HR-86-027-PE

4-1700-669-1

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

In the Matter of the Proposed Rules REPORT OF THE

Relating to Discrimination Complainant. ADMINISTRATIVE LAW JUDGE

The above-entitled matter came on for hearing before Administrative Law

Judge Peter C. Erickson at 9:30 a.m. on Thursday, July 17, 1986, in the

Auditorium of the Hubert H, Humphrey Institute on the University of Minnesota

Campus in Minneapolis, Minnesota,

This report is a part of a rule hearing proceeding held pursuant to Minn.

Stat. 14.131 - 14.20, to determine whether the Agency has fulfilled all

relevant, substantive and procedural requirements of law, whether the proposed

rules are needed and reasonable, and whether or not the rules, if modified,

are substantially different than those originally proposed.

Carl Warren, Special Assistant Attorney General, 1100 Bremer Tower, 7th

Place and Minnesota Street, St. Paul, Minnesota 55101, appeared on behalf of

the Minnesota Department of Human Rights. Appearing and testifying in support

of the proposed rules was Linda C. Johnson, Commissioner of the Department of

Human Rights and Walter Barwick, Deputy Commissioner. The hearing continued

until all interested groups or persons had had an opportunity to testify

concerning the adoption of the proposed rules.

The Commissioner of the Department of Human Rights must wait at least five

working days before taking any final action on the rules; during that period,

this Report must be made available to all interested persons upon request,

Pursuant to the provisions of Minn. Stat. 14.15, subd. 3 and 4, this

Report has been submitted to the Chief Administrative Law Judge for his

approval. If the Chief Administrative Law Judge approves the adverse findings

of this Report, he will advise the Commissioner of actions which will correct

the defects and the Commissioner may not adopt the rule until the Chief

Administrative Law Judge determines that the defects have been corrected.

However, in those instances where the Chief Administrative Law Judge

identifies defects which relate to the issues of need or reasonableness, the

Commissioner may either adopt the Chief Administrative Law Judge's suggested

actions to cure the defects or, in the alternative, if the Commissioner does

not elect to adopt the suggested actions, she may submit the proposed rule to

the Legislative Commission to Review Administrative Rules for the Commission's

advice and comment.

If the Commissioner elects to adopt the suggested actions of the Chief

Administrative Law Judge and makes no other changes and the Chief

Administrative Law Judge determines that the defects have been corrected, thin

the Commissioner may proceed to adopt the rule and submitnit to the Revisor of

Statutes for a review 6f the f6fil If the Commission Makes changes in the

rule other than those suggested by the Administrative Law Judge and the Chief

Administrative Law Judge, then she shall submit the rule, with the complete

record, to the Chief Administrative Law Judge for a review of the changes

before adopting it and submitting it to the Revisor of Statutes.

When the Commissioner files the rule with the Secretary of State, she

shall give notice oh the day of filing to all persons who requested that they

be informed of the filing.

Based upon all the testimony, exhibits and written comments, the

Administrative Law Judge makes the following:

FINDINGS OF FACT

Procedural Requirements

1. On May 27, 1986, the Department filed the following documents with the

Chief Administrative Law Judge:

(a) A copy of the proposed rules certified by the Revisor of Statutes.

(b) The Order for Hearing.

(d) A Statement of the number of persons expected to attend

the hearing and estimated length of the Agency's presentation.

(e) The Statement of Need and Reasonableness.

(f) A Statement of Additional Notice.

2. On June 9, 1986, a Notice of Hearing and a copy of the proposed rules

were published at 10 State Register pages 2471-2479.

3. On May 27, 1986, the Department mailed the Notice of Hearing to all

persons and associations who had registered their names with the Department

for the purpose of receiving such notice.

4. On June 6, 1986, the Department filed the following documents with the

Administrative Law Judge:

(a) The Notice of Hearing as mailed.

(b) The Agency's certification that its mailing list was

accurate and complete.

the Agency's list.

(d) The names of Department personnel who will represent the

Agency at the hearing together with the names of any other

witnesses solicited by the Agency to appear on its behalf.

(e) A copy of the State Register containing the proposed rules.

The documents were available for inspection at the Office of

Administrative Hearings from the date of filing to the date of the hearing.

