Linn Co-Operative Oil Co. v. Quigley

305 N.W.2d 729, 46 Fair Empl. Prac. Cas. (BNA) 740, 1981 Iowa Sup. LEXIS 941, 26 Empl. Prac. Dec. (CCH) 31,866

• Court: Supreme Court of Iowa
• Decided: May 13, 1981
• Docket: 65158
• Status: Published

Opinions

REYNOLDSON, Chief Justice.

The district court reversed an order of respondent Iowa Civil Rights Commission (Commission), which found petitioner Linn Co-Operative Oil Company guilty of sex discrimination. The employer fired respondent Mary Quigley from her position as a part-time gas station attendant. The basic issue in this appeal is whether the Iowa Administrative Procedure Act (IAPA) was applicable to the district court proceeding. We find it was not, and affirm.

Quigley’s sex discrimination complaint was filed with the Commission on February 27, 1975. It was made under section 601A.7(lXa), The Code 1973, v/hich provided:

It shall be an unfair or discriminatory practice for any:

(a) Person ... to discharge any employee ... because of the ... sex ... of such ... employee, unless based upon the nature of the occupation.

When this complaint was filed, appeals from agency adjudications were triable de novo in district court pursuant to section 601A.10(6), The Code 1973.

The IAPA, Code chapter 17A, became effective July 1, 1975. A hearing on Quig-ley’s complaint was not held until 1977, and the Commission did not adopt the hearing officer’s findings, conclusions, and recommended order until April 1978.

Within thirty days of the Commission’s decision, the employer filed a petition in equity in district court, requesting issues raised in the Quigley complaint be reviewed de novo as provided in section 601A.10(6), The Code 1973. Notice of the petition was served personally on the Commission and Quigley.

January 30, 1979, Judge Vietor filed an order of remand for further proceedings, in which he noted the remand request was submitted “upon oral arguments of counsel.” This order characterized the proceeding as “a judicial review proceeding under the authority of Iowa Code Section 17A.19,” despite the fact review expressly was sought under the 1973 Code, not under the IAPA. Section 601A.10(5), The Code 1973, authorized a party to “move the court to remit the case to the commission ... for the purpose of adducing additional ... evidence.” But Judge Vietor apparently relied instead on section 17A.19(8) of the IAPA, which also authorizes such remand.

Upon remand to the Commission, a hearing was held at which evidence concerning employee time records was introduced. The hearing officer’s recommended decision on remand was adopted by the Commission August 9,1979. The employer then amended its petition in equity to seek judicial review of this order.

The Commission contended in district court that judicial review was governed by the IAPA, not by section 601A.10. Under the IAPA, the employer would not be entitled to de novo review and would be entitled to relief only by alleging and establishing one of the grounds specified in section 17A.19(8). None of the section 17A.19(8) grounds was alleged in the employer’s petition.

The district court held the IAPA inapplicable and, reviewing the evidence de novo, found there was no chapter 601A sex discrimination.

I. Applicability of the IAPA in this controversy turns on section 17A.23. In relevant part it provides:

The Iowa administrative procedure Act shall be construed broadly to effectuate its purposes. This chapter shall also be construed to apply to all agencies not expressly exempted by this chapter or by another statute specifically referring to this chapter by name; and except as to proceedings in process on July 1, 1975, this chapter shall be construed to apply to all covered agency proceedings and all agency action not expressly exempted by this chapter or by another statute specifically referring to this chapter by name.

(Emphasis supplied.) Under the above statute, the IAPA does not apply to “proceedings in process on July 1,1975.” Thus all of the Act, including its review provision, is inapplicable where a “proceeding” was commenced before the effective date of the IAPA, July 1, 1975.

To determine whether certain events initiate a proceeding, it seems logical to apply the case law existing at the time of those events. If a proceeding was “in process” prior to July 1, 1975, it obviously was a proceeding when viewed in light of pre-IAPA principles. Yet the Commission argues this determination should be made by applying the IAPA and cases interpreting it, even though that legislation did not exist at the time the complaint in this case was filed.

