STATE of Minnesota, by David BEAULIEU, Commissioner, Department of Human Rights, Petitioner, Appellant, v. RSJ, INC., d/b/a Jose‘s American Bar & Grill, et al., Respondents.
No. C1-94-2365
Supreme Court of Minnesota.
Aug. 29, 1996.
552 N.W.2d 695
PAGE, Justice.
Michael J. Black, St. Paul, for Respondents.
OPINION
PAGE, Justice.
The Minnesota Department of Human Rights (MDHR) seeks review of a court of appeals decision dismissing the MDHR‘s complaint against RSJ, Inc. and Joseph Schaefer (Schaefer). The complaint alleges that RSJ, Inc. engaged in unlawful sex discrimination, in violation of
After a hearing on the complaint, Administrative Law Judge Steve M. Mihalchick (ALJ) concluded that RSJ, Inc. had engaged in gender discrimination, in violation of
RSJ, Inc. and Schaefer sought review, and the court of appeals, in reversing: (1) dismissed the MDHR‘s complaint because of the MDHR‘s failure to issue a probable cause determination1 within 12 months after the charging parties’ verified charges of discrimination were filed as required by
The MDHR, in seeking our review, raises three issues:2
- Whether the court of appeals erred in holding that Schaefer could not be sued because he was not named as a respondent in the charging parties’ charges; and
- Whether the court of appeals erred in holding that the 12-month period in
Minn.Stat. § 363.06, subd. 4(1) , requires dismissal of the complaint; - Whether the court of appeals erred in holding that Schaefer could not be held liable for aiding and abetting discrimination by RSJ, Inc. because he was a shareholder and officer of RSJ, Inc.
We affirm as modified.
In 1989, RSJ, Inc. operated Jose‘s American Bar & Grill3 in the Butler Square Building in Minneapolis. All of RSJ, Inc.‘s shares were owned by Schaefer, his wife Linda Schaefer, and Mark Rutsick. The Schaefers owned 70% of the shares and Rutsick owned the remaining 30%. Operational decisions for RSJ, Inc. were made primarily by Schaefer. Jose‘s offered a casual menu, a fully stocked bar, and televisions showing sporting events. Jose‘s employed only waitresses as food servers. The waitresses and female bartenders were required to wear a uniform consisting of a denim skirt and a white oxford shirt bearing Jose‘s logo. Male line employees were required to wear a uniform consisting of a shirt and long pants. Managerial employees, whether male or female, also wore shirts and long pants.
On April 28, 1989, Schaefer implemented a new uniform policy for Jose‘s waitresses and female bartenders. The new policy required them to wear a uniform consisting of a loose-fitting white tank top and tight-fitting orange running shorts. According to Schaefer, the new uniforms were similar to the uniforms worn by waitresses working for the “Hooters” restaurant chain. Wearing the new uniform was a “condition of working” at Jose‘s. The uniforms for managerial employees and the other line employees did not change at this time.
As a result of the new uniform policy, six Jose‘s employees filed charges of discrimination with the MDHR. Two of the charging parties settled their claims prior to this appeal. The four remaining charging parties either quit or were fired for refusing to wear the new uniform. According to the ALJ‘s findings, the shorts, which were provided in extra small, small, and medium sizes only, were revealing, exposing at least one waitress‘s “thighs, butt, and pubic hair” and “[a]nyone looking [at the tank top] would be able to see their bodies down to their waist.”
Kathleen Luken filed a charge with the MDHR on July 10, 1989. By form letter addressed to “Joe Schaefer, Owner Jose‘s American Bar/Grill” dated July 13, 1989, the MDHR informed Jose‘s that Luken had filed a charge alleging that Jose‘s had engaged in sex discrimination in violation of
More than 35 months passed between the time Luken‘s charge was filed and the MDHR notified Jose‘s that the Commissioner of the Department of Human Rights (Commissioner) had found probable cause to credit the allegations that Jose‘s had engaged in unlawful discrimination against Luken. Jose‘s received that notice by letter dated June 22, 1992. The MDHR‘s investigation into the Lowrie, Lickteig, and Pucel charges lasted more than 31 months. By separate letters dated November 30, 1992, the MDHR notified Jose‘s that the Commissioner had found probable cause to credit the allegations that Jose‘s had engaged in unlawful discrimination against Lowrie, Lickteig, and Pucel. None of these letters made any reference to any probable cause finding related to Schaefer.
