KRIS POTTS, Complainant
NORSTAR COMMUNICATIONS GROUP, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.
The decision of the administrative law judge (copy attached) is affirmed.
Dated and mailed April 30, 2004
pottskr . rsd : 125 : 9
/s/ David B. Falstad, Chairman
/s/ James T. Flynn, Commissioner
/s/ Robert Glaser, Commissioner
In a complaint filed with the Madison Equal Opportunities Commission (MEOC) and cross-filed with the Equal Rights Division on May 6, 1998, Kris Potts alleged that he was discriminated against on the basis of disability, marital status and religion. Potts described his disability as "severe fibromyalgia, numbness and reoccurring stroke-like symptoms," his marital status as "single parent" and his religion as "Christian."
The MEOC began the investigation of Potts' complaint allegations. In response to the MEOC's request for more information regarding his complaint allegations, Potts submitted a 7-page written response on May 26, 1998. Potts' listed the following as the bases for his complaint:
Discrimination/Harassment on the Basis of Disability
Discrimination/Harassment on the Basis of Marital Status
Discrimination/Harassment on the Basis of Religion
Creating a Hostile Work Environment
Retaliation
Potts' correspondence made clear that what he was alleging as discrimination had for the most part occurred on March 13, 1998, during a so-called "60-day review" of his performance that Norstar president, J. Charles Sterin had conducted by telephone.
In response to Sterin's objection to the MEOC's jurisdiction in the case, in part because of an assertion that Norstar had never done any business in the City of Madison, this case was transferred to the Equal Rights Division for investigation in August 1998.
On October 19, 1999, the ERD issued an initial determination finding no probable cause to believe that Norstar had violated the Fair Employment Act.
Potts filed a timely appeal of the no probable cause determination. His appeal included an objection that the initial determination had not addressed his hostile work environment claims, and he disagreed with the Equal Rights Officer's conclusion that he had not submitted an acceptable amended complaint to add a retaliation claim.
ALJ Alice DeLaO conducted the probable cause hearing. In a decision issued on September 22, 2000, DeLaO concluded that there was no probable cause to believe the respondent violated the Act with respect to "compensation because of Potts' disability, marital status or religion" (1) or by terminating Potts' employment because of marital status or religion. However, DeLaO concluded that there was probable cause to believe Norstar had violated the Act by failing to reasonably accommodate a disability by requiring Potts to work at Norstar's office rather than at home. Further, DeLaO concluded that there was probable cause to believe that the respondent violated the Act by constructively discharging Potts due to his disability.
DeLaO noted in her decision that the respondent did not appear at the July 20, 2000 hearing, that prior to the hearing Sterin had stated that the respondent would not appear at the probable cause hearing because the respondent was in liquidation proceedings before the courts in Maryland and that the respondent would not have any assets to pay any judgment if a judgment were made in Potts' favor. (2)
DeLaO ordered Potts' claims that Norstar failed to reasonably accommodate his disability and that it had constructively discharged him by the failure to reasonably accommodate his disability be certified to the hearing section for a hearing on the merits. DeLaO dismissed Potts' claim that Norstar discriminated against him "in compensation because of disability, marital status and religion," and Potts' claim that Norstar terminated his employment because of his marital status and creed.
A NOTICE OF APPEAL RIGHTS enclosure attached to DeLaO's decision provided the following information:
The Administrative Law Judge has concluded that there is probable cause to believe that the Respondent has engaged in discriminatory practices with respect to some allegations in the complaint and that there is no probable cause with respect to other allegations in the complaint. The probable cause finding is not subject to appeal by the Respondent. The no probable cause finding may be appealed to the Labor, (sic) and Industry Review Commission, but only after the Equal Rights Division has issued a final decision on the entire case. You will be sent a notice of appeal rights when a final decision on the entire complaint is issued.
(Emphasis added.)
On October 13, 2000, the ERD sent the parties a Notice of Hearing on the Merits, listing the issues as whether the respondent had discriminated against the complainant by failing to reasonably accommodate a disability and constructively discharging the complainant due to his disability. The notice advised the parties that a hearing would be held on December 20, 2000, and that the administrative law judge would be Deborah Little Cohn. On October 23 ALJ Cohn received a letter identified as sent by "For Norstar, Ent., Ltd. Liquidation Trustees," which stated in part as follows:
Please be advised that Norstar Enterprises, Ltd., d/b/a Norstar Communications Group (a Maryland 'C' corporation) has been out of business since December 15, 1999 and has now been fully liquidated by the trustees as stipulated under Maryland Rules. All officers have been released from the board of directors and the board has been disbanded. J. Charles Sterin's services as an officer and board of directors member has been terminated and his final and limited role as registered agent of the corporation will end on or about December 15, 2000.
All creditors and claimants have been properly notified some months ago, and any and all potential claimants against J. Charles Sterin have also received notification from the U.S. Bankruptcy Court, District of Maryland. As you are certain to be aware, all actions by any and all creditors have been stayed and it is a violation of U.S. Bankruptcy Code (S362) for any other jurisdictions to take any action, or to continue any direct contact via mail notifications or otherwise, with Dr. J. Charles Sterin.
During the December 20 scheduled hearing, Potts indicated that he believed that his complaint had also alleged that Norstar had constructively discharged him because he had opposed a discriminatory practice under the Act.
In the decision that ALJ Cohn subsequently issued in September 2001, Cohn states that After reflecting on the procedural history of Potts' case, she concluded that "Because of the complicated investigative process in this case and Potts' clear intent to include a retaliation claim as part of his complaint, [she] decided to allow Potts to file an amended complaint adding the retaliation claim prior to scheduling a second day of hearing."
Potts filed an amended complaint with the ERD on January 31, 2001, alleging that he was "constructively terminated in retaliation for challenging my employer (Chuck Sterin, president) during a review that a number of his actions (detailed in the original complaint and detailed statement) were illegal civil rights violations."