5. The period for submission of written comment and statements remained

open through July 24, 1986. The hearing record closed on July 29, 1986, at

the end of the third business day following the close of the comment period.,

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Statutory Authority

6. Statutory authority to "adopt suitable roles and regulations for

effectuating the purposes of this chapter" is found at Minn. Stat. 363.05,

subd. 1(8) (1984).,

Small Business Considerations

7. Pursuant to Minn. Stat. 14.115, the Department's Statement of Need

and Reasonableness sets forth the methods it considered for reducing the

impact of the proposed rules on small business.

Modifications Made to the Proposed Rules Prior to and During the Hearing

8. Prior to the public hearing on the proposed rules, the Department made

the following modifications which were distributed at the commencement of the

hearing:'

Certain errors noted in the proposed rules are hereby corrected

and a statement of the reason for the correction follows each

notation.

Page 6, line 5. The commissioner P-p-t- to shall not

process: Reason: shall not, clarifies by stating more directly

that resources shall not be expended inappropriately.

Page 6, line 7. B. a charge which the commissioner 4e??*4o,

determines Reason: determines is consistent with the statute at

363.14, subd. l(b)(1).

Page 6, line 12. The commissioner at* shall dismiss a charge

the commissioner Reason: shall is consistent with the statute

at 363.06, subd. 4(l).

Page 6, line 13. 4*??e*et determines is: Reason: determines is

consistent with the statute at 363.06, subd. 4(l).

Page 7, line 28. request to the charging party, the

commissioner a4y.shall process the Reason: shall indicates

that timely and appropriate disposition will be made.

Page 9, line 24. discriminatory practice, the commissioner"*41

shall attempt to Reason: shall is consistent with the statute

at 363.06, subd. 4(3).

Page 9, line 26. act and parts 5000.0500 - 5000.0800- , unless

the commissioner determines that attempts to conciliate would be

unproductive or unsuccessful. Reason: this is consistent with

the statute at 363.06, subd. 4(3).

'This "errata" sheet is keyed to the revisor's copy of the

proposed rules which was used at the hearing.

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Page 12, line_33 notice of the determination-a44 which may

include a Reason this is consistent with the statute at

363.06, subd. 4.

Page 12, line 34: participate in a conciliation conference,_as

provided in Rule 5000.0580, subp. 2, for Reason: this is

consistent with the statute at 363.06, subd. 4.

Page 13, line 9; commissioner may shall terminate attempts to

conciliate the Reason: clarifies the circumstances under which

the commissioner will terminate proceedings in accordance with

earlier provisions of the rules.

Page 13, line 10. matter and.may shall issue a complaint in

accordance with the Reason: clarifies the circumstances under

which the commissioner will terminate proceedings in accordance

with earlier provisions of the rules.

Page 13, line 11. act and parts 5000.0050 to 5000.2400 ,

unless the commissioner determines to dismiss the charge

pursuant to 5000.0400, subp. 6, 5000.0520 or 5000.0540. Reason:

clarifies the circumstances under which the commissioner will

terminate proceedings in accordance with earlier provisions of

the rule.

Page 14, line 3. the receipt of the notice to respony, the

commissioner.ma4.shall Reason: to indicate that claims of

noncompliance are taken seriously.

Page 14, line 6. determined, the commissioner.=4y.shall

commence proceedings to enforce. Reason: shall is consistent

with statute language at 363.06, subd. 3.'

Page 14, line 7. the agreement--, unless the commissioner

determines that to do so would not warrant use of department

resources. Reason: to clarify that resources will not be

expended inappropriately as expressed in the statement of needs

and reasonableness.

Page 14, line 14. Subpart 1. When issued. The commissioner

la,.shall Reason: shall is consistent with the statute at

363.06, subd. 4(3).

Page 14, line 19. have been terminated+., or when the

commissioner has reason Reason: to continue the sentence at

line 21 and following.

'The Judge points out that the statutory citation should be Minn. Stat.

363.091 rather than Minn. Stat. 363.06, subd. 3.

