Woodbury County v. Iowa Civil Rights Com'n

• Decision Date: 15 June 1983
• Docket Number: No. 67655,67655
• Citation: 335 N.W.2d 161
• Parties: 48 Fair Empl.Prac.Cas. (BNA) 1553 WOODBURY COUNTY, Iowa, Appellee, v. IOWA CIVIL RIGHTS COMMISSION, Appellant.
• Court: Iowa Supreme Court

Page 161

335 N.W.2d 161

48 Fair Empl.Prac.Cas. (BNA) 1553

WOODBURY COUNTY, Iowa, Appellee, v. IOWA CIVIL RIGHTS COMMISSION, Appellant.

No. 67655.

Supreme Court of Iowa.

June 15, 1983.

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

Roger E. McEntaffer, Asst. County Atty., for appellee.

Considered en banc.

McGIVERIN, Justice.

This appeal on further review from the court of appeals requires us to address the basic issue of whether there is substantial evidence in the record as a whole to support the decision of the respondent Iowa Civil Rights Commission that petitioner Woodbury County was guilty of intentional racial discrimination under Iowa Code section 601A.6(1)(a) in failing to hire a job applicant. On judicial review the district court, with which we agree, ruled in favor of the County. The court of appeals in a three-to-two decision went the other way. We vacate the decision of the court of appeals and affirm that of the district court.

In 1975 the County sought applicants for the job of fiscal officer at the county employment training center. The job vacancy notice specified that a high school degree, or the equivalent, was required plus three years of experience, with the possibility of substituting specialized education in bookkeeping or accounting on a one-to-one basis for years of experience. The job was described in the notice as follows:

Maintain daily and periodic accounts and payment records, ledgers, and logs; maintain records of allowance, supportive service, and training payments; maintain personnel records; prepares periodic and internal reports; assist in Management Information System; prepares Federal reports; maintains property inventory; prepares RFP and purchasing records; analyze Federal Regulations, field memoranda, and contracts for allowable costs; audits vouchers; may supervise subordinates; related work as required.

Complainant Carolyn Lee, a naturalized citizen of Chinese extraction, applied for the job. Lee had an undergraduate degree in economics at Taiwan University in 1967 and was working on her MBA; in all, she had about fifteen hours of accounting. She also had some work experience in accounting but at the time she applied for the job as fiscal officer, she was working in the county auditor's office as a tax clerk.

Thirteen people were interviewed for the job. The successful candidate, Sandra Miller, a white woman, had an undergraduate degree in accounting and management, no graduate work, but some work experience in accounting.

When she learned that another woman had been hired, Lee called the interviewer, Bruce Lambertson, and inquired why she had not been hired. Lambertson told Lee that she was qualified for the job, but she probably would get bored with the routine and quit.

Lee filed a complaint with the Iowa Civil Rights Commission alleging that she had been discriminated against on account of her race. Iowa Code § 601A.6(1)(a) (1975) ("(1) It shall be an unfair or discriminatory practice for any: (a) Person to refuse to hire ... any applicant for employment ... because of the ... race ... of such applicant...."). Specifically, Lee complained that she had been given only a 15-20 minute interview while the other candidates had been interviewed for 30 minutes, and she had not been asked a hypothetical question which required the interpretation of a federal regulation with which the fiscal officer would be working.

Lee's complaint worked its way through the normal administrative procedures of the Commission and a public hearing upon the complaint finally was held on June 6, 1980. Testimonial and documentary evidence was received. The hearing officer noted that the recollections of both Lee and Lambertson were somewhat unclear after the passage of over five years, but he found Lee to be the more credible witness and recommended a decision in her favor. The final order of the Commission found that the County had discriminated against Lee. Iowa Code § 601A.15(8) (1979).

The County sought judicial review. Iowa Code §§ 601A.17(1), 17A.19(1) (1979). The district court reversed the Commission's decision and dismissed Lee's complaint because "there [was] not substantial evidence in the record as a whole that Woodbury's articulated reasons for not hiring [Lee] for the position were pretextual."