ALJ Cohn then sent a letter dated February 6, 2001, to Sterin informing him that she had decided to accept Potts' amended complaint. Cohn enclosed a copy of the amended complaint with her letter. Cohn proposed that the retaliation claim not be remanded for investigation, that the parties stipulate that the retaliation claim be heard at the scheduled continued merits hearing on March 16, 2001, and that if she did not hear from Sterin within 15 days of her letter she would assume Sterin had no objection. (3)
Cohn's February 6 letter to Sterin was returned to the Division unopened on February 26, 2001.
Norstar did not appear for the hearing on December 20, 2000, or March 16, 2001.
Cohn issued her decision on the merits on September 6, 2001. Included among the preliminary matters related in her decision was a statement by Cohn that she understood from an October 23, 2000 letter she received from the respondent that Norstar was engaged in a bankruptcy proceeding. Cohn stated that when she contacted the U.S. Bankruptcy Court in Maryland, however, she learned that Sterin, the president of Norstar, was an individual debtor in a Chapter 7 proceeding.
Cohn concluded that Potts failed to prove by a preponderance of the evidence that Norstar had violated the Wisconsin Fair Employment Act by refusing to reasonably accommodate a disability, or by constructively terminating Potts' employment because of disability or in retaliation for opposing a discriminatory practice.
Cohn stated the following in a memorandum opinion included with her decision:
Based on the nature of the testimony and the evidence that Potts presented at the hearing in this matter, it is impossible for the Administrative Law Judge to find that Potts has proven by a preponderance of the evidence that Norstar failed to reasonably accommodate a disability. Although Sterin apparently informed Potts on March 13, 1998, that he could no longer work out of his home, the Administrative Law Judge is unable to discern that Sterin made that comment on that day because of a discriminatory motive based on disability.
In addition, the Administrative Law Judge is not convinced that Norstar constructively discharged Potts' employment because of disability or in retaliation for Potts informing Sterin that he might file a discrimination complaint. She is not convinced that the reason that Sterin told Potts on March 13, 1998, that he would either be working part time or on an on-call basis for Norstar from then on and that he would have to relocate to Maryland for 60 days was either because of a discriminatory motive based on disability or in retaliation for Potts' comment about filing a discrimination complaint. The Administrative Law Judge agrees with Potts' opinion that Sterin was setting Potts up to quit his employment by making the conditions of his employment with Norstar untenable, however, she is unable to conclude that Sterin was motivated by the discriminatory reasons that Potts believes he was. She believes that it is more likely that that (sic) Sterin was trying to get rid of his employees as easily as possible because Norstar was a failing business.
The NOTICE OF APPEAL RIGHTS enclosure attached to ALJ Cohn's September 6, 2001 decision listed Potts' address as "P O Box 39 MC FARLAND WI 53558." This is the address Potts had provided on the amended complaint he filed with ALJ Cohn on January 31, 2001. However, Cohn's decision itself lists Potts' address as "P.O. Box 930361 Verona, Wisconsin 53593-0361". (A note by Cohn in the case file dated "3/2/01", when she requested that a notice of continued hearing be sent to the parties for March 16, 2001, states "Put address for Potts on Notice as P.O. Box 39, McFarland, WI 53558 but mail it to him at 506 W. Verona Ave, # 205, Verona, WI 53593.") It is unclear how the address for Potts listed on the decision came about.
The NOTICE OF APPEAL RIGHTS enclosure attached to ALJ Cohn's decision informed the parties in part as follows:
The attached decision is a final decision. Any party who is dissatisfied with the attached Decision and Order of the Administrative Law Judge, or with earlier nonfinal decisions, may file a written petition for review by the Labor and Industry Review Commission.
(Emphasis added.)
Whatever address was used to send ALJ Cohn's decision/Notice of Appeal Rights enclosure to Potts, Potts received the decision/appeal enclosure since he filed a timely petition for commission review of Cohn's decision.
In his petition for review filed with the ERD on September 20, 2001, Potts wrote:
Please accept this letter as notice that I am exercising my right to appeal the Administrative Law Judge's decision in the matter of Kris Potts vs. Norstar Communications Group ERD # 199803190, which I received on September 15, 2001, and which was dated September 6, 2001.
Due to my disability, I would appreciate a briefing schedule that allows for a first brief due no earlier than 120 days from receipt of the schedule, and a final brief due no sooner than 45 days from the receipt of any reply brief.
(Emphasis added.)
Potts' petition thus does not indicate that he is appealing from ALJ DeLaO's dismissal of his claims that Norstar discriminated against him "in compensation because of disability, marital status and religion," and that Norstar terminated his employment because of his marital status and creed.
In a letter dated October 3, 2001, Potts wrote to the Division inquiring about the status of his appeal sent on September 20, 2001.
On October 11, 2001, the Division issued its standard letter of acknowledgement after the filing of a petition for review of an ALJ's decision, informing the parties that the case was being forwarded to LIRC, and that the commission's review of the case would be based on a summary of the testimony prepared by an ERD legal assistant, unless an acceptable transcript was prepared. Since Potts had filed the petition in this case, the October 11 letter was addressed to the respondent, with a "cc" notation at the bottom of the letter, indicating that a copy of the acknowledgement letter had been sent to Potts.
It is not evident from the case file what address the Division used for Potts when it sent Potts a copy of the October 11 acknowledgement letter.
