Alberte v. Anew Health Care Services, Inc.

588 N.W.2d 298, 223 Wis. 2d 1, 8 Am. Disabilities Cas. (BNA) 1204, 1998 Wisc. App. LEXIS 1220

• Court: Court of Appeals of Wisconsin
• Decided: October 20, 1998
• Docket: 96-3225
• Status: Published

Opinions

FINE, J.

Lisa K. Alberte appeals from the trial court's grant of summary judgment dismissing Sally Sprenger from Alberte's action under the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., and Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq.

The facts material to this appeal are neither disputed nor complicated. Anew Health Care Services, Inc., provides skilled nursing services to persons in the community. Alberte used to work for Anew Health Care. She was fired by Sprenger, who was president, administrator, and 47.5% owner of Anew Health Care. Alberte claims that Sprenger fired her because of Alberte's disability. She seeks to hold Sprenger personally liable, in addition to seeking damages from Anew Health Care. Sprenger contends that she cannot be personally liable for what she did as an officer, part owner, and employee of Anew Health Care. The trial court agreed. We reverse.

The Americans with Disabilities Act makes it illegal for any "covered entity," which is defined to include an "employer," 42 U.S.C. § 12111(2), to "discriminate against a qualified individual with a disability." 42 U.S.C. § 12112(a). The Act defines "employer" to mean, as material to this appeal, "a person engaged in an industry affecting commerce" who employs at least a specified minimum number of employees "and any agent of such person." 42 U.S.C. § 12111(5)(A). "Person" includes a "corporation." 42 U.S.C. § 12111(7) (adopting the definition in 42 U.S.C. § 2000e(a)). Anew Health Care admits that it is an "employer"; Sprenger admits that she is an "agent."

The Americans with Disabilities Act gives to anyone claiming to be a victim of a violation under it the remedies set out in Title VII of the Civil Rights Act. 42 U.S.C. § 12117(a). Title VII also defines "employer" to include "any agent" of the "person" deemed to be an "employer." 42 U.S.C. § 2000e(b). A party whose rights under the Americans with Disabilities Act are intentionally violated may recover compensatory and punitive damages. 42 U.S.C. § 1981a.

As noted, this case was decided on summary judgment. Our review of the trial court's decision is, therefore, de novo. See Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816, 820 (1987). Moreover, whether the Americans with Disabilities Act permits imposition of personal liability on one who is an "employer" by virtue of her status as an "agent" of an "employer" is an issue of law that we also review de novo. See Truttschel v. Martin, 208 Wis. 2d 361, 364-365, 560 N.W.2d 315, 317 (Ct. App. 1997) (interpretation of statutes presents legal issues that are decided de novo by appellate courts).

We begin our analysis by looking at the statute to determine whether its language is clear or ambiguous. De Bruin v. State, 140 Wis. 2d 631, 635, 412 N.W.2d 130, 131 (Ct. App. 1987). If it is clear, we must apply its plain meaning. DNR v. Wisconsin Power & Light Co., 108 Wis. 2d 403, 408, 321 N.W.2d 286, 288 (1982). Although federal cases applying federal law can he helpful to our analysis, we are only bound by the interpretation given to federal law by the United States Supreme Court. See State v. Webster, 114 Wis. 2d 418, 426 n.4, 338 N.W.2d 474, 478 n.4 (1983). The Supreme Court has not yet decided whether the Americans with Disabilities Act permits imposition of personal liability on an "agent." It is also an issue of first impression in Wisconsin. Significantly, the Supreme Court, as do we in Wisconsin, recognizes that the legislature speaks through the words it uses, and those words must be enforced as written, United States v. Salerno, 505 U.S. (1992) (In enacting the rule against hearsay and its exceptions, Congress "presumably made a careful judgment"; "To respect its determination, we must enforce the words that it enacted."), unless, of course, constitutional principles intervene. We analyze Alberte's appeal with this in mind.

As material to this appeal, the Americans with Disabilities Act prohibits discrimination against employees by both the "employer" and the employer's "agent," who, by virtue of the statute, is also deemed to be an "employer." 42 U.S.C. § 12111(5)(A). See also Title VII of the Civil Rights Act, 42 U.S.C. § 2000e(b) ("employer" includes "any agent" of the "person" deemed to be an "employer"). 42 U.S.C. § 1981a permits an employee suffering intentional discrimination because of his or her disability to recover, if certain criteria that are not material here are met, compensatory and punitive damages from a "respondent." "Respondent" includes an "employer." 42 U.S.C. § 2000e-5(b) (incorporated into the Americans with Disabilities Act by 42 U.S.C. § 12117(a)). Anew Health Care is an "employer"; this is not disputed. Sprenger admits that she is an "agent" as that word is used in both the Americans with Disabilities Act and Title VII of the Civil Rights Act. She is, therefore, an "employer" as that word is used in the Americans with Disabilities Act, and is thus a "respondent" for the purposes of 42 U.S.C. § 1981a.

