ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEES
FILTER SPECIALISTS DAWN BROOKS AND
Timothy W. Woods CHARMAINE WEATHERS
Jones Obenchain, LLP Jay Lauer
South Bend, Indiana South Bend, Indiana
Shaw R. Friedman
Friedman & Associates, P.C.
LaPorte, Indiana
ATTORNEY FOR APPELLEE
MICHIGAN CITY HUMAN RIGHTS
COMMISSION
Lawrence W. Arness
Michigan City, Indiana
______________________________________________________________________________
In the FILED
Indiana Supreme Court
May 21 2009, 9:22 am
_________________________________ CLERK
of the supreme court,
court of appeals and
tax court
No. 46S05-0808-CV-444
FILTER SPECIALISTS, INC.,
Appellant (Petitioner below),
v.
DAWN BROOKS AND
CHARMAINE WEATHERS,
Appellees (Respondents below).
and
MICHIGAN CITY HUMAN RIGHTS
COMMSSION,
Appellee (Intervenor-below).
_________________________________
Appeal from the LaPorte Circuit Court, No. 46C01-0509-MI-290
The Honorable Thomas Alevizos, Judge
_________________________________
On Petition To Transfer from the Indiana Court of Appeals, No. 46A05-0704-CV-203
_________________________________
May 21, 2009
Rucker, Justice.
Case Summary
Dawn Brooks and Charmaine Weathers initiated these proceedings by filing a complaint
with the Michigan City Human Rights Commission alleging their employer, Filter Specialists,
Inc., discharged them on the basis of race, in violation of the Indiana Civil Rights Act. Both
Brooks and Weathers are African-American. Following a hearing at which evidence was
presented, a five-member Commission unanimously concluded that race was the motivating
factor behind the claimants‟ discharge, and awarded damages to Brooks and Weathers in the
form of backpay and fringe benefits. Upon judicial review, the trial court affirmed the
Commission‟s decision. We affirm in part and reverse in part the judgment of the trial court.
Background
Before delving into the specific facts of this case, we begin by summarizing some basic
principles in an area of law that at least one commentator observed “has befuddled most of those
who have attempted to master it.” Kenneth R. Davis, Price-Fixing: Refining the Price
Waterhouse Standard and Individual Disparate Treatment Law, 31 Fla. St. U. L. Rev 859, 859
(2004); see also Wright v. Southland Corp., 187 F.3d 1287, 1289 (11th Cir. 1999) (plurality
opinion) (commenting, “Employment discrimination law has become an area of great-and often
needless-complexity in the federal courts”).
Every employment decision involves discrimination. An employer, when deciding whom
to hire, whom to promote, or whom to fire, must discriminate among employees. Permissible
bases for discrimination in firing for example might include excessive absenteeism, horseplay,
fighting, or as alleged in this case and discussed in more detail below, clocking-in a fellow
employee. Under Indiana law impermissible bases for discrimination include “race, religion,
color, sex, disability, national origin, or ancestry.” Ind. Code § 22-9-1-3(l). Thus, in an
employment discrimination lawsuit, the critical inquiry usually is: On what basis did the
employer discriminate? Stated somewhat differently, the case is one of causation: What caused
the adverse employment action of which the plaintiff complains?
2
In construing Indiana civil rights law our courts have often looked to federal law for
guidance. See, e.g., State, Civil Rights Comm‟n v. County Line Park, Inc., 738 N.E.2d 1044,
1048 (Ind. 2000); Indiana Civil Rights Comm‟n v. Culver Educ. Found., 535 N.E.2d 112, 115-16
(Ind. 1989); Indiana Civil Rights Comm‟n v. City of Muncie, 459 N.E.2d 411, 418 (Ind. Ct. App.
1984). We do so again here.
There are presently two alternative ways of establishing liability in a federal Title VII
case.1 A plaintiff may pursue a “single-motive” theory of discrimination. Or a plaintiff may
pursue a “mixed-motive” theory of discrimination. Using the traditional single-motive theory, a
plaintiff proves an unlawful employment practice pursuant to the burden-shifting framework of
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), as explicated in Texas Dep‟t of Cmty.
