Franklin Mfg. Co. v. Iowa Civil Rights Commission

Decision Date18 October 1978
Docket NumberNo. 61559,61559
Citation270 N.W.2d 829
Parties30 Fair Empl.Prac.Cas. (BNA) 380, 18 Empl. Prac. Dec. P 8666 FRANKLIN MANUFACTURING COMPANY, Appellee, v. IOWA CIVIL RIGHTS COMMISSION, Appellant.
CourtIowa Supreme Court

Richard C. Turner, Atty. Gen., and Shirley G. Steele, Asst. Atty. Gen., for appellant.

Squires, Sanders & Dempsey, Cleveland, Ohio, and Kathleen A. Reimer, of Rogers, Phillips & Swanger, Des Moines, for appellee.

Reed, Smith, Shaw & McClay, Pittsburgh, Pa., and Leon R. Shearer and Patricia A. Shoff, of Thoma, Schoenthal, Davis, Hockenburg & Wine, Des Moines, for American Chain and Cable Co., Inc., amicus curiae.

Considered en banc.

LeGRAND, Justice.

In this case Kathy John and Vickie Bishop claim they were subjected to discriminatory practices by their employer, Franklin Manufacturing Company (hereafter called Franklin), because of their sex. They were denied disability benefits under Franklin's group insurance plan when they took maternity leaves from their employment. They say this violated § 601A.6, The Code, relating to discriminatory employment practices.

They filed a complaint with the Iowa Civil Rights Commission § 601A.14, The Code. The Commission ruled for the claimants, and Franklin appealed to the district court as authorized by § 601A.15, The Code. The district court entered a decree reversing the Commission. The Commission appealed, and we reverse the district court.

The following issues are raised for determination:

1. Are Iowa courts bound by federal decisions in interpreting its own Civil Rights Act?

2. Did the trial court err in holding that § 601A.12, The Code, exempts Franklin's disability plan from complying with the Iowa Civil Rights Act?

3. Would an interpretation of the Iowa Civil Rights Act to allow the claim of Kathy John and Vickie Bishop be unconstitutional as violative of the Supremacy Clause and the Equal Protection Clause of the Fourteenth Amendment?

4. Does the Labor Management Relations Act as amended, 29 U.S.C. § 151 et seq., preempt the field and preclude the application of Iowa law to alter Franklin's group insurance program, which is part of a lawful collecting bargaining agreement?

The facts are virtually without dispute. Franklin maintained a Group Insurance Plan for its employees. It purported to cover all non-occupational accidental bodily injury or disease. It provided for weekly disability payments according to a schedule set out in the plan. It specifically excluded payment of benefits for "any period of disability due to pregnancy, or resulting childbirth or miscarriage." Both Mrs. John and Mrs. Bishop took maternity leave in 1973. Mrs. Bishop returned to work after an absence of ten weeks. Mrs. John did not return at all after the birth of her child. Both claimants received medical and hospital benefits under the plan, and it is only the weekly disability payments which were denied them. In finding for the claimants, the Commission ordered Franklin to pay Vickie Bishop $278.57 and Kathy John $228.57.

I. One of the grounds relied on by the trial court was that General Electric Co. v. Gilbert, 429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976) dictates a finding for Franklin. In Gilbert the United States Supreme Court held a company insurance plan which excluded disabilities arising out of pregnancy did not constitute sex discrimination in violation of Title VII of the Civil Rights Act of 1964. The case was one of statutory interpretation, limited to construing a federal statute. In Quaker Oats Co. v. Cedar Rapids Human Rights Commission, 268 N.W.2d 862, 866-67 (Iowa 1978), we said we were not bound by Gilbert In construing our own Civil Rights Act, and we declined to follow it.

Our holding in Quaker Oats Disposes of the argument that Gilbert controls the present appeal. We give that matter no further consideration.

II. The second issue is another matter of statutory interpretation concerning the meaning of § 601A.12. The Commission relies heavily upon our opinion in Cedar Rapids Community School District v. Parr, 227 N.W.2d 486 (Iowa 1975), but neither that case nor the later Quaker Oats decision touches the question raised here.

We set out the statute in full:

"The provisions of this chapter (601A) relating to discrimination because of sex or age shall not be construed to apply to any retirement plan or benefit system of any employer unless such plan or system is a mere subterfuge adopted for the purpose of evading the provisions of this chapter."

It is not claimed Franklin's plan is a "mere subterfuge adopted for the purpose of evading" the Civil Rights Act, and the only question therefore is whether this statute exempts all benefit systems or only those relating to retirement. This is a matter of statutory interpretation which involves a determination of legislative intent. Franklin says we should construe the statute to exempt "any Retirement plan or (Any ) benefit system." The Commission urges a more limited interpretation and wants us to say the statute exempts only "any Retirement plan or (Any retirement ) benefit system."