Sprenger argues that the trial court properly dismissed her from Alberte's lawsuit because most of the federal courts that have considered the issue have held that imposition of personal liability on "agents" is not warranted despite the statutes' Tinkers-to-Evers-to-Chance definitional syllogism ("agent" = "employer" = "respondent"). Those courts, however, generally recognize that they are disregarding the literal statutory language in favor of what they see as either a contrary congressional intent or a contrary public policy. See, e.g., Wathen v. General Electric Co., 115 F.3d 400, 404, 405 (6th Cir. 1997) (citing cases) ("We concede that 'a narrow, literal reading of the agent clause in § 2000e(b) does imply that an employer's agent is a statutory employer for purposes of liability.'") (quoted source omitted).

Typical of the authorities upon which Sprenger relies, and one that advances all of her arguments against personal liability, is United States Equal Employment Opportunity Commission v. AIC Security Investigations, Ltd., 55 F.3d 1276 (7th Cir. 1995), which, as here, was an action under the Americans with Disabilities Act. See id., 55 F.3d at 1278. We analyze these arguments in turn, focusing, in main, on AIC Security.

Recognizing that imposition of personal liability on an "agent" who violates the Americans with Disabilities Act is required by the Act's "plain language," AIC Security held that "the actual reason for the 'and any agent' language in the definition of 'employer' was to ensure that courts would impose respondeat superior liability upon employers for the acts of their agents." Id., 55 F.3d at 1281. Neither AIC Security, however, nor the two cases upon which it relies, Birkbeck v. Marvel Lighting Corp., 30 F.3d 507, 510 (4th Cir. 1994) (an Age Discrimination in Employment Act case), cert. denied, 513 U.S. 1058, and Miller v. Maxwell's International Inc., 991 F.2d 583, 587 (9th Cir. 1993) (an action brought under both Title VII of the Civil Rights Act and the Age Discrimination in Employment Act), cert. denied, 510 U.S. 1109, explain why that language was needed to have common-law respondeat superior principles apply under the Americans with Disabilities Act; entities can act only through humans, and are generally responsible for the acts of employees and agents that are within the scope of the employment or agency. See Restatement (Second) of Agency § 219 (1957). Indeed, Vinson v. Taylor, 753 F.2d 141, 150-152 (D.C. Cir. 1985), imposed absolute liability under Title VII of the Civil Rights Act on the employer for the acts of its agent/employee, holding that even broad respondeat superior liability was too limited, but the Supreme Court reversed. Meritor Savings Bank v. Vinson, 477 U.S. 57, 69-73 (1986). Meritor viewed the use of the "agent"-equals-"employer" language in Title VII as reflecting congressional intent to limit employer liability:

We therefore decline the parties' invitation to issue a definitive rule on employer liability, but we do agree with the [Equal Employment Opportunity Commission] that Congress wanted courts to look to agency principles for guidance in this area. While such common-law principles may not be transferable in all their particulars to Title VII, Congress' decision to define "employer" to include any "agent" of an employer, 42 U.S.C. § 2000e(b), surely evinces an intent to place some limits on the acts of employees for which employers under Title VII are to be held responsible. For this reason, we hold that the Court of Appeals erred in concluding that employers are always automatically liable for sexual harassment by their supervisors. See generally Restatement (Second) of Agency §§ 219-237 (1958) [sic]. For the same reason, absence of notice to an employer does not necessarily insulate that employer from liability. Ibid.

Id., 477 U.S. at 72 (emphasis added); see also Faragher v. City of Boca Raton, 118 S. Ct. 2275, 2278 (1998) (recognizing Meritor's holding that "an employer is not 'automatically' liable for harassment by a supervisor who creates the requisite degree of discrimination"); Gebser v. Lago Vista Indep. School Dist., 118 S. Ct. 1989, 2004 n.9 (1998) (Stevens, J., dissenting) (Meritor viewed reference to " 'agent' as a limitation on the liability of the employer").

