Respondent notice of her intention to quit her job. Her last day Of work was

March 13, 1985.

On March 10, 1985, she filed a claim with the Minnesota Department of Jobs

and Training for unemployment benefits. She stated that although her

termination was voluntary, it was for good Cause attributable to the Employer

because of the sex discrimination in pay. Respondent opposed William's Claim,

and on or about March 27, 1985, it was denied . on or about March 30, 1985,

Williams appealed the denial.

The appeal was heard before a Referee on April 25 and May 31, 1985.

Williams appeared pro I in that proceeding, while the Respondent was

represented by an attorney. Williams testified, as did two witnesses for

Cleveland Gear. On July 11, 1985, the Referee issued a six-page decision,

concluding that Williams voluntarily discontinued employment without good

cause attributable to the Employer. It is evident from the Referee's decision

that Williams alleged that Cleveland WaS unfair in its treatment of her

because of her sex. The Referee noted the following:

. . . The Claimant is quite possibly correct that in

management's dealings with her, there was a strong element

of sexism at work. An unemployment insurance hearing is a

forum for the resolution of sex discrimination issues only

to the extent that any sex discrimination constitutes good

Cause attributable to the employer for quitting. The

issues are not congruent. Here the referee concludes that

where the claimant received an actual increase in pay for

virtually the same number of hours worked she did not have

good cause to quit even if she suffered some discrimination.

The claimant may wish to pursue her remedy in another forum.

Williams appealed the Referee's decision to the Commissioner's

representative. On November 1, 1985, the representative affirmed the

Referee's decision. In doing so, however, review proceedings were conducted

on October 15, 1985, wherein Williams appeared both in person and by an

attorney. Cleveland was again represented by an attorney. In his decision on

the appeal, the Commissioner's representative noted that material sex

discrimination would constitute good cause attributable to the employer in the

event of a voluntary quit, but that the burden of proof was on the Claimant to

show that the disparity in pay was based on sex, and that she had not made an

adequate showing. The Referee noted that Williams had argued that "the

company must prove that the difference in sex provided no part for the basis

for the wage differential" between her and the old personnel manager. The

Commissioner's representative disagreed with that statement, stating that "The

burden stays with the claimant." Decision on Appeal to the Commissioner,

November 1, 1985, p. 5.

On or about December 27, 1985, the Department of Human Rights found

probable cause to believe that Cleveland Gear had discriminated against

Williams. On or about October 15, 1987, following unsuccessful attempts to

conciliate the matter, a Complaint was issued. On or about January 20, 1988,

Respondent served its Motion for Summary Judgment, alleging that the decision

of the Commissioner's representative in the unemployment compensation

proceeding is res judicata and bars Complainant from proceeding under the

Human Rights Act.

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Using the four Ellis tests, there are two questions which require analysis.

The first is whethe or not the determination that the voluntary quit was not

for good cause attributable to the Employer was identical to the issue to be

decided in the discrimination case, The second is whether or not Williams was

given a "full and fair opportunity" to be heard on the issue.

The Ellis case provides some guidance on the first question. In that

case, a landlord filed an unlawful detainer complaint against his tenants, who

refused to vacate the premises or execute a rental agreement. There was a

four-day jury trial. One of the instructions to the jury, given at the

tenants' request, was as follows:

It would be a prohibited discrimination under the Minnesota

Human Rights Act and the Civil Rights Ordinance of the City

of Minneapolis if the landlords' attempt to terminate the

tenancy . . . was motivated by the fact that the tenant was

a Native American. Then you should find for the defendants.

The jury returned a verdict in favor of the landlord. The tenants filed a

charge of racial discrimination with the Minneapolis Commission on Civil

Rights, alleging that the landlord had discriminated in the rental of real

property. A hearing was held before a three member panel of the Commission,

which found that the landlord had discriminated against the tenant. The

Commission's findings were affirmed by the District Court, and the landlord

appealed to the Supreme Court, arguing that the Minneapolis Commission was

collaterally estopped from relitigating the issue of discriminatory eviction

because of the adverse jury verdict in the unlawful detainer action. The

Supreme Court agreed with the landlord, and reversed the District Court. With

particular regard to the first of the four tests, the Court noted:

The issue in the unlawful detainer action -- as raised by

the defense of discriminatory eviction and reflected in the

jury instruction on the same -- is identical with the issue

raised by the alleged violations of the Civil Rights

Ordinance.