In construing statutes, we observe well established rules. We listed a number of these principles in Iowa National Industrial Loan Co. v. Iowa State Department of Revenue, 224 N.W.2d 437, 440 (Iowa 1974), where we said:

"(1) In considering legislative enactments we should avoid strained, impractical or absurd results. Cedar Memorial Park Cemetery Association v. Personnel Associates, Inc., 178 N.W.2d 343, 347 (Iowa 1970); Olsen v. Jones, 209 N.W.2d 64, 67 (Iowa 1973); Northern Natural Gas Company v. Forst, 205 N.W.2d 692, 695, 696 (Iowa 1973); State v. McGuire, 200 N.W.2d 832, 833 (Iowa 1972); Isaacson v. Iowa State Tax Commission, 183 N.W.2d 693, 695 (Iowa 1971); Harnack v. District Court of Woodbury County, 179 N.W.2d 356, 361 (Iowa 1970); Krueger v. Fulton, 169 N.W.2d 875, 877 (Iowa 1969); Janson v. Fulton, 162 N.W.2d 438, 443 (Iowa 1968).

"(2) Ordinarily, the usual and ordinary meaning is to be given the language used but the manifest intent of the legislature will prevail over the literal import of the words used. Northern Natural Gas Co. v. Forst, supra, 205 N.W.2d at 695.

"(3) Where language is clear and plain, there is no room for construction. In re Johnson's Estate, 213 N.W.2d 536, 539 (Iowa 1973); McKillip v. Zimmerman, 191 N.W.2d 706, 709 (Iowa 1971); In re Brauch's Estate v. Beeck, 181 N.W.2d 132, 134 (Iowa 1970).

"(4) We should look to the object to be accomplished and the evils and mischiefs sought to be remedied in reaching a reasonable or liberal construction which will best effect its purpose rather than one which will defeat it. State v. Johnson, 216 N.W.2d 335, 337 (Iowa 1974).

"(5) All parts of the enactment should be considered together and undue importance should not be given to any single or isolated portion. Cedar Memorial Park Cemetery Association v. Personnel Associates, Inc., Supra; Webster Realty Company v. City of Fort Dodge, 174 N.W.2d 413, 418 (Iowa 1970); Wilson v. Iowa City, 165 N.W.2d 813, 822 (Iowa 1969); Goergen v. State Tax Commission, 165 N.W.2d 782, 785, 786 (Iowa 1969).

"(6) We give weight to the administrative interpretation of statutes, particularly when they are of longstanding. State v. Garland, 250 Iowa 1087 (428), 94 N.W.2d 122 (1959); Northwestern States Portland Cement Co. v. Board of Review of City of Mason City, 244 Iowa 720, 58 N.W.2d 15 (1953)."

See also Doe v. Ray, 251 N.W.2d 496, 504-05 (Iowa 1977); Iowa v. Buckley, 232 N.W.2d 266, 270 (Iowa 1975); Domain Industries, Inc. v. First Security Bank & Trust Co., 230 N.W.2d 165, 169 (Iowa 1975). We are mindful, too, of the direction in § 601A.16 that we should construe the Civil Rights Act liberally to effect its purpose.

We conclude the legislative purpose and intent in enacting § 601A.12 was to exempt only those plans or benefit systems relating to retirement. We are convinced any other interpretation would encourage, rather than inhibit, discriminatory policies. That is not what the legislature intended, and we now hold Franklin's Group Insurance Plan is not exempt from the provisions of chapter 601A, The Code.

III. We next consider whether permitting the claims of Mrs. John and Mrs. Bishop would, as Franklin contends, violate the Supremacy Clause and the Equal Protection Clause of the Fourteenth Amendment.

We believe division I, where we held the federal decisions were not binding on us in construing our own Civil Rights Act, answers the Supremacy Clause argument without need of further discussion.

We find no basis for the Equal Protection argument. Franklin cites Geduldig v. Aiello, 417 U.S. 484, 94 S.Ct. 2485, 41 L.Ed.2d 256 (1975) in support of its position. Geduldig only held the exclusion of pregnancy claims under a California statute quite dissimilar to ours does not violate the Equal Protection Clause. The following language from Geduldig is equally helpful to the Commission in contending the inclusion of pregnancy claims would not violate the Equal Protection provision either:

"There is no evidence in the record that the selection of the risks insured by the program worked to discriminate against any definable group or class in terms of the aggregate risk protection derived by that group or class from the program. There is no risk from which men are protected and women are not. Likewise there is no risk from which women are protected and men are not." (417 U.S. 484, 496, 94 S.Ct. 2485, 2497, 41 L.Ed.2d 264, 265).

A plan which protects men and women equally from disabilities to which each class is separately subject can hardly be said to treat either unequally. That the risks of one class may not be the same as the risks of the other does not raise an Equal Protection problem.

Although not decided on constitutional grounds, City of Los Angeles v. Manhart 435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d 657 (1978), discusses this same problem in connection with unequal retirement benefits...

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