The Commission appealed and the case was transferred to the court of appeals which reinstated the decision of the Commission on the basis of the hearing officer's assessment of the witnesses' credibility.

The County sought and was granted further review.

I. Scope of review. In cases such as this the appellate courts sit to correct errors of law made by the district court on judicial review. To this end we apply the substantial evidence rule of section 17A.19(8)(f) to determine whether our conclusions are the same as those of the district court. Peoples Memorial Hospital v. Iowa Civil Rights Commission, 322 N.W.2d 87, 90-92 (Iowa 1982). The substantial evidence rule requires us to review the record as a whole to determine whether there is sufficient evidence to support the decision the commission made. Iowa Code § 17A.19(8)(f) (1983); City of Davenport v. Public Employment Relations Board, 264 N.W.2d 307, 311 (Iowa 1978) ("[T]he entire record must be considered in determining whether the challenged finding has sufficient support.").

The hearing officer's finding of credibility, while not to be taken lightly, is but one part of the entire record which we must review. The hearing officer's finding as adopted by the Commission can be set aside if not supported by substantial evidence.

These principles are consistent with the Supreme Court's often quoted explanation of the federal Administrative Procedure Act in Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951):

[A] reviewing court is not barred from setting aside [an agency] decision when it cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the [agency's] view.

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The [agency's] findings are entitled to respect; but they must nonetheless be set aside when the record on [judicial review] clearly precludes the [agency's] decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.

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The significance of [the hearing officer's] report ... 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."

Id. at 488, 490, 496-97, 71 S.Ct. at 465, 469, 95 L.Ed. at 468-69, 472 (emphasis added). See also Iowa State Fairgrounds Security v. Iowa Civil Rights Commission, 322 N.W.2d 293, 295 (Iowa 1982); City of Davenport v. Public Employment Relations Board, 264 N.W.2d 307, 312 (Iowa 1978).

II. Sufficiency of the evidence. Like the district court, we must apply the substantial evidence test to the entire record, not just the hearing officer's findings of witness credibility. In looking for substantial evidence to support the decision of the Commission, therefore, we will review not only the testimony of Lee and Lambertson and the hearing officer's finding as to their credibility, but also all other testimony and documentary evidence, including notes Lambertson made at the time of the interviews in 1975.

The nature of the evidentiary burden in a case of disparate treatment in hiring was set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668, 677 (1973). See Linn Co-operative Oil Co. v. Quigley, 305 N.W.2d 729, 733 (Iowa 1981) (McDonnell Douglas analytical framework applied in sex discrimination discharge case); see also King v. Iowa Civil Rights Commission, 334 N.W.2d 598 (Iowa 1983) (application of McDonnell Douglas to religious discrimination case.).

A. Prima facie case. The complainant, who bears the ultimate burden of persuasion that she was intentionally discriminated against, must first establish a prima facie case of discrimination by a preponderance of the evidence. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207, 215 (1981). This burden is met in the present case if the complainant establishes substantial evidence (1) that she was a member of a protected class; (2) that she was objectively qualified for the position; (3) that she was excluded from the final group of candidates; and (4) that a member of a non-protected class with similar qualifications was hired. Peters v. Lieuallen, 693 F.2d 966, 969 (9th Cir.1982) (disparate treatment in hiring from a single pool of applicants); see also United States Postal Service Board of Governors v. Aikens, 460 U.S. 711, 103 S.Ct. 1478, 75 L.Ed.2d 403 (1983) (prima facie case of racial discrimination shown by evidence that (1) employee was black, (2) that he applied for a promotion for which he possessed minimum qualifications, and (3) that the employer selected a non-minority applicant).

The County does not seriously contend that Lee has not satisfied this burden and we conclude that she clearly did. Lee, who is of Chinese extraction, was told by Lambertson that she was qualified. Nonetheless, Lambertson testified that Lee had not been on his list of the top three or four candidates from which he made his final selection. Finally, the job went to a white woman.

B. Employer's response. Having found that the Commission was correct in concluding that Lee carried her initial burden, we move to the second step of the analysis. At this juncture the County's articulation or evidence must raise a genuine issue of fact as to why it did not hire Lee....