City of Hampton v. Iowa Civil Rights Com'n, 95-769

• Decision Date: 18 September 1996
• Docket Number: No. 95-769,95-769
• Citation: 554 N.W.2d 532
• Parties: 75 Fair Empl.Prac.Cas. (BNA) 739 CITY OF HAMPTON, Appellant, v. IOWA CIVIL RIGHTS COMMISSION, Appellee. Dorothy Abbas, Intervenor-Appellee.
• Court: Iowa Supreme Court

Page 532

554 N.W.2d 532

75 Fair Empl.Prac.Cas. (BNA) 739

CITY OF HAMPTON, Appellant, v. IOWA CIVIL RIGHTS COMMISSION, Appellee.

Dorothy Abbas, Intervenor-Appellee.

No. 95-769.

Supreme Court of Iowa.

Sept. 18, 1996.

C.W. McManigal and Richard R. Winga of Laird, Heiny, McManigal, Winga, Duffy & Stambaugh, P.L.C., Mason City, for appellant.

Thomas J. Miller, Attorney General, and Rick Autry, Assistant Attorney General, for appellee Iowa Civil Rights Commission.

Michael J. Carroll of The James Law Firm, P.C., Des Moines, for intervenor-appellee Dorothy Abbas.

Considered by McGIVERIN, C.J., HARRIS, LARSON and TERNUS, JJ., and SCHULTZ, Senior Judge. ^*

LARSON, Justice.

Dorothy Abbas, a Hampton city employee, filed complaints with the Civil Rights Commission charging sex discrimination and retaliation in violation of Iowa Code chapter 601A (1987). The commission awarded her damages, and the district court affirmed. We affirm, as modified, and remand for further proceedings.

I. The Facts and Proceedings.

Dorothy Abbas worked in the office of the city clerk in Hampton. In August 1987 she filed a complaint with the Iowa Civil Rights Commission alleging sex discrimination by city officials. In October 1989 her complaint was dismissed by the commission after a finding of no probable cause.

While proceedings on this complaint were still pending, Abbas filed a second complaint. This time she claimed that the city clerk, her supervisor, retaliated against her for filing her original discrimination claim by threatening litigation, refusing to speak to her, taking work from her, increasing scrutiny of her work, and reducing her from full-time to part-time employment.

On Abbas's retaliation complaint, the commission found probable cause and referred the case to conciliation. The conciliation attempt failed. Abbas and the commission filed a voluntary dismissal of the individual defendants, leaving the city as the sole defendant on the condition that the city would waive any argument that it was not legally responsible for the actions of its employees.

A contested case hearing was held on July 19, 1991, and in December 1992 the administrative law judge (ALJ) issued a proposed decision and order finding that Abbas had proven retaliation in violation of Iowa Code section 601A.1. The city filed exceptions to the proposed decision. The commission considered the case at its January 19, 1993 meeting. The commission deadlocked three to three, and the matter was automatically carried over to its meeting in February. At that meeting, the commission rejected the ALJ's proposed decision by a three-to-two vote and dismissed the case.

Abbas petitioned for a rehearing. At the commission's March meeting, the members were not able to reach a majority decision, and as a result, Abbas's petition for rehearing was deemed to be denied. Abbas filed a petition for judicial review, and the city intervened.

In February 1994, the district court remanded the matter to the commission so that it could make findings of fact and conclusions of law as required by Iowa Code section 17A.16(1) (1993). The commission, concluding that the order from the district court was a general remand, reconsidered the case in full and voted to adopt the original ALJ decision. The city filed a petition for judicial review, and Abbas intervened. The district court affirmed the final decision of the commission, and the city now appeals.

II. The Issues.

On appeal the city's four issues involve: (1) the scope of the district court's remand to the commission, (2) the commission's finding of retaliation, (3) the amount of damages awarded for emotional distress, and (4) Abbas's request for attorney fees.

A. The scope of the remand. When the civil rights commission entered its final decision, it did not "disclose a sound factual and legal basis for its decision" as required by our cases. Des Moines Indep. Community Sch. Dist. v. Dep't of Job Serv., 376 N.W.2d 605, 610-11 (Iowa 1986); see Taylor v. Iowa Dep't of Job Serv., 362 N.W.2d 534, 537 (Iowa 1985). Without any analysis of the facts or law, the commission merely stated that it rejected the proposed decision. The district court was therefore correct when it remanded the case to the commission for detailed findings and conclusions, and the city does not argue this point.

The city contends, however, that the remand was limited to providing fact-findings and conclusions to support the decision previously made by the commission, i.e., that Abbas was not entitled to relief. Abbas counters that the remand was general and that it allowed the commission to reach a different conclusion, which it did.