On August 19, 2002, the commission sent the parties a letter advising them that the commission had just received the file and completed summary of proceedings. The commission's letter set forth a briefing schedule, which called for Potts' submission of his initial brief by February 19, 2003, and stated that a copy of the summary of proceedings was enclosed. The commission's letter utilized the address for Potts listed on Cohn's decision and was sent to him at "P.O. Box 930361 Verona, Wisconsin 53593-0361"
In a letter to ALJ Cohn dated January 27, 2003, Potts stated that he wrote on about May 6, 2002, and previously on September 20 and October 3, 2001 appealing Cohn's decision, and that "At that time I requested a briefing schedule." Potts wrote that to date he had received absolutely no reply to his letters. (4) Potts wrote "should any decision be in process with any agency, including the Labor (sic) Industry Review Commission, I once again formally protest any such process not including briefs and/or any decision absent briefs."
Cohn wrote to Potts on January 29, 2003, informing him that LIRC was responsible for establishing a briefing schedule regarding his appeal, and that she was forwarding the matter to the commission.
Potts then contacted the commission on January 30, apparently asserting that "at his hearing" he had requested an opportunity to file a brief with ALJ Cohn, but never heard anything and then got her decision. Further, Potts apparently asserted that he never received the letter acknowledging his petition for review, the commission's briefing schedule or the summary of proceedings. In a letter to Potts dated January 31, the commission noted that while these documents had not been mailed to Potts' last known address they had not been returned as undeliverable, however, another briefing schedule would be issued. A new briefing schedule was issued, which called for Potts' submission of his initial brief postmarked by April 17 and his reply brief postmarked by June 3, 2003.
Subsequently, in a letter to the commission dated February 14, 2003, Potts alleged that he had significant evidence that Sterin and Hadrych (vice president of operations and assistant to Sterin) "knowingly and intentionally engaged in violations of the state statutes, including numerous felonies, in the course of investigations and hearings by numerous state, regional and local agencies and officers, including those conducted by ALJ Cohn." Potts therefore requested that the briefing schedule be placed in abeyance "until such a time as local, county and state authorities with potential jurisdiction over and interest in the criminal acts of Sterin and Hadrych have an opportunity to review the information, documents and evidence in my possession in support of such possible action." Potts asserted that "to not hold [the briefing schedule] in abeyance pending the outcome of such an investigation would effectively create an insurmountable prejudice to my right to fair due process in this case."
By letter dated February 14, 2003, the commission denied Potts' request to hold the briefing schedule in abeyance based on his allegations of improper and illegal conduct by Norstar, but permitted him to brief any reasons he asserted as to why the commission should not issue its decision in the normal course after reviewing the evidence and briefs submitted.
Subsequently, on March 26 the commission received written correspondence from Potts requesting that the commission order the Division to reopen his case before ALJ Cohn "for a brief additional hearing of substantial, relevant, compelling and probative new evidence." As reason for this request, Potts asserted that he had "a just discovered tape recording and a recently issued letter from Norstar partner, Vice President and Senior Technical Director James Ewing, who previously refused to cooperate in the case." Potts asserted that "the weight of this newly discovered evidence and information is not just or primarily cumulative or likely to lead ALJ Cohn to the same adverse decision."
Potts stated that the tape recording was made unknowingly as a result of a system he had set up to record harassing calls around the end of September/beginning of October 1997, when Sterin called to offer him the Production Manager position. Potts stated that after losing his position with Norstar in March 1998, he was forced to move to a smaller apartment and packed his belongings away, most of which went into storage. Potts states that after he moved again on March 8, 2003, to an even smaller apartment, he was forced to go through every box of his belongings to discard what was unneeded and came across a collection of old tapes, one of which he discovered had recorded his September/October 1997 conversation with Sterin.
With respect to the tape recording, Potts asserted that "a re-opened hearing would.provide an opportunity to right a wrong by providing me with a full and equitable hearing on a matter that was complicated and manipulated by the prohibited acts, including obstruction of justice and false swearing, of the Respondent's only two representatives on the record, Sterin and Hadrych."
Potts stated that he requested that the case be reopened to also consider the content and weight of Ewing's letter for the same reason. The letter of James Ewing that Potts is referring to is a letter dated February 6, 2003, that Ewing purportedly wrote to the Dane County Clerk of Courts.
Potts asserted that at the reopened hearing he intended to demonstrate through this "newly discovered evidence" that numerous statements made by Sterin and Hadrych can now be irrefutably proven to have been knowingly and maliciously false. Potts included among the false statements that 1) "Sterin lied in his written statements to the Department in which he said that he had no idea about my personal faith life and had no related conversations about it with me," 2) "Sterin lied in his written statements to the Department in which he said that he did not know nor discuss marital status and family situations with me," 3) "Sterin lied in his written statements to the Department in which he said that my salary was to have been $30,000, or later $45,000, rather than the '$60,000-plus' I have always claimed." and 5) "Sterin and Hadrych lied in their written statements to the Department in which they said that I was hired only for the position of Travel Coordinator."
The commission informed Potts in a letter dated March 26, 2003, that before a determination could be made that a case warranted a further hearing due to newly discovered evidence, the commission would need to consider what was being asserted to be newly discovered evidence in conjunction with the existing evidence of record and therefore at this time his request to reopen his case was denied. The commission informed Potts to incorporate his arguments in support of a need for a further hearing on the basis of newly discovered evidence with his brief under the existing briefing schedule.
On April 1 Potts called to complain that he was being given instructions about how to proceed with his claim of newly discovered evidence that was inconsistent with what he had been told in a prior case he had before the commission, and requested an extension of the existing briefing schedule.
Following a letter from Potts dated April 2, in which he continued to debate how his request for reopening the hearing should be handled, in a letter to Potts dated April 4 the commission requested that he make his arguments in the context of the briefing schedule, and agreed to allow him a 90-day extension in which to submit his brief. Potts left a voice mail message with the commission on April 15 agreeing to submit his brief in 90 days.
On July 15, 2003, the commission received Potts' initial brief. No responsive brief was filed on behalf of the respondent. However, on August 27, 2003, Potts filed an "Amendment to my initial appeal brief."
