Goodyear Tire & Rubber Co. v. Department of Industry, Labor and Human Relations

• Citation: 273 N.W.2d 786,87 Wis.2d 56
• Decision Date: 22 November 1978
• Docket Number: No. 77-650,77-650
• Parties: , 20 Fair Empl.Prac.Cas. (BNA) 1794, 19 Empl. Prac. Dec. P 8945 GOODYEAR TIRE & RUBBER COMPANY, Petitioner-Appellant, v. DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, State of Wisconsin, Respondent.
• Court: Court of Appeals of Wisconsin

Page 786

273 N.W.2d 786

87 Wis.2d 56, 20 Fair Empl.Prac.Cas. (BNA) 1794,

19 Empl. Prac. Dec. P 8945

GOODYEAR TIRE & RUBBER COMPANY, Petitioner-Appellant, v. DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, State of

Wisconsin, Respondent.

No. 77-650.

Court of Appeals of Wisconsin.

Argued Sept. 8, 1978.

Opinion Filed Nov. 22, 1978.

Joseph A. Melli, Madison (argued), for appellant; Dennis M. White and Melli Shiels, Walker & Pease, S. C., Madison, on brief.

Charles D. Hoornstra, Asst. Atty. Gen. (argued), for respondent; Bronson C. La Follette, Atty. Gen., on brief.

Before GARTZKE, P. J., and BABLITCH and DYKMAN, JJ.

GARTZKE, Presiding Judge.

This is an appeal by Goodyear Tire & Rubber Company from the judgment of the Dane County Circuit Court, the Honorable P. Charles Jones presiding, affirming the decision and order of the Department of Industry, Labor & Human Relations. We affirm.

Goodyear is an employer in interstate commerce subject to the National Labor Relations Act (NLRA), 29 U.S.C. sec. 151 Et seq. It negotiated a sickness and disability plan with a union representing certain of its employees. The plan is a welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. sec. 1001 Et seq.

Goodyear's plan provides weekly disability benefits for the duration of a disability not to exceed 52 weeks, except that in the case of disabilities due to pregnancy weekly benefits are limited to six weeks. ¹

Two of appellant's employees, Julia L. Lince and Vicki Bloedow, became pregnant during their employ. They sought and were denied benefits exceeding six weeks disability under the negotiated sickness and disability plan. August 28, 1973, Julia A. Lince filed her complaint against Goodyear with the department alleging that the plan discriminated against her on the basis of sex. October 26, 1973, Vicki Bloedow filed a similar complaint. The complaints were consolidated for hearing by the department.

November 22, 1976, the department found the disparate treatment of pregnant women under the plan is sex discrimination within the meaning of the Wisconsin Fair Employment Act, secs. 111.31-111.37, Stats., 1973, and ordered appellant to cease and desist from excluding pregnancy disabilities from the full benefits of the plan.

The circuit court affirmed the decision and order of the department.

The issues are:

1. Should holdings of the Wisconsin Supreme Court that pregnancy classifications may constitute sex discrimination under sec. 111.32(5)(g) 1, Stats., 1973, be reversed?

2. Does the Employment Retirement Income Security Act of 1974 preempt Wisconsin's sex discrimination law, sec. 111.32(5)(g)1, Stats.?

3. Does the National Labor Relations Act preempt Wisconsin's sex discrimination law, sec. 111.32(5)(g)1, Stats.?

I BACKGROUND

Ms. Lince and Ms. Bloedow began their maternity leaves in 1972 and 1973, respectively. All references are therefore to the 1973 Wisconsin Statutes unless otherwise noted.

Sec. 111.325, Stats., makes it unlawful for an employer to "discriminate against any employe." Sec. 111.32(5)(a), defines "discrimination" as "discrimination because of . . . sex . . . by an employer . . . against any employe . . . in regard to his hire, tenure or term, condition or privilege of employment . . ." Sec. 111.32(5)(g)1, provides,

"It is discrimination because of sex: 1. For an employer . . . to discriminate against such individual in promotion, compensation, or in terms, conditions or privileges of employment or licensing."

Sec. 111.32(5)(d), Stats., provides,

"The prohibition against discrimination because of sex does not apply to the exclusive employment of one sex in positions where the nature of the work or working conditions provide valid reasons for hiring only men or women, or to a differential in pay between employees which is based in good faith on any factor other than sex."

The Wisconsin Supreme Court held in Ray-O-Vac v. ILHR Department, 70 Wis.2d 919, 236 N.W.2d 209 (1975), that where the employer's group insurance plan provided non-occupational disability benefits for a maximum of 26 weeks during any one period of disability but restricted disability benefits due to pregnancy or childbirth to a maximum of six weeks, the department could find that the disparate treatment was "discrimination because of sex" under the Fair Employment Act.