February 27, 1975, when Quigley filed this complaint, there were no statutes defining “contested case,” “party,” or “person.” In Estabrook v. Iowa Civil Rights Commission, 283 N.W.2d 306 (Iowa 1979), we merely determined a contested case evi-dentiary hearing was not required under circumstances the record disclosed. We did not interpret section 17A.2(2) to mean that only a “contested case” is a proceeding. Similarly, the language of section 17A.1(2) (“contested case proceedings”) is not helpful in classifying an action taken before its enactment.

In ascribing a meaning to “proceedings in process,” undefined in chapter 17A, we reject the principle that implies the phrase must be interpreted within the confines of the IAPA. Cases like Goergen v. State Tax Commission, 165 N.W.2d 782, 785 (Iowa 1969), are of little benefit because they merely restate the settled principle that all parts of the statute should be read together to determine its meaning, not that the meaning of otherwise unidentified terms must be gleaned exclusively from within the statute under scrutiny.

Other rules of interpretation are more applicable. Several of our decisions hold that when a statute contains no definition of words used, they are to be construed according to their “approved usage.” See, e. g., In Interest of Hoppe, 289 N.W.2d 613, 616 (Iowa 1980); State ex rel. Turner v. Drake, 242 N.W.2d 707, 709 (Iowa 1976); State v. Kool, 212 N.W.2d 518, 520 (Iowa 1973). An “approved usage” surely would include prior judicial interpretations. “In construing a statute we must be mindful of the state of the law when it was enacted ....” Egan v. Naylor, 208 N.W.2d 915, 918 (Iowa 1973). “We assume the legislature knew the existing state of the law and prior judicial interpretations of similar statutory provisions. We assume, too, its use of terms was in the accepted judicially established context unless there is clear evidence to the contrary.” Jahnke v. Incorporated City of Des Moines, 191 N.W.2d 780, 787 (Iowa 1971). There is no “clear evidence” in this case that the legislature intended a section 17A.23 “proceeding” to mean anything different from its meaning under the then-existing state of the law and prior judicial interpretations.

It follows that our case law antedating the effective date of the IAPA is determinative. In Iowa Civil Rights Commission v. Massey-Ferguson, Inc., 207 N.W.2d 5 (Iowa 1973), a civil rights case, we had before us a statute of limitation question arising under section 105A.9(15), The Code 1966, which later became section 601A.9(15), The Code 1973. We referred to the filing of the complaint as an administrative proceeding:

The time in which an administrative proceeding may be brought is often regulated by the statute providing for such proceeding, and a failure to comply with such statute may bar the administrative proceeding and any judicial proceeding which depends thereon.

Id. at 9-10. Our observation in Massey-Ferguson that the complaint launches a “proceeding” is supported by Parker v. Califano, 561 F.2d 320, 324, 327-28 (D.C.Cir. 1977) (under Civil Rights Act statute permitting attorney fee award “in any action or proceeding,” held, attorney fees were allowable for services leading to filing complaint under a proper broad construction of “proceeding”); United States v. Vixie, 532 F.2d 1277, 1278 (9th Cir. 1976) (an administrative investigation is a “proceeding” within the meaning of statute relating to obstructing agency proceedings); Cardinali v. Planning Board, 373 A.2d 251, 253 (Me.1977) (application for subdivision submitted prior to moratorium ordinance was encompassed within the general savings clause definition of proceeding “pending”); Banach v. State Commission on Human Relations, 277 Md. 502, 509-10, 356 A.2d 242, 247 (1976) (“The word ‘proceedings’ is a term of broad scope, encompassing both the investigative and adjudicative functions of an administrative agency.”). The provisions of the federal Civil Rights Act make it clear that filing a complaint before a state or local agency with authority to grant relief from discriminating practices is the commencement of a “proceeding.” See, e. g., Parker, 561 F.2d at 327; 42 U.S.C. § 2000e-5(c) (1976).

When the legislature enacted the IAPA it identified, for the first time in this jurisdiction, a “contested case proceeding,” and certainly recognized its limited nature. Had the legislature wanted to confine “proceedings in process” to contested case proceedings in process it easily could have used that then-familiar language in section 17A.23. We hold the filing of Quigley’s complaint triggered a proceeding that was “in process” when the IAPA became the law; consequently, under section 17A.23, the provisions of that legislation do not apply in this controversy.