Affairs v. Burdine, 450 U.S. 248 (1981). More precisely, with the goal of “progressively . . .
sharpen[ing] the inquiry into the elusive factual question of intentional discrimination,” id. at 255
n.8, the United States Supreme Court in McDonnell Douglas established an allocation of the
burden of production and an order for the presentation of proof in Title VII discriminatory
treatment cases. The plaintiff in such a case must first establish a “prima facie” case of racial
discrimination.2 Burdine, 450 U.S. at 252-53. Once the plaintiff has established a prima facie
1
Title VII of the Civil Rights Act of 1964 makes it illegal for an employer “to fail or refuse to hire or to
discharge” a person “because of . . . race, color, religion, sex, or national origin.” 42 U.S.C § 2000e-
2(a)(1). This is similar to the Indiana Civil Rights Act, which makes it illegal to exclude a person “from
equal opportunities because of race, religion, color, sex, disability, national origin, or ancestry.” I.C. §
22-9-1-3(l).
2
In McDonnell Douglas the plaintiff alleged that he was not hired because of his race. Under those
circumstances the Supreme Court declared the employee could establish a prima facie case of
employment discrimination by establishing “(i) that he belongs to a racial minority; (ii) that he applied
and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his
qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the
employer continued to seek applicants from persons of complainant‟s qualifications.” 411 U.S. at 802.
The required elements of a prima facie case may vary depending on the case. Swierkiewicz v. Sorema N.
A., 534 U.S. 506, 511-12 (2002). And even in cases alleging discrimination in firing, courts differ on the
precise elements of the plaintiff‟s prima facie case. See, e.g., Jones v. Reliant Energy-ARKLA, 336 F.3d
689, 691 (8th Cir. 2003) (for prima facie claim of disparate treatment based on race, a plaintiff must
prove: “1) she is within the protected class, 2) she was qualified to perform her job, 3) she suffered an
adverse employment action, and 4) non-members of her class, e.g., white employees, were treated
differently”); Logan v. Caterpillar, Inc., 246 F.3d 912, 919 (7th Cir. 2001) (in a case involving discharge
on basis of sex court declared that plaintiff must establish that “(1) he is a member of a protected class;
(2) he was meeting his employer‟s legitimate performance expectations; (3) he suffered an adverse
employment action; and (4) he was treated less favorably than similarly situated females”); Jackson v.
3
case, unlawful discrimination is presumed. The defendant-employer can rebut this presumption
by producing evidence that the adverse employment action was taken “for a legitimate,
nondiscriminatory reason.” Burdine, 450 U.S. at 254. Should the defendant-employer carry this
burden, the plaintiff must have an opportunity to prove by a preponderance of the evidence that
the legitimate reasons offered by the defendant-employer are but a pretext for discrimination.
McDonnell Douglas, 411 U.S. at 804. Although the McDonnell Douglas presumption shifts the
burden of production to the defendant-employer, “[t]he ultimate burden of persuading the trier of
fact that the defendant intentionally discriminated against the plaintiff remains at all times with
the plaintiff.” Burdine, 450 U.S. at 253.
In contrast, using the mixed-motive theory a plaintiff can establish an unlawful
employment practice by showing that impermissible discrimination played a “motivating part” or
was a “substantial factor” in the employment decision. Price Waterhouse v. Hopkins, 490 U.S.
228 (1989). Under this theory the plaintiff need not disprove the bona fides of the employer‟s
justifications but rather argues that race (or some other impermissible factor) was also a factor
motivating the adverse action. See 42 U.S.C. § 2000e-2(m). In a mixed motive case, rather than
simply articulating a legitimate, nondiscriminatory reason for the employment decision, the
defendant must show by a preponderance of the evidence that it would have made the same
decision regardless of the plaintiff‟s protected status. Price Waterhouse, 490 U.S. at 258.
This means of proving unlawful discrimination was brought into focus by the United
States Supreme Court in Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003), which referred to a
“mixed-motive” case as one in which “both legitimate and illegitimate reasons motivated the
decision.” Id. at 93. In Desert Palace, the Court noted that “[t]his case provides us with the first
opportunity to consider the effects of the 1991 Act [amending Title VII] on jury instructions in
mixed-motive cases.” Id. at 98. The amendment in question declared, “Except as otherwise
provided in this subchapter, an unlawful employment practice is established when the
complaining party demonstrates that race, color, religion, sex, or national origin was a
motivating factor for any employment practice, even though other factors also motivated the
E.J. Brach Corp., 176 F.3d 971, 982-83 (7th Cir. 1999) (declaring that to establish prima facie claim for
discharge based on race and age plaintiff must show: “(1) he was in a protected class; (2) he performed
his job well enough to meet his employer‟s legitimate expectations; (3) despite his performance, he was
discharged; and (4) [] his employer sought a replacement for him . . .”).