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Page 14, Itne 21. practice- unless-t commissioner

determines that it is appropriate to dismiss the charge pursuant

to Rule 5000.0520 or Rule 5000.0540. Reason: to parallel the

changes made in Rule 5000.0800; subp. 2 for clarification of

that provision.

The modifications above clarify the intent of the proposed rules and

eliminate the Department's "unbridled discretion" to act in some situations.

The Judge finds that the proposed modifications have been shown to be both

needed and reasonable and none constitute a substantial change from the rules

as proposed.

9. During the hearing on this matter the Department corrected a clerical

error in proposed rule 5000.0750, subp. 3, by changing a reference to rule

5000.0700, subp. 4 to rule 5000.0700, subp. 9.

Nature of the Proposed Rules

10. Minn. Stat. 363.06 provides for the filing, processing and

disposition of "grievances" for any person alleging a violation of the

Minnesota Human Rights Act. The Commissioner of the Department of Human

Rights was authorized by the 1983 Legislature to adopt temporary rules to

implement the Act. These temporary rules were in affect from February 17,

1984 to February 11, 1985. Pursuant to Minn. Stat. 363.05, subd. 1(8), the

Commissioner has proposed these proposed rules for adoption as permanent rules.

The proposed rules are designed to outline the procedure for processing

charges of discrimination, or grievances, if the document filed does not meet

the requirements for a charge. These rules will provide all parties with

information concerning the procedures which will be followed after a charge,

or grievance is filed with the Department. The Department intends that these

rules will increase the efficiency of investigations and ensure equitable

treatment of all parties involved in a charge of unfair discriminatory

practices.

Discussion of the Proposed Rules

11. Provisions of the proposed rules, as modified above, which are

adequately supported by the Statement of Need and Reasonableness and received

no negative public comment, will not be specifically discussed below. Rather,

only provisions about which issues of need, reasonableness, and/or statutory

authority have been raised will be addressed. Except as specifically modified

below, the Administrative Law Judge finds that the need for and reasonableness

of each portion of the proposed rules has been demonstrated.'

'In order for an agency to meet the burden of reasonableness, it must

demonstrate by a presentation of facts that the rule is rationally related to

the end sought to be achieved. Broen Memorial Home v. Minnesota Department of

Human Services, 374 N.W.2d 436, 440 (Minn.App. 1985). Those facts may either

be adjudicative facts or legislative facts. Manufactured Housing Institute v.

Pettersen, 347 N.W.2d 238, 244 (Minn. 1984). The agency must show that a

reasoned determination has been made. Manufactured Housing Institute at 246.

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Proposed Rule 5000.0050 subp. 11

1 --This provision defines a "statement of grievance" as "written information

received by the Department that may become a charge of discrimination . . .

but that lacks one or more-of the required elements . . . -The St. Paul

Chamber of Commerce and the Minnesota School Boards Association both argue

that this "procedural step" is unnecessary, it is not authorized by statute,

and will not provide adequate notification to respondents. The Department

contends that this provision will protect persons who file incomplete

information with the Department concerning an alleged discriminatory

practice. Proposed rule 5000.0400 states clearly that in order for a

statement of grievance to be actionable, it must result in the filing of a

verified charge.

Although Minn. Stat. 363.06 does not specifically provide that a

charging party may file a statement of grievance, the proposed rules make it

clear that this is only a preliminary step to filing a verified charge. The

statute does not require service of an allegation of a discriminatory practice

on the respondent until five days after a "charge" is filed. The

Administrative Law Judge finds that this newly created procedural step is

within the Commissioner's authority to implement Chapter 363 and does not

conflict with any statutory provisions. The reasonableness of this proposed

rule has been demonstrated.

13. Prooosed rule 5000.0400, subp. 2.

As initially proposed, this provision stated that any statement of

grievance filed with the Department within 245 days after the occurrence of a

discriminatory practice must be perfected into a verified charge by the 300th

day after the occurrence. Additionally, it provided that a statement of

grievance received between the 246 and 300 days following the occurrence of

the alleged discriminatory practice would be considered filed as of the date

of its receipt if it became a verified charge within 30 days of the

Department's mailing of a perfected charge to the person filing the charge.