We believe that the remand to the commission was general in scope. This conclusion is based in part on the rationale behind the requirement of full agency findings and conclusions, which is explained by one authority:

The obligation to give a reasoned decision is a substantial check upon misuse of power. A decision supported by specific findings is much less likely to be a product of caprice or careless consideration. Requiring articulation of the reasoning process evokes care on the part of the decider.

Bernard Schwartz, Administrative Law § 7.29, at 456 (3d ed.1991) (footnote omitted).

On remand an agency should be free to reach a conclusion different from its original conclusion if the agency's greater "articulation of the reasoning process," id., leads it to that conclusion. We hold, therefore, that unless the order to an agency provides otherwise a remand is general and the agency is free to address the claim anew.

This is supported by our analogous cases involving a remand by this court to the district court. Unless the remand limits the issues to be considered, the case should be reviewed in its entirety. See Mundy v. Olds, 254 Iowa 1095, 1105-06, 120 N.W.2d 469, 475-76 (1963).

Our conclusion that the district court's remand was general in scope is supported by the language of the remand order itself. The court quoted Iowa Code section 17A.16(1), which provides that "final decisions shall include findings of fact and conclusions of law, separately stated." It then stated that

[s]ince this section of the Code was not followed, the case should be remanded for a final decision from the agency, including findings of fact and conclusions of law.

As the commission notes on appeal, the court's remand order says a final decision, not the final decision.

We conclude that the remand was general in scope and that the commission properly considered the entire case.

B. The finding of retaliation. The city attacks the commission's finding of retaliation on two grounds: (1) it applied an erroneous legal test for retaliation, and (2) there was not substantial evidence to support the finding.

1. The legal test. To establish a prima facie case of retaliation, the claimant must show that (1) she was engaged in a statutorily protected activity, (2) she suffered adverse employment action, and (3) a causal connection existed between the first two factors. Hulme v. Barrett, 449 N.W.2d 629, 633 (Iowa 1989) (Hulme I ). The first two elements are not in dispute; the parties disagree only as to the third element, causation.

The ALJ applied a test for causation which was based on a federal case requiring that the claimant merely show that the adverse employment decision "was not wholly unrelated" to the filing of the complaint. See Weaver v. Casa Gallardo, Inc., 922 F.2d 1515, 1525 (11th Cir.1991).

However, the ALJ's proposed decision filed in December 1992 did not refer to a second Hulme case, filed in January of that year, which elaborated on the causation element under Hulme I, stating:

The purpose of the law is to protect employees who utilize civil rights acts to redress their grievances. But the causation standard is a high one. The "causal connection" cited in Hulme [I ] must be a "significant factor" motivating the adverse employment decision.

Hulme v. Barrett, 480 N.W.2d 40, 42 (Iowa 1992) (citation omitted) (Hulme II ).

We said in Hulme II that

the filing of the discrimination claim must be a substantial factor prompting the termination. In other words, the protection afforded by anti-retaliatory legislation does not immunize the complainant from discharge for past or present inadequacies unsatisfactory performance, or insubordination.

Id. at 43.

In Polk v. Yellow Freight System, Inc., 801 F.2d 190 (6th Cir.1986), the federal court discussed the "significant factor" test under a Michigan civil rights statute, stating that

the "significant factor" standard imposes a more lenient standard than the "but for" test urged by defendant [employer], but that it requires a showing of more than a "causal link." A factor can be a "cause" without being "significant." Only the latter is sufficient to show retaliatory discharge.

Polk, 801 F.2d at 199.

We believe there is merit in the city's argument that the "wholly unrelated" test for causation applied by the ALJ was not the equivalent of a "substantial" connection required by Hulme II. However, this argument was not raised before the commission and was therefore waived. Soo Line R.R. v. Iowa Dep't of Transp., 521 N.W.2d 685, 691 (Iowa 1994).

2. The evidence. If supported by substantial evidence, the findings of fact made by the agency are binding on the reviewing court. Iowa Code § 17A.19(8)(f).

Evidence is substantial when a reasonable person could accept it as adequate to reach the same findings. Conversely, evidence is not insubstantial merely because it would have supported contrary inferences. Nor is evidence insubstantial because of the possibility of drawing two inconsistent conclusions from it. The ultimate question is not whether the evidence supports a different finding but whether the evidence supports the findings actually made.

Gaskey v. Iowa Dep't of Transp., 537 N.W.2d 695, 698 (Iowa 1995).

As already noted, to establish a prima facie case of retaliatory...