II. Because the review provisions of IAPA section 17A.19 do not apply in this case, the district court properly reviewed the evidence de novo. There was ample evidence to support its finding that Quigley was not discriminated against because of her sex. A female former employee who held the same job testified females found no discriminatory practices by this employer. Quigley was hired in preference to two male applicants. It is unreasonable to speculate that this employer suddenly reversed its nondiscriminatory philosophy, expressed in its company manual, in terminating Quigley’s employment.

The evidence fully substantiated district court’s finding that Quigley was terminated because the work slacked off and because she was creating disciplinary problems. While none of the employees was blameless, she provided additional grounds. Her immediate supervisor testified:

Q. What were her failings? A. ... I remember several cold, rainy days where if we were busy, we’d have all three of us out there ... and sure, you all got wet

Q. What would Mary [Quigley] do at these times? A. Well, she would come in, sit down. I remember several times she just came in and sat down with her back to the heater and to the drive, and it was too cold to do anything, she said.

Q. She would let the rest of you do all the work? A. Yes.

Q. Because she was too cold? A. Yes, that’s what she said.

Q. Did they [other employees] complain to you about her not doing her share of the work? A. Yes, they would.

The evidence is unrefuted that after Quig-ley was fired most of the disciplinary problems ceased.

It is equally apparent the hearing officer (whose findings and order the Iowa Civil Rights Commission adopted) improperly imposed the burden of proof on the employer. The officer found Quigley had established a prima facie case by proving (1) she was a female and (2) when there was a cutback in work force she was terminated, and “similarly situated” males, and males with less seniority, were not terminated. Of course, district court did not find the males were “similarly situated,” in view of Quigley’s conduct. Moreover, the hearing officer found that

[t]o overcome the prima facie case Respondent [employer] had to show either that sex was a bona fide occupational qualification, that the termination was a business necessity or that Complainant [Quigley] was terminated pursuant to a rational and neutral business policy applied to all employees.

(Emphasis supplied.)

We have found no rule that thus shifts the burden of proof to the employer. Everyone is presumed to have discharged his or her duty, whether legal or moral, until the contrary is made to appear. Dorf v. Relles, 355 F.2d 488, 492 (7th Cir. 1966); Baker v. Beal, 225 N.W.2d 106, Í10 (Iowa 1975). In these cases, “[e]omplainant has [the] burden of proof, not the respondent.” Iron Workers Local 67 v. Hart, 191 N.W.2d 758, 772 (Iowa 1971). The burden of persuasion never shifts. McDowell v. Town of Clarksville, 241 N.W.2d 904, 908 (Iowa 1976).

In Texas Department of Community Affairs v. Burdine, 450 U.S. -, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), the Supreme Court reversed the United States Court of Appeals for the Fifth Circuit for utilizing the same burden-shifting technique employed by the hearing officer in the case before us. The circuit court had imposed on the employer the burden to prove by a preponderance of the evidence the existence of legitimate nondiscriminatory reasons for the challenged action. The Supreme Court, holding the court of appeals had misinterpreted its decision in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), reiterated that a prima facie case is rebutted when the employer merely produces “admissible evidence which would allow the trier of fact rationally to conclude that the employment decision had not been motivated by discriminatory animus.” Burdine, 450 U.S. at -, 101 S.Ct. at 1096, 67 L.Ed.2d at 218 (emphasis supplied).

“The defendant need not persuade the court that it was actually motivated by the proffered reasons.” Id. at -, 101 S.Ct. at 1094, 67 L.Ed.2d at 216. The Burdine Court held:

The plaintiff retains the burden of persuasion. She now must have the opportunity to demonstrate that the proffered reason was not the true reason for the employment decision. This burden now merges with the ultimate burden of persuading the court that she has been the victim of intentional discrimination. She may succeed in this either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer’s proffered explanation is unworthy of credence.

Id. at -, 101 S.Ct. at 1095, 67 L.Ed.2d at 217.

Had the hearing officer applied the case law of this jurisdiction and the rationale the Supreme Court later applied in Burdine, the officer and the district court well may have arrived at the same result.

We affirm the district court ruling that the complaint be dismissed.

AFFIRMED.

All Justices concur except McCORMICK, J., who dissents, and UHLENHOPP, J., who joins division I of the dissent and SCHULTZ, J., who takes no part.