This language allowed for a statement of grievance to be filed as a perfected

charge more than 300 days following the occurrence of the discriminatory

practice. This clearly conflicts with Minn. Stat. 363.06, subd. 3 which

sets a 300 day statute of limitations. This issue was raised by several

persons at the hearing.

The Department subsequently proposed that subpart 2 of proposed rule

5000.0400 be modified as follows:

Subp. 2 Filing. A statement of grievance received by the

department between the 260th and 300th days, inclusive,

will be considered filed as of the date of its receipt.

Within five days of the filing, the commissioner shall:

A. serve on the respondent a draft of an unverified

charge based on the statement of grievance.

B. provide the charging party with a draft charge to be

perfected to conform to part 5000.0400 subp. 1.

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A charge which is filed and served As an uhvirified charge

must be perfected into alverified charge within 30 days of

the department's mailing of a draft charge to the charging

party or it will be dismissed pursuant to part 5000.0540.

The commissioner shall provide a copy of the verified

charge to the respondent within five days of its receipt by

the department.

The above-modification still permits, however, a statement of grievance to

be filed as a verified charge after the 300 day statutory time limit. Thus,

the Judge finds that the proposed rule, as amended, is in violation of a

substantive provision of law. This defect can be corrected by rewriting

subpart 2 as follows:

Subp. 2 Filing. A statement of grievance received by the

department must be filed as a verified charge pursuant to

Minn. Stat. 363.06, subd. 3

The Department may also add a provision stating that a copy of an unverified

charge will be served on the Respondent and/or that the charging party will be

provided with a copy of a draft charge within a certain number of days after

receipt of the statement of grievance. 4

14. Proposed rule 5000.0400, subp. 2a.

The above-provision provides that if a charge is filed with the Department

of Human Rights that alleges a violation of anti-discrimination laws

administered by EEOC or HUD, it will automatically be filed by the Department

with the EEOC or HUD. The Minnesota School Boards Association argues that

there is no statutory authority for this "cross-filing". The Department

contends that the proposed rule is consistent with long established practice

and obviates the necessity for charging parties to file separately with both

state and federal agencies.

Minn. Stat. 363.05, subd. 1 gives the Commissioner of Human Rights very

broad powers to enforce anti-discrimination laws and develop programs and

policies to aid in that enforcement. The Judge finds that the "cross-filing"

provision falls within those broad powers of enforcement.

15. Rule 5000.0500, subp. 3.

The above-provision allows the Commissioner to order any person to produce

documents for inspection and copying if those documents pertain to a charge of

discrimination or a complaint. Dakota County argued that this rule may be

overly burdensome to potential respondents and that it should be amended to

4The Judge points out that subpart lb. of rule 5000.0050 states that all

charges must be filed within 300 days of an alleged unfair discriminatory

practice. There is, however, an exception to this time limit found in Minn.

Stat. 363.06, subd. 3. Subpart lb. might be more technically correct if it

provided that, "a charge must be filed within 300 days of an alleged unfair

discriminatory practice unless the limitation period is suspended during the

time a potential charging party and respondent are voluntarily engaged in a

dispute resolution process pursuant to Minn. Stat. 363.06, subd. 3."

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provide for a response regardingzreasons forpnon production. The Judgegpoists

that this rule is-currently in effect; it is not a "new" rule and no

amendments were proposed by'the Department Consequently, proposed-changes to

this provision are outside the scope of this proceeding and cannot be

considered at this time. Dakota County's proposal will be forwarded to the-

Department of Human Rights for consideration in the future.

16. Proposed rule 5000.0510.

The above-proposed rule permits the Commissioner to schedule a fact

finding conference, require the attendance of persons at that conference and

restrict the attendance of others. The St. Paul Chamber of Commerce argues

that the Commissioner's ability to restrict attendance, without any standard

for the restriction, is unreasonable. The Chamber contends that this power to

restrict may be used arbitrarily, resulting in a skewed fact finding

proceeding. The Department contends that the fact finding conference is one

of the tools it uses to investigate suspected violations of the Human Rights

Act. The Department states that its decision to restrict the attendance of

some persons will be exercised only to exclude those whose presence is in

appropriate so that the conference will be an effective means of processing

the case. A respondent may request the inclusion of persons at a fact finding

conference without objection from the Department if those persons have

relevant testimony. Additionally, a respondent's opportunity to submit or

identify relevant evidence is not foreclosed by the Commissioner's ability to

restrict attendance at a fact finding conference.