DISCUSSION
ALJ Cohn concluded that Potts failed to prove by a preponderance of the evidence that Norstar constructively discharged him because of disability or in retaliation for opposing a discriminatory practice. A constructive discharge occurs when, due to a discriminatory reason, an employer has made an employee's working conditions so intolerable that the employee is forced into an involuntary resignation. Waedekin v. Marquette University (LIRC, 03/05/91); Bartman v. Allis- Chalmers Corp., 799 F.2d 311, 314 (7th Cir. 1986), cert. denied, 107 S. Ct. 1304 (1987). To show unlawful retaliation a complainant must show that: (1) he engaged in statutorily protected expression; (2) he suffered an adverse employment action; and (3) a causal connection exists between the protected expression and the adverse action. Acharya v. Carroll, 152 Wis. 2d 330, 340, 448 N.W.2d 275 (Ct. App. 1989); Kannenberg v. LIRC, 213 Wis. 2d 373, 395, 571 N.W.2d 165 (Ct. App. 1997). The ALJ concluded, in agreement with Potts, that Sterin was setting him up to quit his employment by making the conditions of his employment with Norstar untenable. However, she was unable to conclude that Sterin was motivated by the discriminatory reasons that Potts believes he was. The ALJ believed that it was more likely that Sterin was trying to get rid of his employees as easily as possible because Norstar was a failing business.
Potts argues that based on the evidence presented the commission should reverse the ALJ's decision and rule in his favor. Potts argues that the ALJ's determination that Sterin constructively terminated his employment for financial reasons "can only be attributed to a set of circumstances and considerations by Ms. Cohn that constitute a violation of my rights to due process, state statutes and administrative law; errors in law; and a serious abuse of discretion."
As evidence of a due process violation, Potts references the ALJ's prefatory comments at the beginning of her decision about the October 23, 2000 letter she received regarding Norstar, from which the ALJ inferred that Norstar was engaged in a bankruptcy proceeding, (5) and a December 1, 2000 letter from Attorney Tsein that confirmed that Sterin was an individual debtor in a Chapter 7 proceeding. Potts argues that the ALJ "go[es] to great length to address extra-hearing communications between Norstar, Sterin and attorney Christopher Tsein (on Norstar's behalf) and ALJ Cohn about Norstar's alleged financial standing. No such evidence of any sort was ever offered at hearing by the Complainant or Norstar (which, as the decision notes, never appeared.)" Potts argues that while such correspondence is not part of the hearing record unless entered into evidence by one of the parties, it seems clear that the ALJ relied quite heavily, if not exclusively on such correspondence and communications in rendering her decision. Potts argues that it seems quite likely that this correspondence "resulted in Ms. Cohn drawing conclusions (erroneous as they were) on the issue of the potential collectability of any possible award and that she illegally, if also unintentionally misapplied those conclusion (sic), with absolutely no supporting evidence, to the question of possible 'legitimate non- retalaitory' (sic) motives for the Complainant's alleged termination."
Additionally, with respect to financial reasons as the basis for the termination of his employment, Potts argues that it wasn't until the October 23, 2000 letter, "that Sterin first asserted that Norstar had any financial difficulties and that they were, for the first time in any document, claiming to be 'liquidating' company assets." Potts argues that Norstar never claimed financial reasons were a/the reason for his alleged termination, nor could it, over a simple issue of proximity to his departure.
Further, Potts argues that case law makes it clear that the "rebuttal presumption to offer a legitimate non-retaliatory reason for termination rests on the respondent" and that the respondent never did do so in writing.
Further, Potts argues that while the ALJ believed the primary reason for his termination was due to the fact that Norstar was a failing business, Norstar repeatedly told the ERD that he was terminated for cause for poor performance and failing to comply with review procedures.
Finally, Potts argues that while the ALJ believed that he was constructively discharged because of Norstar's failing business, that conclusion is in contradiction to all documents, letters and the tape entered into evidence at the hearing. Potts argues that "Sterin's call to me on March 18 [1998] played at hearing make[s] it clear I was not terminated at all" and that "the numerous letters back and forth between the parties in the weeks following the review make it clear that Norstar wanted me to stay on/return as an employee at a higher pay scale than I had been compensated at previously." (Emphasis in original.)
The commission has affirmed ALJ Cohn's decision, however, as there is considerable evidence that supports her decision. First of all, while Potts argues that the ALJ violated his right to due process by relying on "extra-hearing communications" from Sterin and his counsel to conclude that Sterin terminated his employment for financial reasons, there is substantial evidence in the record itself that supports the ALJ's decision that Norstar's failing business was the reason for Sterin's constructive termination of his employment. For instance, Potts himself testified that "As my work progressed, I began to grow concerned that Dr. Sterin had misrepresented the nature and scope of Norstar's productions and stature. For example, despite my efforts to develop a plan to save Norstar hundreds of thousands of dollars in the first year alone by doing its travel business in specific ways, I found out that Norstar was not in production with any of its projects, making it impossible for me to realize the income Dr. Sterin told me I would make." (Synopsis, Dec. 20, 2000 hrg., p. 6) Potts testified that "It took Norstar two and a half months to issue me a corporate credit card for travel and just a week later, much to my surprise, the card was 'maxed out.' It turned out that the card only had a $10,000.00 limit, forcing us to use Mr. Ewing's personal credit cards. I began to wonder about Norstar's financial health. I was continually told that there was a cash flow problem due to contract problems with the Frank Lloyd Wright project." Id. Potts himself also wrote in his May 26, 1998 correspondence to the MEOC that "During that time [the next few days after March 13, 1998], I also discovered that Mr. Sterin had made numerous misrepresentations to me in my interview, and during my term of employment, regarding the nature and scope of Norstar's various production projects. Among the most troubling revelations was that the multi-million dollar Legacy Project and the Digs Project were not 'done/signed deal(s),' as he had stated, and that they were, in fact, in serious jeopardy, both contractually and financially." (Exhibit 32, p. 6.) Moreover, in the secretly taped recording of his conversation with Sterin on March 18, 1998, referencing a conversation of a few days earlier with Sterin's assistant, Cheryl Hadrych, Potts states that Hadrych said to him:
"You're basically right Kris, we can't afford the position now, we should of simply said we can't afford it, we're in some financial trouble. Can we put you out in the wings?"
