Peoples Memorial Hosp. v. Iowa Civil Rights Com'n

• Decision Date: 21 July 1982
• Docket Number: No. 66446,66446
• Citation: 322 N.W.2d 87
• Parties: 46 Fair Empl.Prac.Cas. (BNA) 665 PEOPLES MEMORIAL HOSPITAL, Appellee, v. The IOWA CIVIL RIGHTS COMMISSION, Appellant.
• Court: Iowa Supreme Court

Page 87

322 N.W.2d 87

46 Fair Empl.Prac.Cas. (BNA) 665

PEOPLES MEMORIAL HOSPITAL, Appellee, v. The IOWA CIVIL RIGHTS COMMISSION, Appellant.

No. 66446.

Supreme Court of Iowa.

July 21, 1982.

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

James R. Snyder, Iris E. Muchmore, and Ann E. Brenden of Simmons, Perrine, Albright & Ellwood, Cedar Rapids, for appellee.

Considered en banc.

McGIVERIN, Justice.

The district court reversed an order of respondent Iowa Civil Rights Commission (Commission) which found petitioner Peoples Memorial Hospital (PMH) guilty of sex discrimination. In our view of the case a single issue is dispositive: Whether there is substantial evidence in the record before the Commission to support its finding of sex discrimination. We find that there is not and therefore affirm the district court order.

The findings of fact made by the Commission's hearing officer indicates the following chain of events. PMH, located in Independence, employed Sharon Thomas Fenner in October 1970 as a nurse-anesthetist. She was employed on an "on call" basis, having no regular hours of employment, but being required to report to work whenever her services were required. Fenner was hired under an oral agreement paying her $15,000 annually plus 50% of any anesthesia fees collected over that base amount. In 1971, her first full year of employment for PMH, she earned $15,017.60. ¹ In 1972, Fenner received a base salary of $15,000 plus 35% of anesthesia fees over that amount for a wage total of $16,677.20. Because there had been a disagreement as to the term of Fenner's oral employment agreement in 1972, she entered into written employment contracts for the 1973 through 1975 fiscal years.

For 1973, Fenner received a $15,000 base plus 35% of excess anesthesia fees for $19,261.25 compensation. In 1974, the same contract applied and she earned $20,209.97. In 1975, her base pay was raised to $16,500 and she received 35% of the excess anesthesia fees for a total of $23,629.30 in wages earned.

During the fall of 1975 PMH and Fenner entered into their annual negotiations to reach the terms of her employment contract in 1976. In September 1975, William Yingling had been appointed administrator of PMH. He proposed a $1,000 raise for all department heads, which would have applied to Fenner. In late September Fenner made a verbal wage proposal to PMH of $20,000 base plus 35% of anesthesia fees collected in excess of the base.

Yingling made a written wage proposal to Fenner in early October. The proposed contract extended the across-the-board pay raise to Fenner, in other words a base salary of $17,500 plus 35% of excess anesthesia fees. ² Fenner made a written counteroffer on October 14 proposing a $19,000 base plus 33% of excess anesthesia fees. ³ She also proposed that if the base was less than $19,000 the percentage compensation would be raised to 35% of excess anesthesia fees.

On November 11, 1975, the PMH board of trustees rejected Fenner's counteroffer. The board then changed policy relative to employment agreements. Yingling was instructed by the board to continue contract negotiations with Fenner under three guidelines: 1) no written contract; 2) no percentage of anesthesia fees collected over the base salary; and 3) total salary not to exceed $19,000. Two reasons were given for the seemingly abrupt change in bargaining position. Numerous complaints had been received by the board from the public and other PMH employees that Fenner was receiving preferential treatment in that she was the only PMH employee with a written employment contract and also the only employee who received a percentage of patient fees as wages. On November 17, Yingling thus made a proposal to Fenner of a salary not to exceed $19,000 with no written contract or percentage of excess anesthesia fees.

The 1975 fiscal year ended November 30, 1975. Fenner continued to work at PMH, albeit not under written contract. On December 10 Yingling set out the position of the board to Fenner in a letter. He expressed the concern of PMH to settle the contract dispute expeditiously so that the hospital could be certain of her employment intentions and be certain that it would have the personnel required for surgery. The letter listed PMH's "expectations if you are to remain as an employee." The expectations were: 1) $19,000 base salary; 2) no percentage of anesthesia fees; 3) status as department head, meaning entitlement to department head benefits and assumption of department head responsibilities; 4) minimum of 25 hours of work per week, with assistance to nursing staff required if nurse-anesthetist duties did not comprise the minimum; 5) opportunity to attend continuing education meetings at PMH expense; 6) availability for emergency call two out of three weekends and during non-working hours on weekdays; and 7) responsibility of arranging for fill-in personnel when not available for call and notification of medical staff of replacements.