We do not see Congress's decision to include certain employees within the term "employer" as solely a round-about way of incorporating common-law respondeat superior principles of master/servant liability. Certainly, if that is all it intended to do, Congress could have used language that did not also make the agent liable for his or her unlawful conduct. Moreover, an employer is not necessarily liable for unlawful discriminatory acts of its employees if those acts create a hostile work environment but do not result in adverse "tangible employment action." Burlington Industries, Inc. v. Ellerth, 118 S. Ct. 2257, 2268-2269 (1998); see also Faragher, 118 S. Ct. at 2292 (In an environmental-harassment case under Title VII where claims are predicated on acts of supervisory employees, it is "an affirmative defense to liability that the employer had exercised reasonable care to avoid harassment and to eliminate it when it might occur, and that the complaining employee had failed to act with like reasonable care to take advantage of the employer's safeguards and otherwise to prevent harm that could have been avoided."); cf. Burlington Industries, 118 S. Ct. at 2269 (under Title VII, "tangible employment action taken by the supervisor" is, automatically, "the act of the employer"). Thus, where vicarious liability is not automatic, giving immunity to those guilty employees as well as to the innocent employer would leave victims of unlawful discrimination without any chance to recover compensatory or punitive damages. This could have hardly been Congress's intent when it wrote this sweeping legislation to prevent discrimination in the workplace and give to victims of such discrimination effective remedies to make them whole. If the dissent's "Hobson's choice" analysis (Dissent at 16) is correct, the employee directed to discriminate in violation of law has no incentive not to comply with the employer's unlawful order. This, clearly, runs counter to congressional intent to root out discrimination trunk and branch. After all, the " 'primary objective'" of laws imposing liability for unlawful discrimination, "like that of any statute meant to influence primary conduct, is not to provide redress but to avoid harm." Faragher, 118 S. Ct. at 2292.¹

The second basis for AIC Security's conclusion that Congress did not intend that "agents" be personally liable for the consequences of their violations of the Americans with Disabilities Act was congressional concern that small employers either not be subjected to liability at all or have their liability limited. See AIC Security, 55 F.3d at 1281. AIC Security concluded that imposition of liability on individuals, with presumably limited resources, would be inconsistent with Congress's desire to protect small business. Ibid. This is reading tea leaves. The legislative history supports an equally persuasive reason for the limitation on the size of employers covered by the Americans with Disabilities Act (as measured by the number of their employees) — the need to establish some criteria that would withstand commerce-clause scrutiny. See Tomka v. Seiler Corp., 66 F.3d 1295, 1322 (2d Cir. 1995) (Parker, J., dissenting) (citing legislative-history materials) (Title VII of the Civil Rights Act). Nevertheless, we are bound by the statute's clear language, and the competing inferences that can be drawn from legislative history remind us of Justice Felix Frankfurter's advice to apply "the canon of construction of the wag who said, when the legislative history is doubtful, go to the statute." Greenwood v. United States, 350 U.S. 366, 374 (1956). Under the statute, an "agent" equals an "employer," which, in turn, equals a "respondent," and 42 U.S.C. § 1981a makes a "respondent" liable for compensatory and punitive damages.

The third reason given by AIC Security for concluding that individual liability for an "agent" was not intended by Congress is that 42 U.S.C. § 1981a has what AIC Security notes is "a sliding scale of caps, increasing the possible award as the number of employees of a liable party increased." Id., 55 F.3d at 1281. Thus, the lowest cap is $50,000 "in the case of a respondent who has more than 14 but fewer than 101 employees." 42 U.S.C. § 1981a(b)(3)(A). AIC Security misreads this provision, however, when it concludes that "Congress enacted no cap for individuals." Id., 55 F.3d at 1281. As we have seen, an "agent" is an "employer" is a "respondent," and the number of employees sets the applicable cap — the cap applies to both individuals who are "agents" under the Americans with Disabilities Act and the businesses for which they work. That the cap might subject an "agent" of a large business to greater potential liability than a counterpart working for a smaller business reflects Congress's attempt to balance various competing considerations that inhere in the crafting of complex legislation to use government power to redress social inequities. Presumably Congress wanted to expose those who discriminate while working for large enterprises to greater potential liability than those who discriminate while working for smaller entities because not only might their individual resources be larger but the prospects of meaningful employer-reimbursement might be better.² In any event, this is what the clear language of the statute requires. Although the congressional scheme might strike some as flawed, and the dissent as "nonsensical," see Dissent at 16, we do not have license to ignore the law. Moreover, it would, in our view, be "unjust" (to use a theme that runs through the dissent's analysis) to hold liable innocent employers (and, as a result, also penalize its innocent employees by diverting resources to pay damages caused by the unlawful discrimination of one of their co-workers) but give immunity to guilty agents; persons who unlawfully discriminate should be liable for the damages they cause, and Congress has so provided.

In sum, we conclude that under the clear language of the Americans with Disabilities Act and Title VII of the Civil Rights Act, Sprenger is an "employer" as that word is used in the Americans with Disabilities Act, and is thus a "respondent" for the purposes of 42 U.S.C. § 1981a.

By the Court. — Order reversed.

1 Moreover, an employee who is fired for failing to discriminate in violation of state or federal statute may have a wrongful-discharge claim against his or her employer. See Bushko v. Miller Brewing Co., 134 Wis. 2d 136, 140-141, 396 N.W.2d 167, 169-170 (1986).

2 The parties do not argue, and this appeal therefore does not present, equal-protection issues.