(Exhibit 6)
In addition to the above, Potts entered into evidence at the hearing a statement from one of his former colleagues dated May 31, 1998, which reads, in part, as follows:
What [Dr. Sterin] did not tell Mr. Potts [at the time of his interview] was that, at the time, Norstar had no formal contract with either Disney or the Frank Lloyd Wright Foundation. In fact, Norstar had never signed a single contract to produce anything for anybody. It was a start-up company, with a 100% negative cash flow.
(When I left in February of 1998, it had yet to sign a single deal, or to make a single dollar - the bills were still being paid entirely out of the partner's pockets.). .
By Christmas, Disney had formally rejected the Digs proposal, and by the time I resigned, it appeared that the Frank Lloyd Foundation was looking for ways to get out of its involvement with Norstar. Though Dr. Sterin may have sincerely believed when interviewing Mr. Potts that his company would be in production for most of 1998, it was becoming increasingly clear that there would be no actual shooting at any foreseeable time. .
By early 1998, Dr. Sterin had assembled a strong professional team, and had taken out leases on two separate office buildings. One was large enough to house a small production studio and the other had a significant amount of refinishing done to it. With no work coming in the door, he was having difficulty paying the invoices for work already done by his team members. He began trying to cut his ties as cheaply as possible.. Not only did I think that the company was on the verge of going bust, I was beginning to worry about any legal liability I might incur by continuing to act as it's representative..
Additionally, with respect to financial reasons as the basis for Potts' termination of employment, while it is true that it was not until Sterin's October 23, 2000 letter to Cohn (and Sterin's prior July 6, 2000 memo to ALJ DeLaO) that Norstar first claimed to be liquidating company assets, Potts' argument that this could not have been the reason for his termination as this date was not in close proximity to his departure, necessarily assumes a need to rely on Sterin's October 23 letter (or his July 6 memo) to conclude that Norstar's financial difficulties was the reason for his termination. As discussed above, however, Potts himself presented substantial evidence regarding Norstar's financial difficulties, which was in close proximity to his termination, that supported a showing that the company's financial difficulties was the reason for the termination of his employment. Indeed, in the tape recording of Potts' conversation with Sterin, Potts states that on either March 16 or 17, 1998, Sterin's assistant, Hadrych, said to him "You're basically right Kris, we can't afford the position now, we should of simply said we can't afford it, we're in some financial trouble. Can we put you out in the wings?"
Further, while Potts' understanding of the respondent's burden in a discrimination case is essentially correct, the respondent's burden of producing a legitimate, nondiscriminatory reason for its actions can be met by facts presented as part of the complainant's case-in-chief. Cortez v. City of Milwaukee (LIRC, 01/31/01); Browder v. Best Foods United of CPC North America (LIRC, 01/09/87). Again, there was a significant amount of evidence produced by Potts himself sufficient for the ALJ to conclude that Norstar's failing business was the reason for the termination of his employment.
Potts' further argument that the ALJ's belief that his termination occurred due to the fact that Norstar was a failing business should not be upheld because Norstar repeatedly told the ERD that he was "terminated for cause" is unconvincing. This argument suffers from two shortcomings. First, at the expense of being repetitive, it bears repeating that Potts himself presented substantial evidence about events and circumstances in close proximity to his termination regarding Norstar's financial difficulties that supported a showing that the company's financial difficulties was the reason for the termination of his employment. This in itself provides sufficient reason to discount what Norstar told the ERD what caused Potts' termination of employment. Second, the Supreme Court has held that "The ultimate question is whether the employer intentionally discriminated, and proof that 'the employer's proffered reason is unpersuasive, or even obviously contrived, does not necessarily establish that the plaintiff's proffered reason . is correct.' " Reeves v. Sanderson Plumbing Products, 530 U.S. 133, 146-147 (2000), citing, St. Mary's Honor Center v. Hicks, 509 U.S. 502, 524 (1993).
Finally, while Potts asserts that he was not constructively discharged because of Norstar's failing business since Sterin maintained that he was not terminated in their March 18 conversation and in the following weeks made it clear that Norstar wanted him to stay on/return as an employee, Potts himself has indicated that these actions were just a ploy by Sterin. In his brief to the commission Potts asserts:
Moreso, Norstar attempted to retain me in letters after Wednesday, March 18, the night in which Sterin stated in the recording at hearing that I should consult an attorney and I stated and implied that I would proceed against him legally. As Sterin already knew from our interview discussions about a previous termination for opposing discrimination.I was not afraid to do so with an employer, if right and necessary. Given his actions against me, I believe Sterin knew that I might/would with him, as well, so he made such offers in an effort to hide his acts of discrimination, harassment and retaliation from the review of five days earlier, knowing full well I could not and would not accept such an offer from someone who had treated me as brutally and inappropriately as he did. . .
(Potts' initial brief, p. 33.)(Emphasis added.)
As an alternative to outright reversal of the ALJ's decision, Potts has requested that the commission order the ERD to reopen this case before ALJ Cohn in light of "newly discovered evidence and other procedural and legal deficiencies."
In order to justify a reopening of the hearing on the basis of newly discovered evidence, it must be shown that the evidence is sufficiently strong enough to reverse or modify the administrative law judge's decision and that such evidence could not have previously been discovered by due diligence. Tate v. Rouse- Milwaukee, Inc. (LIRC, 05/16/95); Whipp v. DePaul Rehabilitation Hospital (LIRC, 02/24/88).
