Iowa State Fairgrounds Sec. v. Iowa Civil Rights Com'n

• Decision Date: 21 July 1982
• Docket Number: No. 66422,66422
• Court: Iowa Supreme Court
• Parties: 46 Fair Empl.Prac.Cas. (BNA) 660, 29 Empl. Prac. Dec. P 32,984 IOWA STATE FAIRGROUNDS SECURITY, State of Iowa, Appellee, v. IOWA CIVIL RIGHTS COMMISSION, Appellant.

Page 293

322 N.W.2d 293

46 Fair Empl.Prac.Cas. (BNA) 660,

29 Empl. Prac. Dec. P 32,984

IOWA STATE FAIRGROUNDS SECURITY, State of Iowa, Appellee, v. IOWA CIVIL RIGHTS COMMISSION, Appellant.

No. 66422.

Supreme Court of Iowa.

July 21, 1982.

Thomas J. Miller, Atty. Gen., and Victoria L. Herring, Asst. Atty. Gen., for appellant.

Patricia A. Shoff and Gene R. LaSuer of Davis, Hockenberg, Wine, Brown & Koehn, Des Moines, for appellee.

Considered en banc.

McCORMICK, Justice.

The main question here is whether the district court erred in holding that a sex discrimination decision of the Iowa Civil Rights Commission is unsupported by substantial evidence when the record is viewed as a whole, pursuant to section 17A.19(8)(f), The Code. Because we find sufficient evidentiary support for the Commission's decision, we reverse the district court.

The case arose from the termination of employment of Connie Clark from her position as security guard with petitioner Iowa State Fairgrounds Security. Clark filed a sex discrimination complaint with the commission under section 601A.6(1)(a). She asserted she was discharged for conduct that was tolerated in male employees. After an investigation and finding of probable cause, the case proceeded to hearing in accordance with the provisions of chapter 17A for contested cases. See § 601A.15(7). The hearing was conducted by a hearing officer. He subsequently filed a proposed decision and order holding that Clark had not met her burden to prove sex discrimination.

Clark appealed to the commission, and the commission rejected the proposed decision, found the evidence showed sex discrimination, and remanded to the hearing officer for preparation of a decision reflecting the commission's conclusions. The commission subsequently adopted the revised decision as its final decision. It ordered petitioner to cease discriminating against female employees and to pay Clark damages of $7018.84 with interest at seven percent from the date of the order.

Upon judicial review the district court said it accorded the hearing officer's decision "particular attention" because of the commission's failure to explain why it disagreed with him. The court concluded that the commission decision was not supported by substantial evidence, vacated it, and remanded the case to the commission for dismissal of the complaint. The commission then took the present appeal. As the appeal is presented, we must decide the effect of the hearing officer's decision on the substantial evidence test and determine whether the district court erred in holding that the commission decision was unsupported by substantial evidence.

I. The hearing officer's decision. In rejecting the hearing officer's decision in the present case, the commission gave reasons for its conclusion. However, it did not explain why it believed the evidence of discrimination had greater probative force than the hearing officer gave it. Petitioner contends that in this situation the hearing officer's decision is entitled to enhanced weight in the substantial evidence test. We disagree. Under chapter 17A and the cases, the hearing officer's decision is simply one factor to be considered in applying the substantial evidence test, even when the agency has made a contrary decision.

A hearing officer's decision is merely a proposed agency decision. It becomes the final agency decision "unless there is an appeal to, or review on motion of, the agency within the time provided by rule." § 17A.15(3). When reviewing a proposed decision, "the agency has all the power it would have in initially making the final decision except as it may limit the issues on notice to the parties or by rule." Id. Upon judicial review, the district court reviews the final agency decision, not the hearing officer's proposal. Jackson County Public Hospital v. P.E.R.B., 280 N.W.2d 426, 434 (Iowa 1979).

Nothing in the statute supports giving the hearing officer's proposed decision elevated status when, as in the present case, the officer and the agency disagree. The statute gives the agency an unfettered right to find the facts in the first instance. It makes the hearing officer an adjunct of the agency rather than an independent decisionmaker.