4
practice.” 42 U.S.C. § 2000e-2(m); see also Desert Palace, 539 U.S. at 94 (quoting statute). The
Court explained the issue presented by the amendment:
Since the passage of the 1991 Act, the Courts of Appeals have
divided over whether a plaintiff must prove by direct evidence that
an impermissible consideration was a “motivating factor” in an
adverse employment action. See 42 U.S.C. § 2000e-2(m). Relying
primarily on Justice O‟Connor‟s concurrence in Price Waterhouse
[v. Hopkins, 490 U.S. 228 (1989)], a number of courts have held
that direct evidence is required to establish liability under § 2000e-
2(m).
Desert Palace, 539 U.S. at 95. A unanimous Court held that “direct evidence” is not required in
order for a plaintiff to obtain a mixed-motive instruction under Title VII. Id. at 101-02. The
Court summarized its holding as follows:
In order to obtain an instruction under § 2000e-2(m), a plaintiff
need only present sufficient evidence for a reasonable jury to
conclude, by a preponderance of the evidence, that “race, color,
religion, sex, or national origin was a motivating factor for any
employment practice.” Because direct evidence of discrimination
is not required in mixed-motive cases, the Court of Appeals
correctly concluded that the District Court did not abuse its
discretion in giving a mixed-motive instruction to the jury.
Id. at 101-02. Although this holding purported to address only when a plaintiff is entitled to a
mixed-motive jury instruction, some courts have concluded that the holding has a much broader
impact. Specifically, some courts have read Desert Palace to apply to “single-motive” as well as
“mixed-motive” cases. See, e.g., Dare v. Wal-Mart Stores, Inc., 267 F. Supp. 2d 987, 990-92 (D.
Minn. 2003). Some have read it to spell the demise of the McDonnell Douglas burden-shifting
paradigm altogether. See, e.g., Griffith v. City of Des Moines, 387 F.3d 733, 745 (8th Cir. 2004)
(“The only rational conclusion is that no distinction between single motive and mixed motives
exists . . . McDonnell Douglas should not be used by courts to analyze Title VII claims.”)
(Magnuson, District J., concurring). And some have noted the uncertain ground on which
McDonnell Douglas now stands. Chadwick v. WellPoint, Inc., 561 F.3d 38, 45 n.8 (1st Cir.
2009) (noting, “The Desert Palace decision has proved ripe terrain for scholarly debate over how
that decision interacts with the McDonnell Douglas framework”).
5
Although we do not agree that Desert Palace completely overruled McDonnell Douglas,3
we agree with those courts that have concluded in light of Desert Palace, the traditional
McDonnell Douglas burden-shifting paradigm requires a slight modification, but only in its final
stage. See, e.g., Rachid v. Jack In The Box, Inc., 376 F.3d 305, 312 (5th Cir. 2004) (noting
courts need “only modify the final stage of the McDonnell Douglas scheme to accommodate
Desert Palace, by framing the final stage „in terms of whether the plaintiff can meet his or her
„ultimate burden‟ to prove intentional discrimination, rather than in terms of whether the plaintiff
can prove „pretext.‟”) (quoting Rishel v. Nationwide Mut. Ins. Co., 297 F. Supp. 2d 854, 865
(M.D.N.C. 2003)).
Under the traditional paradigm, as a practical matter, if the defendant‟s proffered
explanation for its conduct is true, then the result is victory for the defendant. On the other hand
if the defendant‟s proffered explanation is false, or in the words of McDonnell Douglas a
“pretext,” then the result is often victory for the plaintiff.4 Under a modified framework, to
prevail after the defendant produces a legitimate, nondiscriminatory reason for its conduct, the
plaintiff must prove by a preponderance of the evidence either (1) that the defendant‟s reason is
not true, but is instead a pretext for discrimination (single-motive alternative), see Reeves v.
Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142-43 (2000) (once employer offers its
nondiscriminatory reason “the McDonnell Douglas framework-with its presumptions and
burdens-disappeared, and the sole remaining issue was „discrimination vel non.‟”) (internal
quotation omitted), or (2) that the defendant‟s reason, while true, is only one of the reasons for its
conduct, and another “motivating factor” is the plaintiff‟s protected characteristic (mixed-motive
alternative). 42 U.S.C. § 2000e-2(m). This latter showing may be made with either “direct” or
“circumstantial” evidence. Desert Palace, 539 U.S. at 101-02. If the plaintiff prevails under the
second alternative, then the burden shifts to the defendant who may limit the remedies available
to the plaintiff to injunctive relief, attorney‟s fees, and costs-i.e., to escape liability for damages-
by proving it “would have taken the same action in the absence of the impermissible motivating
3
Indeed Desert Palace does not mention McDonnell Douglas and left open the question of “when, if ever,
[42 U.S.C. § 2000e-2(m)] applies outside of the mixed-motive context.” 539 U.S. at 94 n.1. And, the
Supreme Court applied the McDonnell Douglas framework in a post-Desert Palace case without
mentioning Desert Palace. See Raytheon Co. v. Hernandez, 540 U.S. 44 (2003).
4
But see St. Mary‟s Honor Center v. Hicks, 509 U.S. 502 (1993) (holding that the trier of fact‟s rejection
of an employer‟s asserted reason for its actions doesn‟t entitle a plaintiff to judgment as a matter of law).
6
factor.” 42 U.S.C. § 2000e-5(g)(2)(B). With these principles in mind, we now turn to the facts
of this case.
Facts
Dawn Brooks and Charmaine Weathers (referred to collectively as “Employees”) worked
at Filter Specialists, Inc., (“Company”) – a manufacturer and distributor of a variety of filtration
products. Brooks had worked for Company two years, and Weathers seven. On the morning of
March 5, 2003, the two women arrived at the factory at approximately 7:00 a.m., the time their
shift began. Weathers, who was driving, stopped her car near entrance no. 1 and dropped Brooks
off. Weathers then parked her car and entered the factory at entrance no. 2.
Diana Wirtz, Company‟s human resource manager, arrived around the same time and saw
Weathers exit her car and walk toward entrance no. 2. Wirtz testified she (Wirtz) entered the
facility through entrance no. 1 and waited for Weathers by the time clock, but Weathers never
showed up. At this point Wirtz became suspicious and checked the Company‟s time-clock
records. They indicated that Brooks and Weathers were clocked in on the same time clock at
7:01 a.m.
The Company has two time clocks, one of which is located near entrance no. 1, and the
other near entrance no. 2. Workers clock-in by entering their employee number followed by the
“enter” key. The clock-in time is shown in hours and minutes but not seconds; so, it is possible
for two employees‟ clock-in times to be recorded as the same minute, even though the clock-ins
did not occur simultaneously. Company‟s employee handbook treats clocking in for another
employee, or having one employee clock in for another, as a time card violation. The handbook
provides that such a violation “will carry the penalty of immediate suspension and/or discharge.”
Appellant‟s App. at 154 (emphasis in original).
Wirtz contacted Mike Forbes, Company‟s production manager, who supervised both
Employees. Wirtz informed Forbes that she had concluded Employees had committed time-
clock fraud that morning and recommended their termination. But Forbes considered Employees
as good workers and responded that he did not want to fire them. Unable to agree, Wirtz and
Forbes took the matter to Bernie Faulkner, Company‟s chief operating officer. After discussing
the matter, the three decided against termination provided the women sign a “last-chance
7
agreement” admitting a time-card violation. Appellant‟s App. at 148. Specifically, Brooks was
accused of clocking-in Weathers; and Weathers was accused of having Brooks do so. When
separately presented with the proposed agreement both women refused to sign and adamantly
denied violating Company‟s time-clock policy. Nevertheless, Forbes terminated them that day
even though neither had any history of fraud or misrepresentation, and neither would have been
subject to discharge for arriving at work late that day.
