Frank v. American Freight Systems, Inc.

• Decision Date: 14 January 1987
• Docket Number: No. 85-1640,85-1640
• Citation: 398 N.W.2d 797
• Parties: 48 Fair Empl.Prac.Cas. (BNA) 1573, 42 Empl. Prac. Dec. P 36,836, 1 A.D. Cases 1006 Glenn FRANK, Appellee, v. AMERICAN FREIGHT SYSTEMS, INC., Appellant, and Baumberger & Sons Trucking, Inc., Defendant.
• Court: Iowa Supreme Court

Page 797

398 N.W.2d 797

48 Fair Empl.Prac.Cas. (BNA) 1573,

42 Empl. Prac. Dec. P 36,836, 1 A.D. Cases 1006

Glenn FRANK, Appellee, v. AMERICAN FREIGHT SYSTEMS, INC., Appellant and Baumberger & Sons Trucking, Inc., Defendant.

No. 85-1640.

Supreme Court of Iowa.

Jan. 14, 1987.

Rehearing Denied Feb. 16, 1987.

Donald A. Wine and Kimberly K. Mauer of Davis, Hockenberg, Wine, Brown & Koehn, Des Moines, for appellant.

Kevin M. Abel of Belin, Harris, Helmick, Tesdell, Lamson, Blackledge & McCormick, for appellee.

Considered by REYNOLDSON, C.J., and HARRIS, LARSON, SCHULTZ and CARTER, JJ.

LARSON, Justice.

Glenn Frank was turned down as a truck driver for American Freight Systems, Inc. because of a back problem which, under company rules, automatically excluded him from consideration. Frank filed a complaint with the Iowa Civil Rights Commission, alleging disability discrimination under Iowa Code section 601A.6 (1981). The commission did not rule on the merits of the complaint but issued a "right to sue" letter, Iowa Code § 601A.16, and Frank pursued his claim through an original action in district court.

The district court agreed that Frank had been the victim of discrimination and awarded him back pay, front pay, damages for emotional distress and mental anguish, and attorney fees. It also ordered American Freight to employ him and to cease and desist similar hiring practices. American Freight appealed; we now reverse and remand.

At the time Frank applied for the job, he was forty-nine years old and had had over twenty years experience as a driver. In 1966, his lower back was injured, and a laminectomy and fusion were performed on his spine. Frank continued to drive trucks and to do heavy lifting. During this time, he passed several physical examinations required for drivers in interstate commerce.

The hiring rule under attack here, prohibiting employment of persons with certain back conditions, is embodied in American Freight's special "Back X-ray Report" form. This form is required to be completed by all driver applicants at American Freight. Three categories of back abnormalities are listed: Category "A," "abnormalities of minor importance," Category "B," "abnormalities of increased importance," and Category "C," which contains the rule at issue here. Category "C" lists sixteen "abnormalities indicating substandard risk for sustained heavy work" and adds this note: "Any condition here automatically disqualifies." In Frank's case, one of these listed conditions, "prior back surgery," was noted by the x-ray examiner, and his driver's application immediately hit a dead end. He was denied employment despite his protestations that his back problems had not impaired his ability to work as a truck driver.

I. Scope of Review.

Our first consideration is the scope of review. This case was initially filed in equity to force the hiring of Frank, and it was tried throughout as an equitable action. Under our general rule, we will treat a case on appeal in the same manner it was tried in district court. See Life Investors' Insurance Co. v. Heline, 285 N.W.2d 31, 35 (Iowa 1979); Henderson v. Hawkeye-Security Insurance Co., 252 Iowa 97, 100, 106 N.W.2d 86, 88 (1960). Our review must therefore be de novo. See Iowa R.App.P. 4. It should be noted that this scope of review in discrimination cases is unusual; such cases ordinarily arise as challenges of actions of the civil rights commission and thus are reviewable on a substantial evidence basis. See, e.g., Consolidated Freightways v. Cedar Rapids Civil Rights Commission, 366 N.W.2d 522 (Iowa 1985); Sommers v. Iowa Civil Rights Commission, 337 N.W.2d 470 (Iowa 1983); King v. Iowa Civil Rights Commission, 334 N.W.2d 598, 601 (Iowa 1983); Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162 (Iowa 1982). Under the unusual circumstances of this case, the parties agree our review is de novo.

