Percy Kent Bag Co. v. Missouri Com'n on Human Rights

• Decision Date: 11 May 1982
• Docket Number: No. 63460,63460
• Citation: 632 S.W.2d 480
• Parties: 46 Fair Empl.Prac.Cas. (BNA) 626 PERCY KENT BAG COMPANY, Appellant, v. MISSOURI COMMISSION ON HUMAN RIGHTS, Respondent.
• Court: Missouri Supreme Court

Page 480

632 S.W.2d 480

46 Fair Empl.Prac.Cas. (BNA) 626

PERCY KENT BAG COMPANY, Appellant, v. MISSOURI COMMISSION ON HUMAN RIGHTS, Respondent.

No. 63460.

Supreme Court of Missouri, En Banc.

May 11, 1982.

Edward H. Sheppard, James D. Conkright, Kansas City, for appellant.

John Ashcroft, Atty. Gen., Brian P. Seltzer, Asst. Atty. Gen., Jefferson City, for respondent.

Daniel M. Dibble, Karen M. Iverson, Kansas City, amicus curiae.

SEILER, Judge.

Percy Kent Bag Company (Percy Kent) appeals an order of the Missouri Commission on Human Rights (Commission) which, after finding the company had engaged in discriminatory employment practices, ordered the company to cease and desist such discriminatory practices and to pay back pay to a discharged black employee. On appeal, Percy Kent contends that the order is erroneous because chapter 296, RSMo 1978 ¹ (Employment Discrimination Practices) unconstitutionally delegates judicial powers to an administrative agency, thus denying appellant due process of law, and because the decision of the Commission is not supported by substantial and competent evidence. ² Jurisdiction is in this court because the validity of a statute of this state is at issue. Mo.Const. art. V, § 3.

One purpose of chapter 296 is to avoid and eliminate "racial discrimination in employment in both the public and private sector." City of St. Louis v. Missouri Commission on Human Rights, 517 S.W.2d 65, 68-69 (Mo.1974); §§ 296.020, .030. To achieve this public policy, there must be some method of enforcement. 517 S.W.2d at 70. As was stated in State Human Rights Commission v. Pauley, 212 S.E.2d 77 (W.Va.1975): ³ "If our society and government seriously desire to stamp out the evil of unlawful discrimination which is symptomatic of unbridled bigotry, and we believe they do, then it is imperative that the duty of enforcement be accompanied by an effective and meaningful means of enforcement." Id. at 79. The Missouri Commission on Human Rights is the body charged with the "duty of enforcement" and has those powers necessary " 'to the proper discharge of its duties.' " Harris v. Pine Cleaners, Inc., 274 S.W.2d 328, 332 (Mo.App.1954). The "means of enforcement" adopted by the legislature include the power to order an employer to cease and desist discriminatory practices and to order the employer to pay back pay to a wrongfully discharged employee. Although such an award will inure to the benefit of the discharged employee, it is incidental to the power of the Commission to enforce compliance with the policy of nondiscrimination in employment.

The procedures adopted by the legislature to implement this policy are as follows. ⁴ A person who believes he has been aggrieved by discriminatory employment practices may file a verified complaint with the Commission. Section 296.040.1. The executive director of the Commission investigates the complaint and determines if there is probable cause "for crediting the allegations of the complaint, ..." Section 296.040.2. If the director determines that probable cause exists, he must attempt "to eliminate the unlawful employment practice complained of by conference, conciliation, and persuasion." Id. If these attempts fail to eliminate the complained of practice, the chairman of the Commission serves notice on the respondent employer of a public hearing to answer the charges of the complaint, said hearing to be held before a panel consisting of three members of the Commission or before a hearing examiner who must be an attorney. Section 296.040.3. "The case in support of the complaint shall be presented before the hearing examiner or the panel by the office of the attorney general of the state of Missouri; neither the hearing examiner or any member of the Commission panel shall participate in the investigation, and the aforesaid endeavors at conciliation shall not be received in evidence." Section 296.040.4. The respondent employer may appear with an attorney at the hearing and present testimony. All testimony is taken under oath and transcribed. Section 296.040.5. After hearing and upon a finding that the employer has engaged in unfair employment practices, the panel shall issue findings of fact and conclusions of law and shall issue an order "requiring the respondent to cease and desist from such unlawful employment practice and to take affirmative action to require hiring, reinstatement or upgrading or restoration to membership in any respondent labor organization with or without back pay, as in its judgment will effectuate the purpose of this chapter, ..." Section 296.040.7. If the cause is heard by a hearing examiner, as was done here, the examiner shall issue findings of fact and conclusions of law and recommend a proposed order to the Commission. Section 296.040.8. The Commission then must review the record, findings, and proposed order after which it accepts, rejects, or amends the recommended order. A copy of the order of the Commission is delivered to the complainant, respondent, and the attorney general. Section 296.040.9. Procedures for judicial review of the Commission's order are set out at §§ 296.040.11, .050.2 and .3. Any person aggrieved by an order of the Commission may petition the circuit court for review. An appeal from the judgment of the circuit court to the appropriate appellate court may be taken. If no judicial review is sought, the Commission can obtain a court order from the appropriate circuit court to enforce the Commission's decision.