Thereafter, Employees filed a complaint with the Michigan City Human Rights
Commission alleging they were discharged because of race. The Commission held a hearing on
April 20, 2005. On August 18, 2005, a five-member Commission entered a unanimous decision
finding that Company had discriminated against the two women based on their race, and
awarded damages in the form of backpay and fringe benefits. Along with its decision, the
Commission entered the following relevant conclusions:
3. The Claimants in this case have met the burden of proof to
establish a prima facie case of racial discrimination. Both
claimants are African American women, who, according to the
supervisor, Mr. Forbes, were good employees that the company did
not want to lose. The testimony provided during the hearing in this
matter further demonstrates that other Caucasian employees of the
company who engage in far more egregious behavior than that the
Claimants were accused of received far less severe forms of
discipline by the company for their actions. In fact, Mr. Forbes
testified that he did in fact have the choice of either suspending or
terminated the Claimants in this matter, and he chose to terminate
them. Finally, the Claimants have proven that the company did in
fact take adverse employment action against them, to-wit:
termination of their employment . . . . As the company chose to
terminate the claimants for the alleged offense, this constitutes an
adverse employment action against them. As such, the Claimants
have met all burdens of proof necessary in order to establish a
prima facie case of racial discrimination.
4. In fact, as noted in Exhibits E and F to the hearing
transcript in this case, the Michigan City Human Rights
Department, following an investigation into the claimants
allegations of racial discrimination, did in fact find probable cause
existed to support the Claimants charges, noting in their findings
the lack of eyewitnesses to the alleged incident, the fact that the
time clock records reflected other employees punching in at the
8
same time on occasion and the lack of discipline for those
employees.
* * *
Conclusion
The testimony and evidence presented during the hearing clearly
support the claimants‟ position in this matter. The company has
failed to provide sufficient evidence to support their termination of
the claimants. The company itself admitted that they have no
witnesses who actually saw the alleged time clock incident, and
also admits that with two time clocks in the facility, it is possible
for more than one individual to have punched in at the same time,
either utilizing the same time clock or separate clocks. The
company further admits that neither of these employees had any
history of fraud or misrepresentation during their tenure with the
company, and in fact both adamantly denied this incident. In
addition, neither claimant was in danger of being terminated due to
point accumulation even had they both punched in late that day.
The company can offer no evidence or witnesses to support their
position in this matter, and have completely failed to provide any
legitimate, non-discriminatory reason for the Claimant‟s discharge.
In fact, other employees received much less discipline for far
greater offenses, including throwing tools at another employee and
even walking off the job. Yet, the company chose to terminate the
Claimants in this matter, for an alleged offense which no one
witnessed and that the evidence fails to support, and which the
Claimant‟s denied. It is clear from the evidence in this matter that
the stated reasons by the company for termination were pretextual
and it was in fact the Claimant‟s race which was the motivating
factor behind their discharge.
Appellant‟s App. at 11-13.
Company filed a Petition for Review in the LaPorte Circuit Court. And the Commission
filed a motion to be joined as a party-defendant, which the trial court granted. After conducting
several hearings the trial court determined that the Commission‟s findings of fact were supported
by the evidence and reasonable inferences therefrom. The trial court upheld the Commission‟s
determination except with respect to the amount of damages. After remand to the Commission
for supplemental findings, the trial court amended the damages award, but otherwise upheld the
Commission‟s decision. On review, a divided panel of the Court of Appeals reversed the
judgment of the trial court. See Filter Specialists, Inc. v. Brooks, 879 N.E.2d 558 (Ind. Ct. App.
9
2007). Having previously granted transfer we now affirm in part and reverse in part the
judgment of the trial court.
Standard of Review
Appellate courts stand in the same position as that of the trial court when reviewing a
decision of an administrative agency. Weatherbee v. Indiana Civil Rights Comm‟n, 665 N.E.2d
945, 947 (Ind. Ct. App. 1996). The Michigan City Human Rights Commission was created
pursuant to the authority granted in Ind. Code section 22-9-1-12.1. Among other things the
statute provides that a decision of the Commission may be appealed under the terms of Ind. Code
section 4-21.5 – the Administrative Orders and Procedures Act. In relevant part the Act
provides:
The court shall grant relief . . . only if it determines that a person
seeking judicial relief has been prejudiced by an agency action that
is:
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law;
(2) contrary to constitutional right, power, privilege, or immunity;
(3) in excess of statutory jurisdiction, authority, or limitations, or
short of statutory right;
(4) without observance of procedure required by law, or
(5) unsupported by substantial evidence.
