Wing v. Iowa Lutheran Hosp., 87-166

• Decision Date: 20 April 1988
• Docket Number: No. 87-166,87-166
• Parties: 58 Fair Empl.Prac.Cas. (BNA) 65 Arlene M. WING, a/k/a Arlene M. Belger, Plaintiff-Appellee/Cross-Appellant, v. IOWA LUTHERAN HOSPITAL, Defendant-Appellant/Cross-Appellee.
• Court: Iowa Court of Appeals

Page 175

426 N.W.2d 175

58 Fair Empl.Prac.Cas. (BNA) 65

Arlene M. WING, a/k/a Arlene M. Belger, Plaintiff-Appellee/Cross-Appellant, v. IOWA LUTHERAN HOSPITAL, Defendant-Appellant/Cross-Appellee.

No. 87-166.

Court of Appeals of Iowa.

April 20, 1988.

John R. Phillips of Rogers, Phillips & Swanger, Des Moines, and Thomas W. Foley of Nyemaster, Goode, McLaughlin, Emery & O'Brien, Des Moines, for defendant-appellant/cross-appellee.

Douglas B. Howard of the Rex Darrah Law Office, Des Moines, for plaintiff-appellee/cross-appellant.

Heard by HAYDEN, P.J., and SACKETT and HABHAB, JJ.

HABHAB, Judge.

Plaintiff, Arlene Wing, was hired by the defendant, Iowa Lutheran Hospital, on March 2, 1956. After holding a variety of part-time and full-time clerical positions, plaintiff became the billing supervisor in the Business Office Department in 1974. She held that position until March 1981.

As a result of a reorganization plan in the Business Office Department, the plaintiff was transferred from her job classification as billing supervisor to Auxiliary Services Supervisor/Hill-Burton Charity Specialist in the Patient Accounts Department in March 1981. In July 1981 a hospital-wide reorganization was implemented. The plaintiff's job classification was then changed to simply "Hill-Burton Charity Specialist." During the time that the plaintiff held this classification, she was the only hospital employee so classified.

In mid-1982 the hospital began to experience a decline in its patient census that accelerated so that by December 1982 the hospital was operating at a 57 percent occupancy rate, which was the first month under 70 percent in four years. A written staff reduction policy was developed in late 1982 as a result of this situation. The decline continued throughout the following year and by December 1983 the patient occupancy rate was 46 percent. Despite trying alternative ways to cut costs, the hospital was forced to consider staff reductions.

In February 1983 the hospital determined that layoffs were necessary. A committee of hospital administrators decided on the number of job classifications that needed to be reduced throughout the hospital. They determined that it would make good economic sense to eliminate the job classification of Hill-Burton Charity Specialist. Pursuant to this decision, the hospital laid off the plaintiff.

After exhausting administrative remedies, Arlene Wing filed the present age discrimination suit against Iowa Lutheran Hospital pursuant to Iowa Code section 601A.6(1)(a), a part of the Iowa Civil Rights Act. After a bench trial, the district court concluded that Iowa Lutheran had discriminated against Wing on the basis of age in selecting her to be laid off. The district court awarded Wing back wages and attorney's fees totalling nearly $100,000. Iowa Lutheran Hospital has appealed from the district court's judgment, and Wing has cross-appealed.

The hospital contends the district court's conclusion that it discriminated against Wing on the basis of age is not supported by substantial evidence. The hospital asserts the evidence established that Wing was laid off pursuant to a hospital-wide layoff under a nondiscriminatory layoff policy which was not facially discriminatory and had no disparate impact on a protected class of employees.

In her cross-appeal, Wing contends the district court erred in several respects in computing her damages. She asserts the district court's back pay award should have taken into account pay raises she would probably have received if the layoff had not occurred. She asserts she should have been awarded "front pay" or future salary damage in lieu of reinstatement. She also asserts she should have been awarded more damages for various lost fringe benefits. In addition, Wing contends the district court should have awarded her damages for emotional distress. Finally, Wing requests attorney's fees and costs on this appeal.

Appellate review is on errors of law. The trial court's fact findings have the effect of a special verdict. Murray v. Conrad, 346 N.W.2d 814, 817 (Iowa 1984); Iowa R.App.P. 4. We view the evidence in the light most favorable to upholding the judgment. Koehler v. State, 263 N.W.2d 760, 761 (Iowa 1978). If the findings are supported by substantial evidence, we are bound by them. Murray, 346 N.W.2d at 817; Iowa R.App.P. 14(f)(1). "Evidence is substantial if a reasonable mind would accept it as adequate to reach a conclusion." Iowa State Fairgrounds Security v. Iowa Civil Rights Commission, 322 N.W.2d 293, 296 (Iowa 1982). Bearing in mind the scope of review, we must first determine whether the trial court's finding that the hospital discriminated against the plaintiff was supported by substantial evidence.