Because Chapter 363 gives the Commissioner of Human Rights broad authority

to investigate and process charges of discrimination, and does not prohibit in

any way a respondent's right to submit information to the Department as part

of that investigation, the Judge finds that the need for and reasonableness of

proposed rule 5000.0510 has been demonstrated.

17. Proposed rule 5000.0540.

This proposed rule provides that the Commissioner of Human Rights "may"

dismiss a charge because of the failure to provide required information in

several specified circumstances. The authority for this rule is based on

Minn. Stat. 363.06, subd. 1, which states that, "the commissioner may

dismiss a charge when the charging party fails to provide required

information." The above-rule seeks to implement that authority by setting

forth specific circumstances when dismissal will occur. Rather than making

dismissal mandatory, the rule provides that the Commissioner may dismiss if

the required information is not provided. The purpose of rulemaking, however,

is to set specific bounds for the discretionary authority of agency heads.

It has been the long-standing position of the Attorney General's Office -

and the Office of Administrative Hearings that use of the word "may" when

defining departmental duties or responsibilities can result in "unbridled

discretion" which is in violation of Minn. Stat. 14.02, subd. 4, the

definition of "rule". That definition states that rules are adopted to

"implement or make specific the law enforced or administered by . . ." the

agency. (Emphasis added). In the above-rule, the Department has spelled out

the situations in which dismissal could occur if the required information is

not provided. However, dismissal is still discretionary with the Commissioner

rather than mandatory, or specific, as required by Chapter 14. Consequently;

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the Judge finds that-the discretionarylprovisions in the above rule arecin

conflict with a substantive provision of law:- This defect can be'remedied by

replacing the word "may" found in subparts-1 and 2 of proposed rule 5000.0540

with the word "shall".

18. Proposed rule 5000.0570

The above-proposed rule provides that charging parties may request that

proceedings which hive been terminated because the Commissioner has dismissed

a charge be reopened. The Department has modified subpart I of the rule to

read, "the request must be in writing and must state a substantive reason for

reopening." The proposed rule requires that the Commissioner shall promptly

notify the Respondent by certified mail of the request to reopen and that the

respondent has ten days to respond in writing regarding the reopening.

Considerations for deciding whether to reopen are enumerated in the rule.

Additionally, the rule provides that if it is determined that the "department

clearly erred in closing a proceeding, the commissioner may reopen the

proceedings without a request."

The Minnesota School Boards Association, St. Paul Chamber of Commerce,

Dakota County and the Association of Metropolitan School Districts all

commented in opposition to the proposed rule. Their objections to the rule

were: (a) there is no maximum time limit for the reopening of a case, thus, it

could occur months or even years after a respondent was informed that the

charge had been dismissed; and (b) the factors enumerated which will be used

by the Commissioner to determine whether or not to reopen a case are overly

broad and permit too much discretion. In response to these concerns, the

Department stated that a 60-day time limit for case reopening would be

acceptable.

As has been stated previously, the Commissioner of Human Rights has very

broad statutory authority to investigate and process cases of alleged

discrimination. Based on that broad authority, the Judge finds that the

considerations for reopening a case set forth in subpart 3 of proposed rule

5000.0570 have been shown to be reasonable. However, the indefiniteness of

the time period when reopening could occur has not been shown to be

reasonable. This defect must be corrected by setting a maximum time for case

reopening. Subpart 6 could be added to the rule which would read, "No case

shall be reopened pursuant to this rule more than 60 days after notice that

the proceedings have been terminated was served by the commissioner."

Additionally, use of the word "may" in subpart 4 of the rule permits

"unbridled discretion" as discussed above and is a violation of a substantive

provision of law. To correct this defect, the rule must be changed by

substituting the word shall for may. As amended above, the Judge finds that

the need for and reasonableness of proposed rule 5000.0570 has been

demonstrated.