The United States Supreme Court held in General Electric v. Gilbert, 429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976), that an employer's plan which provided nonoccupational disability benefits for a maximum of 26 weeks but excluded benefits for an absence due to pregnancy, did not violate Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec. 2000e-2(a)(1), which provides,

"It shall be unlawful employment practice for an employer (1) to . . . discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual's . . . sex . . . ;"

II SEX DISCRIMINATION

Goodyear argues that its plan does not constitute intentional discrimination based on gender; that its plant does not have a disparate effect based on gender; and that the Wisconsin Fair Employment Act must be construed consistently with Title VII and General Electric v. Gilbert, as a matter of comity and to avoid conflict with Title VII.

A. Intentional Discrimination Based on Gender: "Facial Discrimination"

Goodyear contends that its plan is free from gender-based discrimination because the only distinction in coverage relates to the length of time benefits are paid for one condition, pregnancy; that the persons affected by that distinction consist of two groups, "one of which is composed of both men and women who are not pregnant" and the other "is composed of pregnant women;" and that such a classification is not based solely on gender.

The plan does not, on its face, provide that men and women as such are entitled to different disability benefits. It therefore does not involve discrimination based on gender. General Electric v. Gilbert.

B. Discrimination Based on Effect or Impact

The Wisconsin Supreme Court and the United States Supreme Court agree that a facially nondiscriminatory plan may nevertheless be discriminatory in its effect. Gilbert held that "proof that the effect of an otherwise facially neutral plan or classification is to discriminate" may establish a In spite of this common ground, Wisconsin Telephone and Ray-O-Vac hold that a facially neutral plan which provides disability benefits related to pregnancy which are less than benefits for disabilities generally, can be found to discriminate on the basis of sex because of the effect of the plan. Gilbert, on the other hand, holds that a facially neutral plan which excludes disability benefits related to pregnancy, cannot be found to discriminate on the basis of sex in the Absence of evidence that such is the effect.

Prima facie case of sexual discrimination. 429 U.S. at 137, 97 S.Ct. 401, 408. Wisconsin Telephone Co. v. ILHR Department, 68 Wis.2d 345, 368, 228 N.W.2d 649, 662 (1975), held that the Fair Employment Act is intended to "eliminate practices that have discriminatory impact as well as practices which on their face amount to invidious discrimination." Ray-O-Vac held that an argument that a plan is facially neutral "misses the point" if "the effect of the benefits program is to provide disparate treatment for men and women employees." 70 Wis.2d at 930, 236 N.W.2d at 214.

Goodyear urges reconsideration of our Wisconsin precedents in light of Gilbert.

The distinction between providing lesser benefits and excluding benefits for pregnancy related disability is of no moment. The two-class analysis pregnant women and nonpregnant persons was applied in Geduldig v. Aiello, 417 U.S. 484, 497, 94 S.Ct. 2485, 41 L.Ed.2d 256 (1974), to find that a plan which excluded pregnancy benefits did not offend the fourteenth amendment to the United States Constitution and in Gilbert to find that such an exclusion is not sex discrimination under Title VII, and was noted in Wisconsin Telephone, 68 Wis.2d at 367, 228 N.W.2d 649, and in Ray-O-Vac, 70 Wis.2d at 930, 236 N.W.2d 209, as freeing plans providing lesser pregnancy benefits from facial discrimination. Pregnancy exclusions as well as lesser benefits for pregnancy disabilities are, in our opinion, equally voided under Wisconsin Telephone and Ray-O-Vac because of their effect.

The approaches of the United States Supreme Court in Gilbert and of the Wisconsin Supreme Court in Ray-O-Vac to the issue of discriminatory effect are fundamentally different, so different that the Court of Appeals of Wisconsin should not adopt the holding of Gilbert.

The United states Supreme Court approached the question of discriminatory effect primarily in terms of classes. It held that a "Prima facie violation of Title VII can be established in some circumstances upon proof that the effect of an otherwise facially neutral plan or discrimination is to discriminate against members of one class or another." 429 U.S. at 137, 97 S.Ct. at 408, emphasis added. The court held that the respondents had not proved gender-based effects upon a class. It found there was no evidence to support a finding that the plan worked to discriminate against any definable group or class in terms of aggregate risk protection. It referred to the General Electric plan as "an insurance package," and said, "The 'package' going to relevant identifiable groups we are presently concerned with General Electric's male and female employees covers the same categories of risk . . ." It refers to the "facially even-handed inclusion of risks" under the plan and finds that Title VII is not violated "even though the 'underinclusion' of risks impacts, as a result of pregnancy-related disabilities, more heavily upon one gender than upon the other." (429 U.S. at 138 and 140, 97 S.Ct. at 410) The impact upon the...