Fenner then made a counter proposal, essentially reiterating her October counteroffer, calling for a written contract with a base salary of $19,000 plus 33% of anesthesia fees over base. She expressed her willingness to continue negotiations, but was not receptive to an arrangement not including a percentage of fees or a total salary offer less than her 1975 wages of $23,629.30. The PMH board of trustees refused to accept the Fenner counter proposal and expressed to her that the terms of employment set out in the December 10 letter were the final offer. On December 19 Fenner rejected the final offer of PMH and informed the hospital she would resign her employment on December 24. She did, in fact, resign on December 24.

Fenner's resignation left a void on the staff at PMH that needed to be filled rapidly. Yingling did not believe that a nurse-anesthetist acting on an independent contract basis would be sufficient to meet the long-term needs of PMH. He therefore began a search to acquire a nurse-anesthetist as a PMH employee as soon as possible. The search located a nurse-anesthetist in Quincy, Illinois, who was interested in the position. Yingling interviewed this candidate, John Peters, and made him an employment offer of $19,000 salary with no written contract or percentage of fees. Peters counteroffered for $22,000 with no written contract or percentage of fees. The PMH board of trustees accepted Peters' counteroffer. His employment, like the final offer to Fenner, required him to perform some duties outside of nurse-anesthesiology.

Fenner learned about Peters' employment on January 12, 1976. She filed a complaint with the Commission on April 19, 1976, alleging that she had been subjected to differential treatment regarding her working conditions solely because of her sex and that PMH was therefore in violation of section 601A.6, The Code. ⁴ Although Fenner returned to work at PMH in December 1977 as a "self-employed or free-lance anesthetist," the Commission's administrative process continued. A public hearing was held on the matter on August 9, 1978. On July 13, 1979, a recommended decision and order of the hearing officer was filed.

The Commission's hearing officer found that Fenner had "carried her burden of showing actions from which unlawful discrimination can be inferred." The hearing officer further found, however, that PMH had articulated "legitimate, non-discriminatory business reasons" for its actions and since Fenner had not shown such reasons were a pretext for discrimination there was no unfair or discriminatory practice prohibited under chapter 601A. Under the recommended decision by the hearing officer, Fenner's petition would be ordered dismissed.

At its August 9, 1979, meeting the Commission reviewed and reversed the July 13 recommended decision and order. The Commission found that PMH had committed unfair and discriminatory acts in violation of section 601A.6. It remanded the case to the hearing officer for determination of damages and an appropriate supporting decision and order. The Commission revised its order on August 23, specifically finding that PMH had "failed to establish a non-discriminatory business reason to overcome [Fenner's] prima facie case."

On November 29, 1979, the Commission issued a decision and order finding that PMH had violated chapter 601A. It ordered PMH to pay Fenner $16,575.00 as damages pursuant to section 601A.14(12), The Code 1975.

PMH filed a petition for judicial review of the Commission's decision and order. The district court, finding no reasonable evidentiary support for the Commission's determination, reversed the November 29 order. § 17A.19(8)(f), The Code. The Commission appealed.

As a preliminary matter we note that PMH has challenged the Commission's jurisdiction to enter the November 29 order because the Commission met to review the hearing officer's recommendation on August 9 instead of August 16, 1979. We find that the Commission had jurisdiction to enter the order.

We have recently discussed our scope of review for appeals from district court judicial review of agency action pursuant to section 17A.19 in Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162, 164-65 (Iowa 1982), and City of Mason City v. PERB, 316 N.W.2d 851, 853 (Iowa 1982). The following principles from Foods are equally applicable to the present case:

The Iowa Administrative Procedure Act (IAPA), ch. 17A, The Code, provides for judicial review of final agency action. § 17A.19, The Code. See also § 601A.17(1), The Code ("Judicial review of the actions of the commission may be sought in accordance with the terms of the Iowa administrative procedure Act."). Section 17A.20, The Code, provides:

An aggrieved or adversely affected party to the judicial review proceeding may obtain a review of any final judgment of the district court under this chapter by appeal to the supreme court. The appeal shall be taken...