In re Accusation of Department of Fair Employment and Housing, 041211 CAFEHC, E-200809-G-0626-00-ape

Docket Nº:E-200809-G-0626-00-ape, C 09-10-039, 11-06
Opinion Judge:Joan Herrington, Administrative Law Judge.
Party Name:In the Matter of the Accusation of the DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING v. TRUDY'S INC., aka TRUDY'S BRIDES, Respondent.
Case Date:April 12, 2011
Court:Fair Employment and Housing Commission of California
 
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In the Matter of the Accusation of the DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING

v.

TRUDY'S INC., aka TRUDY'S BRIDES, Respondent.

DARLENE CAMPAGNA, Complainant.

Nos. E-200809-G-0626-00-ape, C 09-10-039, 11-06

Fair Employment and Housing Commission of California

April 12, 2011

DECISION

Joan Herrington, Administrative Law Judge.

The Fair Employment and Housing Commission hereby adopts the attached Proposed Decision as the Commission's final decision in this matter.

Any party adversely affected by this decision may seek judicial review of the decision under Government Code sections 11523 and 12987.1, Code of Civil Procedure section 1094.5, and California Code of Regulations, title 2, section 7437. Any petition for judicial review and related papers shall be served on the Department, the Commission, respondents, and complainant.

Fair Employment and Housing Commission

George Woolverton

Linda NG

Kristina Raspe

Patricia Perez

Stuart Leviton

PROPOSED DECISION

Administrative Law Judge Joan Herrington heard this matter on behalf of the Fair Employment and Housing Commission on August 23, 25, and 26, 2010, in San Jose, California. Bruce Carter, Staff Counsel, and Susan Saylor, Chief Counsel, represented the Department of Fair Employment and Housing. Roger Mason, Esq., and Caitlin Kauffman, Esq. of Sweeney, Mason, Wilson, & Bosomworth, L.L.C., represented respondent Trudy's Inc. Complainant Darlene Campagna and respondent's representative, Roger Blechman, attended the proceedings throughout.

At the conclusion of the evidentiary hearing and receipt of the transcripts, the parties' post-hearing briefs were timely filed, and on December 2, 2010, the matter was deemed submitted. (Cal. Code Regs., tit. 2, § 7432(b).)

After consideration of the entire record, the administrative law judge makes the following findings of fact, determination of issues, and order.

FINDINGS OF FACT

Parties and Jurisdiction.

1. On February 23, 2009, complainant Darlene Campagna (complainant or Campagna) filed a written, verified complaint with the Department of Fair Employment and Housing (DFEH) against Trudy's, Inc., aka [sic] Trudy's Brides. The complaint alleged that respondent terminated complainant's employment because of her age, disability, and medical condition (lung cancer), in violation of the Fair Employment and Housing Act, Government Code section 12900, et seq. (FEHA).

2. The DFEH is an administrative agency empowered to issue accusations under Government Code section 12930, subdivision (h). On February 22, 2010, Phyllis W. Cheng, in her official capacity as Director of the DFEH, issued an accusation against respondent Trudy's, Inc., aka [sic] Trudy's Brides.

3. The accusation alleged that Trudy's, Inc. terminated Campagna's employment because of her age, disability, and medical condition (lung cancer), failed to engage in a timely, good faith, interactive process with Campagna regarding reasonable accommodation of her medical condition and perceived disability (lung cancer), and failed to take all reasonable steps to prevent discrimination from occurring, in violation of Government Code section 12940, subdivisions (a), (n), and (k), respectively. The DFEH further alleged that Trudy's, Inc. had a policy of discharging employees with higher medical insurance premium costs, which had a disparate impact on older employees, and those with a medical condition, in violation of Government Code section 12940, subdivision (a).

4. On August 23, 2010, at the beginning of the hearing, the DFEH withdrew the charge of disability discrimination in violation of Government Code section 12940, subdivision (a), against Trudy's, Inc., but continued to prosecute the charge of medical condition discrimination, in violation of Government Code section 12940, subdivision (a).

5. At all relevant times, Trudy's, Inc., doing business as Trudy's Brides (respondent or Trudy's Brides) was a women's bridal store located in Campbell, California, that was wholly owned and operated by Trudy Blechman and her husband, Roger Blechman (Blechman, and collectively+ the Blechmans). Trudy's Brides regularly employed five or more persons, and thus, was an " employer" within the meaning of Government Code, sections 12926, subdivision (d), 12940, subdivisions (a), (n) and (k).

6. Campagna was a Bookkeeper for Trudy's Brides, and was fired when she was 66 years old and had recently completed post-surgical chemotherapy for lung cancer.