Ind. Code § 4-21.5-5-14(d). In sum, the trial court‟s and this Court‟s review of the
Commission‟s decision “is limited to consideration of (1) whether there is substantial evidence to
support the agency‟s finding and order and (2) whether the action constitutes an abuse of
discretion, is arbitrary, capricious, or in excess of statutory authority.” Indiana Civil Rights
Comm‟n v. Alder, 714 N.E.2d 632, 636 (Ind. 1999) (quoting Indiana Dep‟t of Envtl. Mgmt. v.
Conard, 614 N.E.2d 916, 919 (Ind. 1993)). We give deference to the expertise of the agency and
will not reverse simply because we may have reached a different result than the Commission.
Alder, 714 N.E.2d at 635.
10
Discussion
Company raises five issues which we rephrase and reorder as: (1) should the
Commission‟s decision be set aside because the local ordinance creating the Commission was
not introduced into evidence; (2) was the Commission‟s decision concerning unlawful
discrimination supported by sufficient evidence; (3) was the Commission‟s decision awarding
backpay supported by sufficient evidence; (4) was Company subject to the Commission‟s
jurisdiction; and (5) did the trial court err in granting Commission‟s motion to be joined as a
party-defendant. We address issues (1) thru (3), and summarily affirm that portion of the Court
of Appeals‟ opinion disposing of issues (4) and (5).
The local ordinance
The Michigan City Human Rights Commission was created pursuant to the authority
granted by Ind. Code section 22-9-1-12.1. Among other things the statute provides, “Any city,
town, or county is hereby authorized to adopt an ordinance or ordinances, which may include
establishment or designation of an appropriate local commission, office, or agency to effectuate
within its territorial jurisdiction the public policy of the state as declared in [I.C. § 22-9-1-2]5
without conflict with any of the provisions of this chapter.” Company does not dispute that
Michigan City adopted such an ordinance. In fact Company‟s lawyer referred to the ordinance
just prior to the hearing in this case.6 However, Company argues that because Employees did not
introduce the ordinance into evidence, “the Employees failed to prove the terms of the Ordinance
Filter is accused of violating . . . .” Appellant‟s Br. at 12. According to Company, “[w]hen an
action against a company or individual is based on a city ordinance, it is incumbent upon the
party charging violation of the ordinance to prove the terms of the ordinance and that the accused
is subject to its terms.” Id.
5
Among other things the statute provides, “It is the public policy of the state to provide all of its citizens
equal opportunity for education, employment, access to public conveniences and accommodations, and
acquisition through purchase or rental of real property, including but not limited to housing, and to
eliminate segregation or separation based solely on race, religion, color, sex, disability, national origin or
ancestry, since such segregation is an impediment to equal opportunity.” I.C. § 22-9-1-2(a).
6
Before the hearing began a question arose as to whether a quorum required five or seven Commission
members. Company‟s lawyer commented, “[M]y reading of your ordinance indicates you only need five
commissioners for this hearing.” Appellant‟s App. at 102.
11
The flaw in Company‟s argument is that it is not the alleged violation of a city ordinance
that is at stake. Rather, it is the alleged violation of the Indiana Civil Rights Act. The ordinance
merely provides authority for a local unit of government to “effectuate within its territorial
jurisdiction” the civil rights laws of this state. Indeed by the express terms of the statute a local
ordinance may not “conflict with any of the provisions” of the Act. I.C. § 22-9-1-12.1. We
agree with the trial court‟s observation that “hearings before Human Rights Commissions are
controlled by applicable case law as it relates to proving racial discrimination claims in a court of
law. Human Rights Commissions have no authority to change or alter the standards to prove
racial discrimination or the burden of proof that has been established by state and federal case
law and statutes.” Appellant‟s App. at 17. In essence, the fact that the Michigan City Ordinance
was not introduced into evidence has no bearing on whether Company discharged Employees on
the basis of race in violation the Indiana Civil Rights Act.