II. The Statute and Rules.

Iowa Code section 601A.6 provides, in part:

1. It shall be an unfair or discriminatory practice for any:

a. Person to refuse to hire, accept, register, classify, or refer for employment, to discharge any employee, or to otherwise discriminate in employment against any applicant for employment or any employee because of the age, race, creed, color, sex, national origin, religion or disability of such applicant or employee, unless based upon the nature of the occupation. If a disabled person is qualified to perform a particular occupation, by reason of training or experience, the nature of that occupation shall not be the basis for exception to the unfair or discriminating practices prohibited by this subsection.

(Emphasis added.)

"Disability" is defined in Iowa Code section 601A.2(11) as

the physical or mental condition of a person which constitutes a substantial handicap. In reference to employment, under this chapter, "disability" also means the physical or mental condition of a person which constitutes a substantial handicap, but is unrelated to such person's ability to engage in a particular occupation.

Further definitions are provided by rules of the Iowa Civil Rights Commission at 240 Iowa Admin.Code § 6.1, as follows:

6.1(1) The term "substantially handicapped person " shall mean any person who has a physical or mental impairment which substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment.

....

6.1(4) The term "has a record of such an impairment " means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.

6.1(5) The term "is regarded as having an impairment " means:

a. Has a physical or mental impairment that does not substantially limit major life activities but that is perceived as constituting such a limitation;

b. Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or

c. Has none of the impairments defined to be "physical or mental impairments," but is perceived as having such an impairment.

(Emphasis added.)

III. The Disparate Impact Theory.

An employment rule or practice might be neutral on its face yet have the effect of discriminating against a particular individual. For example, an apparently innocuous rule imposing minimum size standards for employees might work to the disadvantage of women. See Dothard v. Rawlinson, 433 U.S. 321, 97 S.Ct. 2720, 53 L.Ed.2d 786 (1977). Or a rule imposing minimum educational or intelligence standards might have the effect of discriminating against disadvantaged blacks. Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). Such a rule, neutral on its face but having an impact along sex, religious, or racial grounds, is evaluated under the "disparate impact" test. However, a rule which discriminates on its face is evaluated under the test of "disparate treatment." See International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335, n. 15, 97 S.Ct. 1843, 1854, n. 15, 52 L.Ed.2d 396, 415 n. 15 (1977). The disparate treatment type of discrimination is said to be the most easily understood. Id. See generally Nichols, Iowa's Law Prohibiting Disability Discrimination in Employment: An Overview, 32 Drake L.Rev. 273, 383-84 (1982-83).

The trial court in the present case, while expressing some doubt about the applicability of the disparate impact analysis, nevertheless discussed it in its opinion and relied on it as an alternative basis for its ruling. On appeal, American Freight argues that this was erroneous and that the rule in question must be analyzed only under the test for disparate treatment. We agree. The actual purpose of the rule is just what it purports to be--to prevent the hiring of applicants with certain back conditions. In view of this, we need not search for any hidden motives or disparate impacts but analyze the case under a disparate treatment analysis.

IV. The Justification for the Hiring Rule--The Nature of the Business Defense.

American Freight argues that Frank is actually disabled under Iowa Code section 601A.2(11) and commission rules 6.1(1) and (4), quoted above. Frank argues that he is not actually disabled but that American Freight perceives him to be and that he is therefore considered to be disabled for discrimination purposes under commission rules 6.1(1) and (5). In either event, Frank is "disabled" as that term is used in Iowa Code section 601A.6. The key issue is whether American Freight was justified in refusing his employment application on the basis of this disability.

A complainant asserting employment discrimination has the burden of persuasion to establish the complaint by a preponderance of the evidence, Consolidated Freightways, 366 N.W.2d at 530; King, 334 N.W.2d at 601, and the ultimate burden of persuasion never shifts. King, 334 N.W.2d at 602; Linn Co-Operative Oil Co. v. Quigley, 305 N.W.2d 729, 733 (Iowa 1981).

The procedure in discrimination cases is as follows: (1) The complainant must first establish a prima facie case of discrimination; (2) the employer may then show a "legitimate, non-discriminatory reason" for its conduct; and (3) the complainant may then attack this reason as only a pretext for discrimination, or one unworthy of belief. Consolidated Freightways, 366 N.W.2d at 530; King, 334 N.W.2d at 601-03.

Under Iowa Code section 601A.6, there is another alternative by which a person claiming discrimination on the basis of a disability, as opposed to other forms of discrimination, may negate the effect of the disability. That is to show that "by reason of training or experience" the person is qualified to perform the job, notwithstanding the disability. Iowa Code § 601A.6(1)(a) (last unnumbered sentence).

In applying these tests to the present case, the first question is whether a prima facie showing had been made by Frank....