Campagna's Work History with Trudy's Brides

7. On December 20, 1987, Trudy Blechman hired Campagna as a part-time Bridal Consultant at Trudy's Brides.

8. In 1992, Campagna transferred to the position of full-time Receptionist/Sales Clerk at the front desk at Trudy's Brides.

9. In 1993, Campagna was promoted to the position of Bookkeeper at Trudy's Brides.

10. Campagna's duties as Bookkeeper included calculating pay and commissions, reconciling the cash registers, making bank deposits, recording accounts payable, and other duties as needed. Campagna, like other staff at Trudy's Brides, often worked from home.

11. Trudy's Brides' office staff consisted of Campagna, Cathy Mitchell, Blechman, and the Blechmans' son, Steven Blechman. Campagna worked closely with Mitchell, the part-time Accounting Assistant who kept Trudy's Brides' cash flow and merchandise payables records. Even though Mitchell was almost 20 years younger than Campagna, they became best friends during the 20 years they worked together at Trudy's Brides.

12. As a small family-owned business, Trudy's Brides did not conduct annual personnel evaluations, but the Blechmans regularly complimented Campagna on her job performance.

13. In 2006, Trudy's Brides began experiencing an economic downturn that forced Blechman to cut costs and loan money to the company each year thereafter to cover the shortfall. Under Blechman's cost-cutting plan, Trudy's Brides reduced staff, converted as many full-time positions as possible to part-time positions, and cut sick pay and dental benefits, but continued its policy of paying a matching contribution of up to 4% to an employee's 401K retirement plan.

14. Although Blechman considered requiring respondent's employees to contribute to the cost of their medical insurance, Trudy's Brides continued to provide full health care coverage for its 11 employees who worked at least 32 hours per week for 12 continuous months. Respondent's health care costs could increase or decrease by 10 percent using a risk adjustment factor that rated the health status of the group. The premiums for each covered employee also increased in 10 year increments until the employee reached age 40 years old, then in five-year increments until the employee reached age 65 years old. Respondent's medical insurance carrier, Blue Shield, offered substantially cheaper supplemental medical insurance for eligible employees who transferred their primary medical insurance coverage to Medicare.

15. Each spring, in preparation for Trudy's Brides' renewal of its medical insurance policy on June 1, Blechman reviewed Trudy's Brides' medical insurance coverage with its insurance broker, Jeffrey Seders. Trudy's Brides' medical insurance renewal proposal warned that " Final rates will be determined upon enrollment based on the actual census and health status of the group." Blechman discussed the impact that the health status of the group could have on the risk adjustment factor with respondent's insurance broker, Jeffrey Seders. Further, Blechman knew that Trudy's Brides' health care costs had fluctuated based on the risk adjustment factor. For example, in 2002, Trudy's Brides' health cost had increased 21 percent due in part to an increase in the risk adjustment factor from 0.95 to 1.05.

16. On July 31, 2007, Trudy's Brides' health care provider, Blue Shield, notified Blechman that Campagna's premium would increase from $622 per month to $823 per month as of October 1, 2007, because she would turn 65 years old on September 17, 2007. Mitchell's medical insurance premium was the next highest at $539 per month, but included an extra $249 per month to cover her two children. The mean medical insurance premium for Trudy's Brides' employees at that time was $290 per month.

17. In the fall of 2007, despite their close personal friendship, Blechman began considering terminating Campagna's employment as a cost-cutting measure, but decided to wait and see if sales during the busy season (January to May) would make further cost-cutting measures unnecessary.

18. On February 25, 2008, Campagna sought medical treatment from her primary care physician, Dr. Masada (full name unspecified in the record), for a persistent cough. An x-ray revealed a suspicious mass in her right upper lung that was initially diagnosed as a lung infection, and treated with antibiotics.

19. When Campagna's cough worsened, Dr. Masada referred her to a pulmonary specialist, Dr. Chariotte (full name unspecified in the record), who diagnosed Campagna's lung cancer based on her x-ray on April 2, 2008. Campagna refused to believe that she had lung cancer, so Dr. Chariotte performed scans of Campagna's lungs on April 10 and 25, 2008, that revealed a soft tissue mass consistent with lung cancer.

20. On April 30, 2008, Paul Cipriano, M.D., performed a needle biopsy of the suspicious nodule in Campagna's right upper lung, and the biopsy results convinced even Campagna that she had lung cancer.

21. On May 5, 2008, Campagna told her family about her lung cancer and pending surgery.

22. On May 9, 2008, Steven M. Swartz, M.D. surgically removed an a denocarcinoma, stage IB...

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