It is plaintiff's burden to first establish a prima facie case of discrimination by a preponderance of the evidence. Woodbury County v. Iowa Civil Rights Commission, 335 N.W.2d 161, 165 (Iowa 1983). To do this, the plaintiff must show:

(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 [plaintiff's] protected class or retained persons with comparable or lesser qualifications who are not in a protected group.

Iowa State Fairgrounds Security, 322 N.W.2d at 296; Trobaugh v. Hy-Vee Food

Stores, Inc., 392 N.W.2d 154, 156 (Iowa 1986).

Once plaintiff establishes a prima facie case, the burden of going forward with evidence shifts to the employer to articulate some legitimate, nondiscriminatory reason for the challenged action. Iowa State Fairgrounds Security v. Iowa Civil Rights Commission, 322 N.W.2d 293, 296 (Iowa 1982). See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668, 678 (1973). But in rebutting the presumption, the employer's nondiscriminatory reason must be specific and clear enough for the employee to address and legally sufficient to justify judgment for the employer. Crimm v. Missouri Pac. R. R., 750 F.2d 703, 712 (8th Cir.1984). If the employer carries this burden the presumption of discrimination drops. Cooper v. Federal Reserve Bank, 467 U.S. 867, 875, 104 S.Ct. 2794, 2799, 81 L.Ed.2d 718, 727 (1984); Trobaugh, 392 N.W.2d at 156.

Plaintiff employee must next show the employer's proffered justification for the action was pretextual. Trobaugh, 392 N.W.2d at 157. Plaintiff may carry this burden by "persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence." Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207, 217 (1981). Plaintiff bears the ultimate burden of persuasion of intentional discrimination and that burden never shifts to the employer. Burdine, 450 U.S. at 252-53, 101 S.Ct. at 1093, 67 L.Ed.2d at 215.

I.

The trial court found that "the Plaintiff was discharged by the defendant due to her age and that said discharge was an unfair and discriminatory employment practice pursuant to Iowa Code section 601A.6(1)(a)." As it relates to this finding, age discrimination need only be a determining factor in the discharge of an employee, it need not be the sole determining factor. Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 (3rd Cir.1984). As the Court in Duffy stated:

In order to recover under the ADEA [Age Discrimination in Employment Act, 29 U.S.C. § 621 et. seq. (1975) ], a plaintiff must prove by a preponderance of the evidence that age was "a determinative factor" in the employer's decision (citation omitted). Duffy need not prove that age was the employer's sole or exclusive consideration but must prove that "age made a difference" in that decision. (citation omitted)

Id. at 1395. Thus, in the case before us, if there is substantial evidence in the record to support this finding, we will defer to that decision. Murray, 346 N.W.2d at 817; Koehler, 263 N.W.2d at 261.

It is clear from the record, and the plaintiff concedes, that the defendant was confronted with a decline in its patient census and revenue in 1982 and 1983, and that economics was the initial reason for the subsequent discharges that took place. However, the fact that such circumstance exists does not preclude liability under section 601A.6(1)(a) if the employee can prove that "(1) a discriminatory reason more likely motivated the employer or (2) the employer's proffered explanation is unworthy of credence." Duffy, 738 F.2d at 1396.

But the employee cannot rely solely on termination to establish a prima facie case when an employer makes cutbacks due to economic necessity. Holley v. Sanyo Mfg., Inc., 771 F.2d 1161, 1165 (8th Cir.1985). Nor is it sufficient for an employee to show only that she was the victim of a cutback in the labor force necessitated by depressed economic conditions and that the job was combined into the duties of a younger employee to meet the requirements of a prima facie case. Sahadi v. Reynolds Chemical, 636 F.2d 1116, 1117 (6th Cir.1980). The plaintiff must come forward with additional evidence that age was a factor in her termination. Duffy, 738 F.2d at 1395. Has the plaintiff met her burden? We hold she has.

Prima Facie Case

As stated, plaintiff first had to establish that she belonged to a group protected by section 601A.6(1)(a) of the Iowa Code (Iowa Civil Rights Act). ¹ Trobaugh, 392 N.W.2d at 156. The Iowa Supreme Court has ruled that civil rights cases brought under Chapter 601A are to be guided by federal law. King v. Iowa Civil Rights Commission, 334 N.W.2d 598, 601 (Iowa 1983). It was stipulated at trial that plaintiff was sixty-one years old at the time she left Lutheran's employ. Under the Federal Age Discrimination in Employment Act (A.D.E.A.), the protected age group ranges from ages forty to...