As newly discovered evidence, Potts asserts that during the midst of his appeal to LIRC he discovered a taped recording of a conversation between Sterin and himself just days before he was formally hired that had been made unbeknownst to him as a result of a system to set up to record harassing calls. Among the things Potts asserts that this tape shows are that: 1) He was hired at a salary of $60,000 and that Sterin and Hadrych repeatedly lied to the ERD, MEOC and the "DWD Wage Division" about his actual salary; 2) it indirectly supports his claim on the issue of the "departure package" of severance pay; 3) he was hired as the Production Manager and that Sterin and Hadrych lied to the ERD by claiming that he was hired as a "Travel Office Manager"; 4) Sterin and Hadrych engaged in "false swearing, perjury and obstruction" when they told the ERD they had no knowledge of his family circumstances; and 5) it demonstrates the truthfulness of his account of virtually every claim made by him and the untruthfulness of the respondent's allegations and presentation of facts in their letters to him following his departure and to the ERD.
As additional newly discovered evidence, Potts asserts that at about the same time he learned of the tape recording, he also learned of a February 2003 letter that James Ewing wrote to the Dane County Circuit Court, and that he "discussed its revelations with another knowledgeable party and Mr. Ewing." Potts asserts that "Those communiqu‚s reveal that Norstar was not liquidated or dissolved as Mr. Sterin claimed in the false letters sent to ALJ Cohn. According to Ewing's letter and comments to the court, he was involved in legal proceedings, along with Sterin and others, relating to the sale of Norstar to another party for millions of dollars around or after Ms. Cohn issued her decision." (7) Potts also asserts that Ewing's letter supports his claims about the nature of his employment and departure agreement, Sterin's treatment of him and Sterin's credibility.
Assuming for purposes of argument that the evidence Potts wants to present at a further hearing could not have previously been discovered by due diligence, Potts has not shown that this evidence is sufficient to reverse or modify the ALJ's decision in this case. First of all, with respect to the tape recording, the ALJ made findings of fact consistent with what Potts claims the newly discovered tape shows. Neither Sterin nor Hadrych appeared at the hearing, and it is apparent from the ALJ's decision that she found Potts to be a credible witness. Furthermore, Potts does not assert that the tape establishes that his employment was not terminated because Norstar was a failing business. Second, regardless of whether or not Norstar was liquidated or dissolved in October 2000, or sold for millions around the time the ALJ issued her decision, this likewise fails to provide a reason to reverse or modify the ALJ's decision. The critical issue in this case concerns the status of the respondent's business at the time of Potts' termination in March 1998, not the company's status some 19 months or more after March 1998. As discussed above, the testimony and evidence presented strongly suggests that Potts' employment was terminated because in March 1998 Norstar was a failing business. Finally, Potts' assertion that Ewing's letter supports his claims about the nature of his employment and departure agreement, Sterin's treatment of him and Sterin's credibility also fail to provide reason to reverse or modify the ALJ's decision. The ALJ made findings of fact that are consistent with his claims about the nature of his employment and departure agreement, Sterin's treatment of him, and as evidenced by those findings, she found Potts to be a credible witness.
In a subsequent submission that Potts describes as an "Amendment to my initial appeal brief," Potts again requests that his case be reopened, asserting that since discovering the tape recording, he has "recently discovered additional material" in the form of recorded conversations with Sterin, Hadrych and Ewing. Potts argues that the conversations with Sterin and Hadrych confirms his account of the events that transpired during his review, and that his conversations with Ewing confirm that there had been no misconduct or performance deficiencies on his part and that the company was financially able because it offered repeatedly to continue him in employment full time. However, even assuming this material could not have been previously discovered by due diligence, such evidence does not provide cause to reverse or modify the ALJ's decision. Again, that Potts' recorded conversations with Sterin and Haydrych confirms his account of the events during his review is immaterial because the ALJ made findings of fact consistent with Potts' account of his review. As for the recorded conversations with Ewing regarding Norstar's "financial ability" based on its offers to continue Potts' in employment full time, the testimony and evidence that Potts presented at the hearing regarding Norstar's financial condition at the time of his departure strongly indicates that Norstar was not in a financial position to continue his employment. Furthermore, Potts' himself has conceded that he believes the reason he was offered continued employment was because Sterin feared he would proceed against him legally, and that Sterin knew full well that he would not accept such offer.
Accordingly, the commission hereby denies Potts' request to reopen the hearing before ALJ Cohn.
Next, apparently as an alleged procedural deficiency, Potts appears to argue that he was denied due process because he had requested but was not allowed to submit written arguments to the ALJ before she issued her decision. Whether or not Potts had actually asked the ALJ for an opportunity to submit written arguments, however, is not entirely clear. For example, after the issuance of the ALJ's decision on September 6, 2001, Potts filed a letter petition for review with the ERD on September 20, 2001, requesting that his letter be accepted as notice that he was exercising his right to appeal the ALJ's decision. In this letter Potts then wrote: "Due to my disability, I would appreciate a briefing schedule that allows for a first brief due no earlier than 120 days from receipt of the schedule, and a final brief due no sooner than 45 days from the receipt of any reply brief."
Subsequently, on October 3, 2001, Potts wrote to the ERD inquiring about the status of his appeal and the briefing schedule requested.
Thereafter, on January 27, 2003, Potts wrote to ALJ Cohn. In this letter Potts wrote:
On about 6 May 2002, and previously on 20 September 2001 and 3 October 2001, I wrote appealing the ALJ's decision in the matter of Kris Potts v Norstar Communications, Inc. At that time, I requested a briefing schedule. To date, I have received absolutely no reply to my letters. In spite of being informed during two phone calls to the department that I should wait patiently due to a heavy case load, this significant delay without any formal communication seems neither fitting nor proper. As a result, should any decision be in process with any agency, including the Labor (sic) Industry Review Commission, I once again formally protest any such process not including briefs and/or any decision absent briefs.