In the Williams case, although the factual issue in the unemployment case is

the same as the factual issue in the discrimination case, the manner in which

the evidence is presented and analyzed is dramatically different. The same

evidence could well result in a different outcome given the two different

methods. Minnesota has adopted the analytical framework of McDonnell Douglas

v. Green, 411 U.S. 792 (1973). See, for example, Danz v._Jones, 263 N.W.2d

395 (Minn. 1978). In Anderson v. Hunter,_Keith Marshall & Co., 417 N.W.2d 619

(Minn. 1988), the Minnesota Supreme Court noted that it had already adopted

the McDonnell Douglas analysis as an aid to resolving "single-motive" discrimi-

nation cases, and it held, in the Anderson case, that the same analysis must

be applied to "mixed-motive" cases as well. The Court in Anderson then went

on to offer a detailed description of how the analysis should be applied.

That analysis was not applied in Williams' unemployment compensation case.

That may be the reason why the Referee suggested Williams might want to pursue

her discrimination claim "in another forum."

While there might be adjudicative facts which would not vary depending

upon the analysis used, the fact at issue here (whether or not sex played a

role in Williams' pay) is definitely the kind of fact whose determination

might well be affected by the method of analysis.

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The reasoning set forth above is tied into the fourth Ellis test as well.

That test provides that collateral estoppel is appropriate where the estopped

party was given a "full and fair opportunity" to be heard on the adjudicated

issue. Again, the starting point on that issue is Ellis itself. In that

case, a four-day jury trial had resulted in a verdict in favor of the

landlord. The jury was given a special instruction relating to racial

discrimination. The jury found for the landlord. The tenants started a

separate action before the Minneapolis Commission on Civil Rights. The

Commission found discrimination. The landlord appealed. The thrust of the

tenant's argument was the idea that the unlawful detainer action involved only

limited issues presented in a summary Manner, thereby preventing him from

having a full and fair opportunity to adjudicate the issue of racial

discrimination. The Supreme Court rejected the claim with the following

analysis (emphasis added):

This particular unlawful detainer proceeding was not summary

in nature, however. Both parties were represented by

counsel. Respondent....... had significantly more time to

prepare a response than is typical in an unlawful detainer

action. The matter was tried to a jury over a four-day

period. Respondent . . . was allowed to introduce extensive

testimony regarding his defense of discriminatory eviction.

Although his right to discovery was admittedly limited . . .

Respondent has failed to indicate how this limitation

encumbered his ability to present fully his position. In

this unique_ fact situation, Respondent..... has had a full

and fair opportunity to litigate the discriminatory

eviction issue in the unlawful detainer action.

What the Ellis court is saying is that it is appropriate to look at the facts

of each case to decide if a full and fair opportunity has been granted.

In the instant case, Williams appeared at the unemployment compensation

hearing pro se. She was the only witness on her behalf - she called no

others. Her last day of work was March 13, 1985, and the first hearing date

was April 25, 1985. A second hearing was held on May 31, 1985. While it

certainly would not be impossible to engage in meaningful discovery during

that time if Respondent were cooperative, there is no indication that there

was any discovery in that case, or that Williams was even aware of its

purposes and procedures. Moreover, there was no participation of governmental

agencies which have expertise in the area of proving discrimination.

While there may be cases where an unemployment decision could be used to

estop a later human rights action [see, for example, Roberson v. First Bank

Systems, Inc., No. 85-2315, Hennepin County District Court, December 17, 1987

and Gear v. Citv of Des Moines, 514 F. Supp. 1218 (S.D. la. 1981)], they ought

to be the exception rather than the rule. The unemployment compensation

statute and process are designed to provide quick decisions on limited

questions. The workloads of the referees and representatives are established

with this in mind. The rules of procedure and burdens are equally focused.

Participants are not warned of the possible consequences of a given outcome,

such aS collateral estoppel. There are strong public policy reasons that

militate against the wholesale use of these decisions for other litigation.

See, dissent of Justice Blackmar in Bresnahan v. May Dept. Stores, 726 S.W.2d

327 (Mo. 1987). While a particular case may present a situation where

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estoppel is appropriate (such as Ellis), that exceptional case does not create

a blanket rule, or even a presumption.

When weighed against the Ellis critera, the Williams Ease does not present

an adequate bassis for allowing the use of collateral estoppel. Without

collateral estoppel, there is no basis for summary judgment. Therefore,

Cleveland's motion must be denied.

The parties also disagree as to whether Minnesota law allows a claim of

discrimination to be based upon a theory of "comparable worth" -- that if a

person of one sex in one position is paid less than a person of another sex in

a different position, but the two positions are "comparable", then a

discrimination claim would lie.

The Administrative Law Judge has not addressed that question because it

would involve a substantial amount of time and the resolution of the primary

qeustion may resolve the entire case. In the interests of economy, therefore,

that issue is explicitly not decided at this time. If the case cannot be

resolved without a hearing, and if either party desires to resolve this issue

prior to hearing, then another motion may be brought.

A.W.K.

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