89 Hawai'i 269, Sam Teague, Ltd. v. Hawai'i Civil Rights Com'n

• Decision Date: 03 February 1999
• Docket Number: No. 19691,19691
• Citation: 971 P.2d 1104
• Parties: 89 Hawai'i 269, 74 Empl. Prac. Dec. P 45,721, 75 Empl. Prac. Dec. P 45,721 SAM TEAGUE, LTD., dba Page Hawaii and Sam Teague, Appellants-Appellants, v. HAWAI'I CIVIL RIGHTS COMMISSION, Amefil Agbayani, Jack Law, Richart Port, and Daphne Barbee-Wooten, all in their official capacities as Commissioners of the Hawaii Civil Rights Commission, Yvette Shaw, and Linda C. Tseu in her official capacity as Executive Director of the Hawaii Civil Rights Commission, Appellees-Appellees
• Court: Hawaii Supreme Court

Page 1104

971 P.2d 1104

89 Hawai'i 269, 74 Empl. Prac. Dec. P 45,721,

75 Empl. Prac. Dec. P 45,721

SAM TEAGUE, LTD., dba Page Hawaii and Sam Teague Appellants-Appellants, v. HAWAI'I CIVIL RIGHTS COMMISSION, Amefil Agbayani, Jack Law Richart Port, and Daphne Barbee-Wooten, all in their official capacities as Commissioners of the Hawaii Civil Rights Commission, Yvette Shaw, and Linda C. Tseu in her official capacity as Executive Director of the Hawaii Civil Rights Commission, Appellees-Appellees

No. 19691.

Supreme Court of Hawai'i.

Feb. 3, 1999.

Dennis W. King (William J. Deeley with him on the brief) on the briefs, Honolulu, for Appellants-Appellants Sam Teague, Ltd., dba Page Hawaii, and Sam Teague.

John Ishihara, on the briefs, Honolulu, for Appellees-Appellees Hawai'i Civil Rights Commission, Amefil Agbayani, Jack Law, Richard Port, Daphne Barbee-Wooten, and Linda C. Tseu.

MOON, C.J., KLEIN, LEVINSON, NAKAYAMA, and RAMIL, JJ.

Opinion of the Court by RAMIL, J.

In this employment discrimination case, appellants-appellants Sam Teague, Ltd., d.b.a. Page Hawaii, and Sam Teague (collectively, "Employer") appeal from the circuit court's final judgment and order affirming the final decision of appellee-appellee Hawai'i Civil Rights Commission (the Commission), filed February 7, 1996. The Commission concluded in its final decision that Employer discriminated against appellee-appellee Yvette Shaw because of her sex (pregnancy and childbirth) in violation of Hawai'i Revised Statutes (HRS) § 378-2(1)(A) (1993) and Hawai'i Administrative Rules (HAR) §§ 12-46-106, 12-46-107 and 12-46-108 (1993). The Commission awarded Shaw $16,500 in back pay, $20,000 in compensatory damages, and $5,000 in emotional distress damages.

On appeal, Employer contends that the circuit court erred by affirming the Commission's final decision because: (1) Shaw's amended complaint was untimely filed violating the statute of limitations in HRS § 368-11 (1993); (2) Employer's policy prohibiting any type of extended leave for one year did not have a disparate impact on women; (3) the termination of Shaw's employment was a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the business; and (4) the back pay awarded to Shaw should have been offset by the unemployment insurance benefits she received. For the reasons set forth below, we disagree with all of Employer's contentions and affirm the circuit court's order and judgment.

I. BACKGROUND

Employer is a two-person business run by its president and sole stockholder, Sam Teague, and an office manager. The business sells and rents pagers and provides paging services. The essential job functions of the office manager include: (1) general office duties, such as opening and closing the office, billing, filing, opening and closing customer accounts, receiving cash amounts under $1,000, giving change, preparing deposits, and collecting overdue accounts; (2) demonstrating and selling the various pagers, equipment, and services provided by the company; (3) programming and testing the pagers; (4) responding to customer complaints about pagers or billing; and (5) general inventory, maintenance, and cosmetic repair of pagers. Typically, a new office manager would require about six to nine months to learn and become competent in these functions.

Employer trained each of the office managers to perform the above-mentioned job functions. During the first six to eight weeks of training, Employer would not leave the office manager unsupervised. After the initial training period, Employer would leave the office manager unsupervised for approximately 1-3 hours per day.

From 1988 to the time of this appeal, Employer has instituted a "no leave" policy for its employees. Under this policy, no "extended" leave would be granted in an employee's first year of employment for any reason. Since December 1990, Employer has also had a policy of requiring a "one year commitment" from all office manager applicants . Under Employer's interpretation of this commitment, a new office manager needed to work for twelve consecutive months without any extended leave.