19. Proposed rules 5000.0700 and 5000.0750.

These proposed rules provide for the administrative appeal of no probable

cause and probable cause determinations by charging parties and respondents,

respectively. Dakota County and the Minnesota School Boards Association

commented in opposition to the basis for reconsideration contained in each of

the rules. They argue that a charging party is entitled to submit new-

evidence in an effort to change a no probable cause determination while a

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respondent is only able to submit evidence that was not available during the

investigation. The two organizations contend that the difference in

standards, which appear to favor the charging party, is unreasonable.

In response to these concerns, the Department stated that the deletion of

the word "new" from subpart 8 of rule 5000.0700 would be acceptable. However,

the criteria for reconsideration for a charging party would then read,

"evidence that was not originally considered" and the standard for respondents

would read, "evidente that was not available during the investigation." These

standards are obviously not the same and would allow a charging party much

more latitude to find or produce evidence which was not considered during the

investigation. A respondent would have to show that any evidence that it

submitted was "not available". The Judge finds that the reasonableness of the

differing standards has not been demonstrated by the Department. In order to

correct this defect, the Department must use a uniform "evidence" standard for

both respondents and charging parties when petitions for reconsideration are

submitted. Either of the standards used in the proposed rules would be

reasonable.

20. Proposed rule 5000.2250.

This proposed rule requires that respondents who are notified that a

charge of discrimination is pending must retain all documents related to the

charge that are under its control. The rule further provides that the

documents must be retained until the Commissioner notifies the respondent that

the charge has been resolved. Several persons commented that due to the

unlimited time frame in which a case may be reopened (this provision was

discussed above), it is unreasonable to require that respondents retain

records indefinitely. Finding 18 above clearly states that the Department

must provide for a maximum time limit to reopen cases. The preservation of

records rule only requires that documents be retained until the respondent is

notified that the charge has been resolved. With the changes noted above,

retention of records will not be an "indefinite" proposition. Consequently,

the Judge finds that the need for and reasonableness of proposed rule

5000.2250 has been demonstrated.

Based upon the foregoing Findings of Fact, the Administrative Law Judge

makes the following:

CONCLUSIONS

1. That the Department of Human Rights gave proper notice of the hearing

in this matter.

2. That the Department has fulfilled the procedural requirements of Minn.

Stat. 14.14, subds. 1, la and 14.14, subd. 2, and all other procedural

requirements of law or rule.

3. That the Department has demonstrated its statutory authority to adopt

the proposed rules and has fulfilled all other substantive requirements of law

or rule within the meaning of Minn. Stat. 14.05, subd. 1, 14.15, subd. 3

and 14.50 (i)(ii), except as noted at Findings 13, 17 and 18.

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4. That the Department has documented the need for and reasonableness of

ts proposed rules with an affirmative presentation of facts in the record

within the meaning of Minn. Stat. 14.14, subd. 2 and 14.5b (iii), except-as

noted at Findings 18 and 19.

5; That the amendments and additions to the proposed rules which were

suggested by the Department after publication of the proposed rules in the

State Register do not result in rules which are substantially different from

the proposed rules as published in the State Register within the meaning of

Minn. Stat. 14.15, subd. 3, and Minn. Rule 1400.1000, Subp. 1 and 1400.1100.

6. That the Administrative Law Judge has suggested action to correct the

defects cited in Conclusions 3 and 4 as noted at Findings 13, 17, 18 and 19.

7. That due to Conclusions 3 and 4, this Report has been submitted to the

Chief Administrative Law Judge for his approval pursuant to Minn. Stat.

14.15, subd. 3.

8. That any Findings which might properly be termed Conclusions and any

Conclusions which might properly be termed Findings are hereby adopted as

such .

9. That a finding or conclusion of need and reasonableness in regard to

any particular rule subsection does not preclude and should not discourage the

Department from further modification of the proposed rules based upon an

examination of the public comments, provided that no substantial change is

made from the proposed rules as originally published, and provided that the

rule finally adopted is based upon facts appearing in this rule hearing

record.

Based upon the foregoing Conclusions, the Administrative Law Judge makes

the following:

RECOMMENDATION

It is hereby recommended that the proposed rules be adopted except where

specifically otherwise noted above.

Dated this day of August, 1986.

PETER C. ERICKSON

Administrative Law Judge