After the MDHR made its probable cause findings, Jose‘s and the MDHR engaged in unsuccessful conciliation. In May 1993, the assets of Jose‘s were sold to BAZ, Inc. for $300,000. Approximately six months later, on November 30, 1993, the MDHR issued its complaint naming Jose‘s and Schaefer as respondents. On April 26, 1994, Schaefer filed for Chapter 11 bankruptcy.
On February 11, 1994, Jose‘s and Schaefer moved the ALJ for summary dismissal of the complaint, arguing that: (1) the MDHR failed to make a finding of probable cause within 12 months; (2) the aiding and abetting charge against Schaefer was time barred; and (3) corporate shareholders, officers, and directors cannot be held individually liable for aiding and abetting the corporation in committing a tortious act. The ALJ denied the motion, and a hearing on the complaint took place on June 27, 28, and 29, 1994. On October 24, 1994, the ALJ issued his findings of fact, conclusions of law, and order.
We first address whether that portion of the complaint charging Schaefer with aiding and abetting discrimination, in violation of
Section 363.06 provides, in relevant part:
Subdivision 1. Actions. Any person aggrieved by a violation of this chapter * * * may file a verified charge with the commissioner * * *. A charge filed with the commissioner must be in writing on a form provided by the commissioner and signed by the charging party. The charge must state the name of the person alleged to have committed an unfair discriminatory practice and set out a summary of the details of the practice complained of. * * *
Subd. 2. Charge, issuance by commissioner. Whenever the commissioner has reason to believe that a person is engaging in an unfair discriminatory practice, the commissioner may issue a charge stating in statutory language an alleged violation of a particular section of section 363.03.
Subd. 3. Time for filing claim. A claim of an unfair discriminatory practice must be * * * filed in a charge with the commissioner within one year after the occurrence of the practice.
Section 363.06, subdivision 3, currently provides a one-year statute of limitations for filing a charge with the Commissioner. The limitations period begins to run at the
It is only after a charge is filed and probable cause to credit the allegations of discrimination is found that the MDHR can file a complaint against a respondent.
This is not a case where the MDHR did not know or have reason to know, within the time period for filing a charge, of Schaefer‘s involvement in the uniform change. The MDHR had ample information in its possession before the limitations period expired which put it on notice that Schaefer may have aided and abetted Jose‘s discrimination. The Lowrie charge alleges that Lowrie “overheard the owner Joe Schaeffer [sic], and his partner say that they were trying to sell legs and ass and what did we expect.” A questionnaire filled out by Pucel at the time she filed her charge identified Schaefer as having engaged in discriminatory conduct. Yet, inexplicably, the MDHR made no attempt to file a commissioner‘s charge under
According to the record, the first notice Schaefer had that he was to be held personally liable for aiding and abetting Jose‘s discriminatory practices came in the complaint dated November 30, 1993. The MDHR does not argue and the record does not provide any basis for equitable tolling of the one-year limitations period for filing the charge. When, as in this case, no charge has been filed by either a charging party or the Commissioner against the respondent alleging a discriminatory practice on the part of the respondent and the charges which were filed were not amended to include the respondent and no basis exists for tolling the limitations period, the claim is barred as untimely.4
Next, we address whether Jose‘s and Schaefer are entitled to have the complaint dismissed because the MDHR failed to make its probable cause determination within 12 months of the time the Luken, Lowrie, Lickteig, and Pucel charges were filed, as required by
The MDHR argues that the word “shall” as used in the phrase “the commissioner shall make a determination within 12 months after the charge was filed” is merely directory and contends that the court of appeals misconstrued the word “shall” by concluding that it was mandatory. The MDHR cites this court‘s 1937 decision in Wenger v. Wenger, 200 Minn. 436, 274 N.W. 517 (1937), for the general proposition that when the word “shall” is used in a statute that does not provide consequences for failing to comply with its requirements, the statute is directory and not mandatory. Arguing that
The MDHR‘s efforts to have us construe