On January 29, 1992, Jackie Gonzalez Rivera, a former office manager, interviewed Shaw for the office manager position. At this interview, Rivera informed Shaw of the Employer's requirement of a one-year commitment and asked Shaw whether she could make such a commitment. Rivera did not inform Shaw about the company's "no leave" policy and did not explain that the one-year commitment meant working twelve consecutive months without taking any extended leave.

At the time of the interview, Shaw thought that the one-year commitment simply meant being employed with Employer for twelve months. Shaw assumed that leaves of absences for disability, pregnancy, or other emergency purposes were allowed. Based on this understanding, Shaw told Rivera that her husband was stationed in Hawai'i until 1995 and that she would have no problem working for Employer for at least one year. Shaw intended to work for Employer until her husband was transferred out of Hawai'i.

Thereafter, Employer interviewed and asked Shaw whether she could make a one-year continuous commitment to the job. Like Rivera, Employer failed to inform Shaw of the company's "no extended leave" policy and failed to explain that a one-year commitment would be interpreted as working twelve consecutive months with no extended leave. At this interview, Shaw reaffirmed that a one-year commitment would not be a problem.

On January 30, 1992, Shaw underwent a pregnancy test at Tripler Army Medical Hospital. The test results reflected that Shaw was pregnant. On the following day, Employer offered Shaw the office manager position, and Shaw accepted the offer.

Shaw's three-month job performance review was scheduled for May 11, 1992 and then rescheduled to May 12, 1992. Because Shaw was afraid that her pregnancy would be a factor in her review, Shaw decided to inform Teague about her pregnancy after her review.

After receiving a satisfactory review, Shaw informed Employer that she was pregnant and was expecting to deliver in September. Shaw requested a six-week maternity leave. Shocked and angry, Employer expressed to Shaw that her request constituted a breach of her agreement to work for one continuous year. Shaw replied that she was not breaking her one-year commitment and that she planned to return to work for Employer after taking maternity leave. Shaw suggested the following options to Employer: (1) a temporary worker could be hired; (2) Shaw could shorten her leave to four weeks; or (3) Shaw could work part-time during the six-week period. In response, Employer stated that a temporary worker would be unacceptable ¹ and rejected Shaw's other suggestions. Thereafter, Employer decided to end the discussion and told Shaw to "go home and sleep on it." The following day, Shaw again spoke to Employer about her request for maternity leave and explained that she and her husband were not planning to start a family but that "it happened." Employer again stated that it would not work out and that Shaw and her husband "should have used precautions."

Based on these discussions, Employer felt that he had made it clear that he was not going to grant Shaw's request for maternity leave. Shaw, however, felt the issue of her maternity leave was not resolved. Because Employer thought that Shaw was agitated and upset during the May 12 and May 13 discussions, Employer did not want to upset her again and thereafter spoke to her only about business matters.

Shaw's maternity leave was not discussed again until sometime in August 1992 when Employer and Shaw determined the date of Shaw's last day of work before giving birth. Shaw and Employer agreed that September 18, 1992 would be Shaw's last day. By that time, Shaw had mastered seventy-five to eighty percent of the office manager duties. Shaw gave birth on September 14, 1992. Although Shaw did not ask her doctor about the length of her maternity leave, Shaw's doctor would have recommended a six-week maternity leave period.

On September 16, 1992, Shaw phoned Employer with information that she had a daughter. Employer congratulated Shaw and told her that he was lucky to find a replacement for her. From this conversation, Shaw thought Employer had found a temporary replacement.

On September 18, 1992, Employer wrote to Shaw stating, "It will not be possible to hold open your job. The learning curve for the job is simply too great." In addition, Employer enclosed Shaw's final paycheck and a letter of reference. It is undisputed that Employer did not terminate Shaw because of poor work performance or tardiness.

Surprised and upset by Employer's September 18, 1992 letter, Shaw called Employer and asked how she could be terminated even though it was known that she wanted to return to her job. Employer stated that it had already hired a permanent replacement and could not hold the position open. Employer further stated that, as a small business owner, it could refuse to hold her position open.

Sometime in late August or early September 1992, Employer interviewed Susan Funari and offered her the office manager position. Funari began working with Employer on September 15, 1992. Sometime in the beginning of October 1992, Funari informed Employer that she was frustrated with the position and wanted to resign. Funari's last day of work was on October 23, 1992.

Thereafter, Employer began its search for a new office manager. Employer did not contact Shaw to let her know the office manager position was available. Employer eventually hired Marnie Wolfert to replace Funari. Wolfert reported for her first day of work on October 26, 1992.

Six weeks after giving birth, on October 23, 1992, Shaw was cleared to return to work. Later that day, Shaw wrote to Employer, asking to be reinstated to the office manager position on November 2, 1992. Employer...