This does not mean a disagreement on the facts between the officer and the agency may not affect the substantiality of the evidence supporting the agency decision. When the agency decision is attacked on the substantial evidence ground in section 17A.19(8)(f), the district court must examine the entire record. This includes the hearing officer's decision. § 17A.12(6)(e) and (f). The hearing officer's decision is not evidence, but his findings may affect its weight when credibility issues are involved. This was explained by the United States Supreme Court in Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 496-97, 71 S.Ct. 456, 469, 95 L.Ed. 456, 472 (1951):

We do not require that the examiner's findings be given more weight than in reason and in the light of judicial experience they deserve. The "substantial evidence" standard is not modified in any way when the Board and its examiner disagree. We intend only to recognize that evidence supporting a conclusion may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with the case has drawn conclusions different from the Board's than when he has reached the same conclusion. The findings of the examiner are to be considered along with the consistency and inherent probability of testimony. The significance of his report, of course, depends largely on the importance of credibility in the particular case. To give it this significance does not seem to us materially more difficult than to heed the other factors which in sum determine whether evidence is "substantial."

See Peoples Memorial Hospital v. Iowa Civil Rights Commission, 322 N.W.2d 87 (Iowa 1982), filed separately this date.

Even when credibility is involved, the agency, not the hearing officer, is charged with the authoritative responsibility to decide what the evidence means under the governing statute. See Penasquitos Village, Inc. v. N.L.R.B., 565 F.2d 1074, 1078-79 (9th Cir. 1977); N.L.R.B. v. Miller Redwood Company, 407 F.2d 1366, 1369 (9th Cir. 1969). This distinction is recognized in American Federation of Television & Radio Artists v. N.L.R.B., 129 U.S.App.D.C. 399, 405, 395 F.2d 622, 628 (D.C.Cir.1968), where the court recognized the expertise and experience of a hearing officer but held "the statute gives the final say, assuming support in the record, to the collegial conclusion of the Board members, who likewise have particular expertise, and also, presumptively, a judgment enhanced by the perspective of experience ...."

In arguing for giving the hearing officer's findings greater significance when the agency does not explain its reasons for disagreeing, petitioner relies on Greater Boston Television Corporation v. F.C.C., 143 U.S.App.D.C. 383, 444 F.2d 841 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2233, 29 L.Ed.2d 701 (1971), and St. Vincent's Hospital v. Finley, 154 N.J.Super. 24, 380 A.2d 1152 (1977). In Greater Boston, however, the court simply said that the agency should give "attentive consideration" to an examiner's decision, noting that "in the last analysis it is the agency's function, not the Examiner's, to make the findings of fact and select the ultimate decision, and where there is substantial evidence supporting each result it is the agency's choice that governs." 444 F.2d at 853. In St. Vincent's Hospital, the court criticized an agency for apparently ignoring totally the record before a hearing officer and his conclusions. See 380 A.2d at 1155. These cases do not support petitioner's argument.

Giving elevated status to a hearing officer's proposed decision when the agency reaches a contrary decision without explaining how it arrived at a different view of the probative force of the evidence would introduce an unwarranted complication into the substantial evidence test. We decline to take that step. At the same time, however, we note that the task of judicial review is greatly facilitated when agency decisions are fully explained.

II. Sufficiency of the evidence. Like the district court, we must apply the substantial evidence test to the entire record. Evidence is substantial if a reasonable mind would accept it as adequate to reach a conclusion. City of Davenport v. P.E.R.B., 264 N.W.2d 307, 311 (Iowa 1978).

The parties assume we will find federal cases persuasive in selecting the analytical framework for deciding discrimination cases under the Iowa civil rights statute. This assumption is warranted by our prior decisions. See, e.g., Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162 (Iowa 1982); First Judicial District Department of Correctional Services v. Iowa Civil Rights Commission, 315 N.W.2d 83 (Iowa 1982); Linn Co-op Oil Co. v. Quigley, 305 N.W.2d 729 (Iowa 1981); Cedar Rapids Community School District v. Parr, 227 N.W.2d 486 (Iowa 1975).

The elements of a prima facie case of disparate treatment in hiring under the federal statutory counterpart are delineated in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668, 677 (1973). By analogy, the same burden can be met in a federal discharge case if the complainant presents substantial evidence (1) that he belongs to a group protected by the statute, (2) that he was qualified for the job from which he was discharged, (3) that, despite his qualifications, he was terminated, and (4), that, after his termination, the employer hired a person not in complainant's protected class or retained persons with comparable or lesser qualifications who are not in the protected group. See Lujan v. State of New Mexico Health and Social Services Department, 624 F.2d 968, 970 (10th Cir. 1980). The risk of nonpersuasion remains on the...