Dyna-Med, Inc. v. Fair Employment and Housing Com'n

Citation220 Cal.Rptr. 158,193 Cal.App.3d 38
Decision Date18 November 1985
Docket NumberNo. D001228,INC,DYNA-ME,D001228
PartiesPreviously published at 193 Cal.App.3d 38 193 Cal.App.3d 38 , Petitioner and Appellant, v. FAIR EMPLOYMENT AND HOUSING COMMISSION, Respondent.
CourtCalifornia Court of Appeals Court of Appeals

McDonald & Allen, Stephen P. McDonald, Rosemary A. Sullivan, San Diego, for petitioner and appellant.

Gibson, Dunn & Crutcher, Willard Z. Carr, Jr., and Pamela L. Hemminger, Los Angeles, amicus curiae on behalf of appellant.

John K. Van de Kamp, Atty. Gen., Andrea S. Ordin, Chief Asst. Atty. Gen., Marian M. Johnston, Deputy Atty. Gen., for respondent.

Judith E. Kurtz, Nancy L. Davis, Feldman, Waldman & Kline, Patricia S. Mar, Martha J. Shaver, Joan Graff, Robert Barnes and Rebecca I. McKee, San Francisco, amici curiae on behalf of respondent.

WORK, Associate Justice.

Dyna-Med, Inc., appeals a judgment denying its petition for a writ of mandate directing the Fair Employment and Housing Commission (Commission) to set aside its decision finding Dyna-Med had fired Linda Olander in retaliation for her filing an employment discrimination complaint under the California Fair Employment Practice Act (FEPA, formerly Lab.Code, § 1410, et seq.), now the California Fair Employment and Housing Act (FEHA, GOV.CODE, § 129002, et seq.), awarding her lost wages, and imposing punitive damages. The primary issue presented by this appeal is whether the Commission may award punitive damages in administrative proceedings under the FEHA. We conclude the FEHA authorizes the Commission to award punitive damages where necessary to effectuate the underlying purposes of the Act.

Dyna-Med further contends the Department of Fair Employment and Housing (Department) should be estopped from proceeding against it because the Department breached its statutory conciliation duty; it was denied due process when the Department was permitted to belatedly raise the issue of punitive damages; the Department and Commission misperceived the burden of proof on Dyna-Med; and the Commission's findings of fact are not supported by the evidence. For the reasons which follow, we affirm the judgment.

I PROCEDURAL BACKGROUND

On March 13, 1978, Olander filed a complaint with the Department 3 alleging her employer, Dyna-Med, discriminated against her with regard to wages and promotional opportunities on the basis of gender in On May 25, 1978, Olander filed a new complaint alleging she was fired in retaliation for her original complaint. The Department formally accused Dyna-Med with retaliating against Olander in violation of former Labor Code section 1420, subdivision (e), now Government Code section 12940, subdivision (f), which prohibits an employer from discharging, expelling or discriminating against any individual because that individual had filed a complaint. An administrative hearing resulted in a proposed decision by the administrative law judge who found the accusation true and ordered Dyna-Med to pay her lost wages of $4,470 plus interest. Thereafter, the Commission allowed the parties further argument, at which time the Department specifically requested punitive damages in the amount of $15,000. The Commission then remanded the case for the taking of additional evidence on the issue of punitive damages. The administrative law judge reaffirmed his earlier findings, but dismissed the exemplary damages allegations, holding such liability under the instant circumstances would violate Dyna-Med's right to due process of law. After Dyna-Med filed a written objection, the Commission rendered its decision ordering Dyna-Med to pay Olander the lost wages plus $7,500 punitive damages. Dyna-Med's petition for a writ of mandamus directing the Commission to set aside its decision was denied.

violation of the FEPA. On May 2, 1978, this complaint was resolved by means of a written settlement agreement entered into by Olander, Dyna-Med and the Department. Approximately four and one half hours after consummating the settlement agreement, Dyna-Med fired Olander.

II FACTUAL BACKGROUND

Dyna-Med was founded in 1967 by its president Glen Hare to manufacture and distribute emergency medical products. In 1969 it initiated a news letter, Emergency Product News (EPN), as part of its marketing effort and later circulated a tabloid newspaper, Western Aviation, and a national magazine, Private Pilot. Olander was hired in March 1974 as an associate editor responsible for coordinating advertising for the publications, writing all news briefs, producing news alert portions of the magazines, and coordinating their production. Shortly after her hiring, Dyna-Med sold Western Aviation and discontinued publishing Private Pilot, leaving EPN as Dyna-Med's principle publication. EPN thus became more sophisticated with an increased subscriber base, evolving into a regularly scheduled magazine published bi-monthly.