(Underlining emphasis added.)
By letter dated January 29, 2003, ALJ Cohn wrote to Potts. Cohn advised Potts that LIRC was responsible for establishing a briefing schedule.
In his initial brief to the commission at page 6, Potts writes:
Following the hearing before ALJ Cohn in this matter, the Complainant requested in writing that a briefing schedule be set. After a lengthy period without any reply, he again requested such a schedule. Again, no notice was sent or received. Eventually, having received no briefing schedule and/or notice that the file was available for review - and, this, having been not allowed to submit a brief in this case - the Complainant received a written decision from ALJ Cohn.
The commission notes that in Potts January 30 contact with the commission he asserted that "he had requested at his hearing an opportunity to file a brief with Deb Cohn. Never heard anything and then got her decision." However, the commission is not convinced that Potts ever requested an opportunity to file a brief with the ALJ before she issued her decision. However, even assuming that he had requested but not been allowed to submit a brief prior to the ALJ's issuance of her decision the commission would not conclude that this constituted a denial of due process. First of all, a complainant is not entitled to submit written arguments to the ALJ as a matter of right. Wisconsin Administrative Code § DWD 218.20 (1) provides as follows:
After the close of the hearing, including any briefs which may be allowed by the administrative law judge, the administrative law judge shall prepare a formal written decision which shall include findings of fact, conclusions of law and an order, and which may be accompanied by an opinion.
(Underlining emphasis added.)
Based upon the use of the words "shall" and "may" in this provision, it is evident that the allowance of briefs by an ALJ is discretionary. Furthermore, while Potts may not have had an opportunity to submit a brief to the ALJ, he has been allowed ample opportunity to state his position in the briefs he has submitted to the commission.
Next, apparently on the basis of what he views as favorable findings by ALJ Cohn regarding Norstar's hiring him at a yearly salary of $60,000.00 and/or his newly discovered evidence showing that he was hired at a yearly salary of $60,000.00, Potts requests that the commission order the Labor Standards Bureau to modify its earlier decision on his wage claim to "reflect the proper amount owed him." Potts asserts that the Labor Standards Bureau issued a decision erroneously calculating unpaid compensation due him utilizing a salary of $32,000.00. In the alternative, Potts requests that the commission issue an order reopening his wage claim before the Labor Standards Bureau for the admission of his newly discovered evidence. However, the commission is unable to grant either of Potts' requests, as the commission has no review authority over wage claims before the Labor Standards Bureau.
Additionally, irrespective of the commission's decision with respect to his above- mentioned requests, Potts also requests that the commission forward the record in this case to a number of authorities, including the Attorney General and the Dane County District Attorney. Potts requests that the record be forwarded to these authorities to consider, review and pursue numerous alleged criminal acts that Sterin and Hadrych committed before the ERD and the ALJ. Prevalent among Potts' allegations of criminal acts by Sterin and Hadrych is that they engaged in "false swearing," "perjury" and "obstruction of justice." (Other alleged criminal conduct that Potts cites is "solicitation," "conspiracy," "resisting/obstructing an officer," "fraudulent writings," "fraudulent data alteration," "forgery," "felony intimidation of a victim," "giving false information for publication," "compounding a crime," "harassment," "libel," "slander," and "defamation and threats to injure or accuse.") The commission concludes, however, that Potts should submit a copy of the record to these authorities if he wishes to pursue allegations of criminal conduct against Sterin and Hadrych.
Finally, the commission notes that in his August 27, 2003 brief to the commission Potts argues that ALJ Cohn "failed to address the matters of harassment and hostile work environment as noted in the original complaint." Potts had also made this argument about the equal rights officer in his appeal following the ERD's no probable cause initial determination. The only issues noticed for the hearing before ALJ Cohn, however, was a hearing on the merits as to whether the respondent had discriminated against Potts by failing to reasonably accommodate a disability and constructively discharging him due to his disability.
Exhibit 32, which is Potts' response to the MEOC's request for more information regarding his complaint allegations, does include a claim of "Harassment on the basis of Disability, Marital Status, Religion" and a claim of "Creating a Hostile Work Environment." This correspondence was available to the ERD when it began its investigation of Potts' complaint. Cohn did allow Potts to amend his complaint to add Potts' claim of retaliation. However, at no time was Potts ever requested/advised to amend his complaint to add a harassment/hostile work environment claim.
Perhaps the ERD has simply chosen to ignore Potts' hostile work environment claims because it concluded that this did not constitute a violation of the Act. In Wisconsin Administrative Code § DWD 218.06, the section of the administrative rules regarding the conducting of investigations by the department, § DWD 218.06(2) provides that:
If, during an investigation, it appears that the respondent has engaged in discrimination which is not alleged in the complaint, the department may advise the complainant that the complaint should be amended.
(Emphasis added.)
Whether or not this accounts for the Division's failure to address Potts' alleged hostile work environment claims, however, it would appear that Potts' claims of harassment on the basis of religion and marital status fail as a matter of law. In a claim alleging religious or marital status harassment, among other things, a complainant must show that the alleged harassment was based on the complainant's religion or marital status, and that such harassment was sufficiently severe or pervasive so as to alter the conditions of the complainant's employment and create a hostile or abusive working environment. (See, for example, Clark v. Plastocon, Inc. (LIRC, 04/11/03) (discussing proof necessary in a hostile work environment claim based on racial harassment.) Potts' claims of harassment all relate to assertions about what Sterin said during his review that Sterin conducted by telephone on March 13, 1998. Potts' claim of harassment on the basis of religion is that Sterin made a snide comment about how he "believed that he had hired an honest ethical guy when [he] took James' (Ewings') recommendation to hire [me]." Potts asserts that it was clear Sterin was implying that he had performed his job in a way that was inconsistent with his stated religious beliefs. Potts also asserts that Sterin "also suggested that I had somehow violated his trust by engaging in Christian activities while working for Norstar; when I challenged him on this, he agreed that I had not." Assuming for purposes of argument that what Potts asserts constituted "harassment on the basis of religion," Sterin's comments were not so severe or pervasive so as to alter Potts' working conditions or create a hostile or abusive working environment.