Further, we have noted that the HRA is modeled after Title VII of the Civil Rights Act of 1964. Danz v. Jones, 263 N.W.2d 395, 398-99 (Minn.1978). Unlike the similar provision of Title VII as amended by
The legislature‘s clear purpose in enacting section 363.06, subdivision 4(1), was to expedite the resolution of discrimination charges filed with the MDHR. When the MDHR‘s probable cause determinations are delayed, that purpose is frustrated. In addition, such delays make resolution of discrimination charges more difficult: evidence and witnesses may disappear, memories may fade, assets may be wasted, and damages may continue to accrue. If the word “shall” is merely directory and not mandatory, the MDHR‘s incentive to act expeditiously, as evidenced by its failure to act or justify its failure to act in this case, is greatly diminished. The legislature‘s intent in enacting
Jose‘s argues that the MDHR‘s failure to make a timely probable cause determination, coupled with the prejudice it suffered as a result, should result in the MDHR losing jurisdiction to proceed further. However, as the Supreme Court noted in Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 2375, 45 L.Ed.2d 280 (1975), “[o]n these issues of procedural regularity and prejudice, the ‘broad aims of Title VII’ provide no ready solution.” While the Court was discussing Title VII, we see no difference in the HRA in that regard. We find nothing in the HRA which suggests that the MDHR‘s failure to make a timely probable cause determination is a jurisdictional bar to further proceedings. At most, the delay and any resulting prejudice raise equitable defenses to be resolved by the ALJ. EEOC v. Johnson Co., 421 F.Supp. 652, 656 (D.Minn.1975). In resolving these issues, the ALJ should be mindful that the relief, if any, granted to the respondent because of the MDHR‘s inaction may have an impact on the charging party. Any such impact should be minimized.7
We, therefore, hold that in all cases where the MDHR fails to make a determination of probable cause within 12 months after the filing of a charge, a respondent may seek appropriate relief from the administrative law judge. The relief granted
Today‘s ruling that probable cause determinations made 31 months or more after a charge is filed are per se prejudicial to the respondent, requiring dismissal of the complaint, shall be applied to the parties before the court in this case and prospectively to all human rights charges filed with the MDHR on or after the date of this opinion. See Turner v. IDS Fin. Servs., Inc., 471 N.W.2d 105, 108 (Minn.1991) (new rule of law generally applied to case before the court and to claims arising after the date of overruling decision).
We find the MDHR‘s unexplained delay in making the probable cause determination in this case troubling. The issues raised and the facts presented by Luken, Lowrie, Lickteig, and Pucel‘s charges are not complex and should not have required 31 or more months for a probable cause determination. Such unnecessary and unreasonable delay results in harm to charging parties and respondents alike. The MDHR would do well to heed the words of Benjamin Franklin: “If time be of all things the most precious, wasting time must be the greatest prodigality, since lost time is never found again; and what we call time enough always proves little enough. Let us then up and be doing, and doing to the purpose; so by diligence shall we do more with less perplexity.”
Affirmed as modified.
COYNE, Justice (dissenting).
I dissent. When Joseph Schaefer, who, with his wife, owned 70 percent of the shares of RSJ, Inc., d/b/a Jose‘s American Bar & Grill, and who appears to have been the officer active in the day-to-day operation of the establishment, imposed on the female wait and bartender staff a new required uniform as a condition of continued employment at Jose‘s, six employees filed discrimination charges with the Minnesota Department of Human Rights. The six complainants, one male and five female, had either quit their jobs or been discharged for their opposition to the uniforms, which they considered indecently revealing. The new uniforms, which were modeled on “Hooters” waitress uniforms—an oversized tank top and undersized shorts—replaced Jose‘s former waitress attire of white oxford cloth shirt and denim skirt. All five of the women alleged sex discrimination in violation of
The complaints were legitimate. After a hearing an administrative law judge found that RSJ, Inc., had engaged in sex discrimination and reprisal in violation of section 363.03; that Schaefer aided and abetted the violations and was a corporate officer responsible and personally liable for RSJ‘s discriminatory practices. The ALJ awarded the complainants compensatory and punitive damages of $75,710. In addition, he awarded the MDHR attorney fees and assessed a civil penalty of $3,000.