In November 1974 Olander was promoted to co-editor of EPN at an increased wage. In May 1976, Olander was promoted to senior editor, and in October 1976 to managing editor. In October 1977, as a result of a substantial merit increase given to her by Dyna-Med, Olander began to earn $16,000 per year. In January 1978, Dyna-Med gave her a letter commending her performance, evidencing her satisfactory performance rating during her entire employment. Performance rating forms were filled out by her supervisors in March and September of 1975, 1976, 1977, and March of 1978, all of which gave her favorable evaluations.

In late 1977, she informed her supervisor, John Buchanan, then a vice-president of Dyna-Med, of her interests in being promoted to the position of publications manager for EPN and a newly acquired second magazine, Police Product News. Buchanan then discussed Olander's interest in the promotion with Hare who advised him of his intent to hire a man to the publications manager position. In December 1977, Jack Qualman was hired as a vice-president of publications, becoming Olander's supervisor. After a several month tenure working with Qualman, Olander filed her sex discrimination complaint because she believed her skills and expertise were superior to those Qualman possessed and hoped the complaint was a vehicle for obtaining the promotion she believed she had been unlawfully denied.

Hare was outraged by Olander's complaint, believing her action disrupted the operations of the company. Hare and other Dyna-Med employees were extremely hostile towards Olander after the filing of the complaint. Hare drafted a written summation of the reasons for terminating Olander which included his anger at the disruption caused by her complaint.

Before executing the settlement agreement, Dyna-Med representatives told the Department representative that Olander would be discharged upon execution of the settlement agreement. The Department representative warned Dyna-Med that termination must rest on just cause and not be retaliatory in nature. Both Dyna-Med's counsel and corporate secretary, Michael Gay, and its vice-president of administration, Betty Lou Soto, knew retaliatory actions were strictly prohibited and Gay had warned Hare of possible retaliation problems in firing Olander.

Nonetheless, Hare fired Olander four and a half hours after executing the settlement agreement providing that Dyna-Med would present Olander with a letter of recommendation from Hare, afford her training for promotional opportunities, would not take discriminatory or retaliatory action for filing her sex discrimination complaint, and guarantee her continued employment so long as she met Dyna-Med's established performance standards.

III THE COMMISSION MAY AWARD PUNITIVE DAMAGES FOR VIOLATIONS OF THE FEHA

Dyna-Med, supported by amicus Merchants and Manufacturers Association (MMA), 4 set forth multiple challenges to the Commission's authority to award punitive damages. In essence, they contend FEHA's language and legislative history preclude awarding punitive damages at the agency level. They stress the statutory language, construed according to settled rules of statutory construction, does not empower the Commission to award punitive damages but limits it to remedial action designed to effectuate the underlying purposes of the act. Absent express legislative authorization, they argue it is the settled rule an administrative agency may not lawfully impose a penalty, whether civil or criminal in character.

Moreover, emphasizing the similarity between the language of Title VII of the Federal Civil Rights Act of 1964 (Title VII) and the FEHA, Dyna-Med relies on federal court precedent holding punitive damages are not available. Additionally, noting the housing discrimination provisions of the FEHA specifically authorize the Commission to order the payment of "punitive damages in an amount not to exceed one thousand dollars ($1,000)"( § 12987, subd. (2)), it argues the express provision for such punitive damages in a parallel statutory scheme strongly suggests the omission of this remedy from the employment discrimination provisions was intentional. (See Commodore Homes Systems, Inc. v. Superior Court, 32 Cal.3d 211, 225, 185 Cal.Rptr. 270, 649 P.2d 912 (dis.).) Consequently, it contends that had the Legislature intended to allow recovery of extraordinary remedies such as punitive damages within the employment context, it could and would have expressly so provided. Dyna-Med asserts its construction is compelled by public policy, claiming injecting punitive damages within this administrative context furthers neither the general principle of equal employment opportunity, nor voluntary resolution and conciliation. Finally, they stress that procedures of administrative agencies often disregard traditional rules of evidence, severely limit discovery and are unfettered by safeguards insuring due process to litigants in the courts.

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2 cases
  • Alameda County General Services Agency v. Fair Employment and Housing Com'n (Stucky)
    • United States
    • California Court of Appeals Court of Appeals
    • 25 Marzo 1987
    ...P.2d 912. Indeed, we note that the question is now before our Supreme Court in a trio of cases: Dyna-Med, Inc. v. Fair Employment & Housing Com. (1985) 184 Cal.App.3d 251, 220 Cal.Rptr. 158 (review granted Jan. 23, 1986 (S32145)); Peralta Community College Dist. v. Fair Employment & Housing......
  • Dyna-Med, Inc. v. Fair Employment and Housing Com'n
    • United States
    • California Supreme Court
    • 23 Enero 1986
    ...v. FAIR EMPLOYMENT AND HOUSING COMMISSION, Respondent. Supreme Court of California, In Bank. Jan. 23, 1986. Prior Report: Cal.App., 220 Cal.Rptr. 158. Appellant's petition for review MOSK, GRODIN, LUCAS and PANELLI, JJ., concur. ...

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