Potts' claim of harassment on the basis of marital status is that Sterin "angrily challenged me" for having asked Hadrych for the company's assistance in processing his court-ordered child support payments, that Sterin "read me the Riot Act" and "told me to shut up while [he was] talking when I tried to respond to his tirade," that Sterin threatened the possibility that Norstar would sue him for even suggesting that it was not complying with a child support order and swore regularly throughout this exchange, and that Sterin "continued to berate me using phrases like 'a person in your position,' " which Potts took to mean a "single father" and an employee needing Norstar's cooperation to meet the terms of a court order. However, assuming this accurately describes the conduct and comments of Sterin, Potts' assertions fail to show that Sterin's conduct and comments constituted "harassment on the basis of marital status." Under the WFEA " 'Marital status' means the status of being married, single, divorced, separated or widowed." Wis. Stat. § 111.32(12). (Emphasis added.) The specific thrust of Potts' claim here pertains to his obligations as a parent, who just happens to be single. A "single parent" is not a protected class under the Act.
As for Potts' claim of harassment on the basis of disability, he has asserted that this very same "harassment" created a working condition that Sterin knew he could not accept, resulting in the termination of his employment. Potts' claim of harassment on the basis of disability is that on March 13, 1998, Sterin asked why he was working from his home rather than Norstar's Middleton office, that he explained Sterin had known this for some time, and that Sterin "said he would no longer extend to me that reasonable accommodation for my handicapping condition." However, in view of the commission's agreement with Cohn's determination that Potts was constructively discharged not because of disability but because of Norstar's poor financial condition, the commission concludes that the alleged harassment on the basis of disability issue became a moot issue.
Finally, the commission notes that Potts has also made a claim of general harassment. Potts asserts that Sterin had promised to limit the review to 30 minutes but it lasted around 80 minutes. Further, Potts asserts that Sterin made disparaging remarks about a number of former employees, stating that had one individual not quit Sterin would have fired him and that he was "headed that same way as far as [Sterin] was concerned. However, this claim fails because there is no indication of any connection between this "harassment" and his membership in a protected class.
Appealed to Circuit Court. Affirmed December 14, 2004 (subject to modifications of the findings made by stipulation of the parties).
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(1)( Back ) Potts stated at the probable cause hearing that he was not alleging discrimination in compensation on the basis of disability, marital status or religion. Potts indicated that what he was alleging was that after his termination, Norstar partner, James Ewing, cited Biblical passages in an appeal to his Christian faith to forgive Sterin of his financial obligation to him. As disclosed in his May 26, 1998 correspondence to the MEOC, the financial obligation that Potts was referring to was a "departure compensation agreement" that Potts attempted to negotiate during the months after the termination of his employment.
(2)( Back ) In a memo to DeLaO dated July 6, 2000, Sterin stated that Norstar was undergoing a forced liquidation, in lieu of Federal bankruptcy under Maryland rules, as a direct result of a breach of contract by Norstar's principle funding source and subsequent IRS and State of Maryland tax liens and other judgments registered in the courts of Maryland.
(3)( Back ) DWD § 218.03(6) provides that "A complaint may be amended, subject to the approval of the department, except that a complaint may not be amended less than 20 days before hearing unless good cause is shown for the failure to amend the complaint prior to that time.. If the complaint is amended after the case has been certified to hearing, the chief of the hearing section or the administrative law judge may remand the complaint to the investigation section to conduct an investigation and issue an initial determination as to whether probable cause exists to believe that discrimination has been committed as alleged in the amended complaint.
(4)( Back ) The case file does not contain a letter dated on or about May 6, 2002, from Potts.
(5)( Back ) While ALJ Cohn inferred from the October 23, 2000 letter that it was being claimed that Norstar was in a bankruptcy proceeding, a close reading of that letter reveals that all this letter actually states is that: 1) Norstar has been out of business since December 15, 1999, and has now been fully liquidated by the trustees as stipulated under Maryland Rules; and 2) that some months ago any and all potential claimants against Sterin had also received notification from the Bankruptcy Court that all actions by any and all creditors have been stayed and that it was a violation of the Bankruptcy Code to take any action, or to continue any direct contact with Sterin. Also, as noted above in footnote 2, in Sterin's July 6, 2000 memo to ALJ DeLaO, what Sterin had stated was that "Norstar was undergoing a forced liquidation, in lieu of Federal bankruptcy under Maryland rules, as a direct result of a breach of contract by Norstar's principle funding source." (Emphasis added.)
(6)( Back ) While this exhibit is hearsay and a "crucial" or "essential" finding may not be based upon hearsay alone, the Wisconsin Supreme Court has not ruled on the extent to which administrative agencies may ground decisions on hearsay evidence, and any case, this exhibit simply corroborates the other evidence and testimony by Potts which indicates that the termination of his employment occurred due to financial reasons. See, Village of Menomonee Falls v. Wisconsin Department of Natural Resources, 140 Wis. 2d 579, 610, 412 N.W.2d 505 (Ct. App. 1987).
(7)( Back ) Potts attached a copy of the February 2003 letter purportedly written by Ewing to his brief to the commission. However, there is nothing in this letter about Norstar not having been liquidated or dissolved, or about any legal proceedings relating to the sale of Norstar.
(8)( Back ) The only written correspondence from Potts in the case file that requests a briefing schedule is his correspondence submitted after Cohn's decision.
uploaded 2004/05/03