It is not contended that the evidence does not support the ALJ‘s findings and conclusions. No one disputes that the claimants’ charges were timely filed. And although Schaefer protests that the claimants did not charge him with aiding and abetting discrimination and reprisal, on at least one occasion, the MDHR‘s notice that a charge had been filed was directed to Joe Schaefer, Owner Jose‘s American Bar/Grill, so Schaefer is hardly in a position to contend that he did not understand that he was being charged as the actor. Despite the fact that the complainants met the statutory requirements for filing their claims, the fact that they proved
One hardly needs to resort to canons of construction to discern the legislative intention expressed in
It may well be that the volume of charges filed pursuant to section 363.06 far outstripped legislative expectations so that the legislature simply did not consider the possibility that its apparently generous time limitation would not be met, or it may be that the legislature relied on the long-established rule that a statutory provision setting the time within which a public official is to perform a duty—a statutory provision designed to secure the efficient accomplishment of public business—is deemed directory even when couched in terms such as “shall” or “must.” Wenger v. Wenger, 200 Minn. 436, 440, 274 N.W. 517, 519 (1937). This court has uniformly reaffirmed the principle set out in Wenger. E.g., Benedictine Sisters Benevolent Ass‘n v. Pettersen, 299 N.W.2d 738, 740 (Minn.1980); First Nat‘l Bank v. Department of Commerce, 310 Minn. 127, 131-32, 245 N.W.2d 861, 864 (1976).
Nevertheless, the majority has embarked on the unprecedented and hazardous mission of judicially fashioning a remedy which finds no support in either the Minnesota Human Rights Act or Minnesota case law. Ruling that the commissioner loses jurisdiction over the claim if he or she fails to meet the statutory time frame for determining whether there is probable cause to credit the allegations of unfair discriminatory practices, the majority, in one fell swoop, rewards the dilatory bureaucrat by clearing from the desk all overage complaints and releases the offender from responsibility for carrying on unfair discriminatory practices. Only the hapless victim, who has filed a verified charge in full compliance with the requirements of
In any event, I think it likely that the legislature will be shocked when it learns of the intention imputed to it by the majority. The majority‘s remedy for bureaucratic transgression or, more accurately, inaction appears to be in direct contravention of the legislature‘s directive for construction of the Human Rights Act.
The provisions of this chapter shall be construed liberally for the accomplishment of the purposes thereof. Nothing contained in this chapter shall be deemed to repeal any of the provisions of the civil rights law or of any other law of this state relating to discrimination because of race, creed, color, religion, sex, age, disability, marital status, status with regard to public assistance, national origin, sexual orientation, or familial status; but, as to acts declared unfair by section 363.03, the procedure herein provided shall, while pending, be exclusive.
Surely, the legislature could not be expected to anticipate that a rule of statutory construction considered well-established 59 years ago and uniformly followed until today would be jettisoned without warning. Equally certain is it that the legislature did not intend the Human Rights Act to become a trap for the unwary claimant and a vehicle for depriving a victim of unlawful discrimination of the right to assert a legitimate claim. Yet, that is the effect of the majority‘s decision, for section 363.11 provides that once the claimant files a charge with the commissioner, the procedure provided by the Human Rights Act is exclusive.
For the foregoing reasons I would reaffirm once more the principle of statutory construction articulated in Wenger, reverse the
KEITH, Chief Justice (dissenting).
I concur in the dissent of Justice COYNE.
Notes
Subd. 4. Inquiry into charge. (1) Consistent with clause (7), the commissioner shall promptly inquire into the truth of the allegations of the charge. The commissioner shall make an immediate inquiry when a charge alleges actual or threatened physical violence. The commissioner shall also make an immediate inquiry when it appears that a charge is frivolous or without merit and shall dismiss those charges. The commissioner shall give priority to investigating and processing those charges, in the order below, which the commissioner determines have the following characteristics: (a) there is evidence of irreparable harm if immediate action is not taken; (b) there is evidence that the respondent has intentionally engaged in a reprisal; (c) a significant number of recent charges have been filed against the respondent; (d) the respondent is a government entity; (e) there is potential for broadly promoting the policies of this chapter; or (f) the charge is supported by substantial and credible documentation, witnesses, or other evidence. The commissioner shall inform charging parties of these priorities and shall tell each party if their charge is a priority case or not. On other charges the commissioner shall make a determination within 12 months after the charge was filed as to whether or not there is probable cause to credit the allegation of unfair discriminatory practices * * *.(Emphasis added.)