Following these procedures, complainant Willie C. Allen filed a complaint with the Commission on April 15, 1976 alleging that Percy Kent had terminated him because of his race in violation of § 296.020.1(1)(a). ⁵ The Commission issued a finding of probable cause, and attempted unsuccessfully to eliminate the alleged discriminatory employment practices by conference, conciliation, and persuasion. Following notice to Percy Kent, a hearing was held before a hearing examiner who issued findings of fact and conclusions of law. The hearing officer found that the assistant attorney general had proven by a preponderance of the evidence that Percy Kent had violated § 296.020.1(1)(a) by terminating Mr. Allen. He recommended that Percy Kent pay Mr. Allen back pay of $12,034.37, pay interest of 6% on the back pay award from April 8, 1976 (the date of discharge), and "cease and desist from discriminating against blacks by disciplining them more severely than similarly situated white employees." The Commission adopted the hearing officer's recommended order in part, but did not order interest on the back pay award. Percy Kent petitioned the Cole County circuit court for judicial review of the Commission's order. On March 11, 1981, the circuit court affirmed the order of the Commission. This appeal followed.

Percy Kent argues that chapter 296 is facially unconstitutional because it delegates judicial power to an administrative agency thus violating the separation of powers doctrine of Mo.Const. art. II, § 1. This argument focuses on the discretionary power of the Commission to award back pay to the complainant if it deems such an award necessary "to effectuate the purposes of this chapter." Section 296.040.7. In the company's argument, this back pay award is seen as the equivalent of damages in a civil suit because the Commission can order one individual to pay money to another individual. Thus, goes the argument, giving the Commission power to award back pay is vesting an administrative agency with judicial power to adjudicate purely private rights.

To support this argument, Percy Kent relies principally on State ex rel. Missouri Pacific Railroad v. Public Service Commission, 303 Mo. 212, 259 S.W. 445 (1924), where the court held that the Public Service Commission (PSC) was without power to order the railroad to pay the complainant damages for charging an excessive rate. This, the court held, the PSC could not do because "(t)o determine whether one person is entitled to recover money from another by way of damages cannot be anything but a judicial question," id. 259 S.W. at 447, a function constitutionally reserved to the courts. The situation in Missouri Pacific Railroad differs from the instant challenge in several important respects. First, in Missouri Pacific, there was a question whether the legislature authorized the PSC to award any damages and thus the PSC action was ultra vires. In contrast, the Commission is given express statutory authority to award back pay if, in its judgment, it determines such an award will "effectuate the purposes of this chapter ...." Section 296.040.7. Second, in Missouri Pacific, the legislature did not establish standards for the agency to apply to determine if damages should be awarded and the measure of damages, even if authorized. In contrast, the purpose of chapter 296 is set out at § 296.030(1), "(t)o seek to eliminate and prevent discrimination in employment," and the power of the Commission to award back pay is an incidental power to effectuate this public purpose. Section 296.040.7. Also, a back pay award differs from a civil suit damages award. A back pay award "may involve a monetary award, but such awards have specific limitations ..." and is based on objective, easily ascertained information. State Human Rights Commission v. Pauley, 212 S.E.2d 77, 81 (W.Va.1975) (Berry, J., affirming the statutory authority of the West Virginia Human Rights Commission to award back pay to a victim of discrimination but dissenting to expansion of the Commission's authority, under the back pay provision, to include an award of compensatory damages). See note 3, supra. In the case at bar, evidence as to Allen's salary at the time of wrongful termination, his mandated salary increases, and his income earned from employment obtained after his termination was all introduced at the hearing. Once the Commission, in the exercise of its expertise has determined back pay should be part of the...