Sufficiency of the evidence
Company contends that Employees did not carry their burden of proving a prima facie
case of unlawful discrimination. Specifically, pointing to the fourth element of the McDonnell
Douglas burden-shifting framework, Company argues Employees failed to prove that it “treated
similarly situated non-protected employees more favorably than they were treated.” Appellant‟s
Br. at 21.
As discussed earlier in this opinion, by establishing a prima facie case, the plaintiff
creates a rebuttable “presumption that the employer unlawfully discriminated against” her.
Burdine, 450 U.S. at 254; see McDonnell Douglas, 411 U.S. at 802. To rebut this presumption,
the defendant must clearly set forth, through the introduction of admissible evidence, a legitimate
nondiscriminatory reason for its actions. Burdine, 450 U.S. at 254. However, “[w]here the
defendant has done everything that would be required of him if the plaintiff had properly made
out a prima facie case, whether the plaintiff really did so is no longer relevant.” U.S. Postal
Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 715 (1983). “At this stage, the McDonnell-
Burdine presumption „drops from the case,‟ and „the factual inquiry proceeds to a new level of
specificity.‟” Id. (quoting Burdine, 450 U.S. at 255 & n.10). In turn, the “factual inquiry” is
“whether the defendant intentionally discriminated against the plaintiff . . . . In other words, is
12
the employer treating some people less favorably than others because of their race, color,
religion, sex, or national origin.” Id. (internal quotations and alteration omitted) (noting that
“[b]ecause this case was fully tried on the merits, it is surprising to find the parties and the Court
of Appeals still addressing the question whether [plaintiff] made out a prima facie case. We
think by framing the issue in these terms, they have unnecessarily evaded the ultimate question
of discrimination vel non.” Id. at 713-14); see also Kendrick v. Penske Transp. Servs., Inc., 220
F.3d 1220, 1226 (10th Cir. 2000) (declaring, “[T]he three-part McDonnell Douglas burden-
shifting analysis is limited to the summary judgment context. Once there has been „a full trial on
the merits, the sequential analytical model adopted from McDonnell Douglas . . . drops out and
we are left with the single overarching issue whether plaintiff adduced sufficient evidence to
warrant a jury‟s determination that adverse employment action was taken against‟ the plaintiff
because of his or her protected status”).
Because this case proceeded to a full hearing on the merits, the question of whether
Employees proved a prima facie case of unlawful discrimination is no longer relevant. Rather,
the question is whether Company discharged Employees on the basis of race.
Company insists that race had nothing to do with its discharge of Employees. Instead,
according to Company, Employees were discharged because they committed time-card fraud – a
violation of Company‟s rules. But Employees counter they committed no such violation,
implicitly arguing that Company‟s stated reason for discharge is unworthy of belief.
Employees‟ argument closely tracks the single-motive theory of unlawful employment
discrimination, namely: the defendant‟s proffered reason is not true, but is instead a pretext for
discrimination.7 Untruthfulness may be demonstrated through evidence showing: (1) that the
proffered reason had no basis in fact, (2) that the proffered reason did not actually motivate the
adverse employment action or (3) that the proffered reason was insufficient to motivate the
adverse employment action. Weihaupt v. Am. Med. Ass‟n, 874 F.2d 419, 428 (7th Cir. 1989);
7
The Commission not only made a specific finding of “pretext” but also, in the language of the mixed-
motive theory, found that race was a “motivating factor” in Company‟s decision to discharge Employees.
We conclude that because Employees carried the more difficult burden of proving pretext, they
necessarily proved that race was a motivating factor in the Company‟s discharge decision. In essence,
whether analyzed as a single-motive or mixed-motive case, Employees have carried their ultimate burden
of proving unlawful discrimination.
13
see also Lenoir v. Roll Coater, Inc., 13 F.3d 1130, 1333 (7th Cir. 1994) (An employee may
establish pretext by proving one of the following: “(1) Defendant‟s explanation . . . ha[s] no basis
in fact, or (2) the explanation was not the „real‟ reason, or (3) at least the reason stated was
insufficient to warrant the discharge.”).
There is no question that Company‟s proffered reason was sufficient to justify
terminating Employees. Company‟s employee handbook is clear on this point: time-clock fraud
“will carry the penalty of immediate suspension and/or discharge.” Appellant‟s App. at 154
(emphasis in original). And although no one testified to actually observing Employees engage in
any such fraud, there was at least some basis in fact, albeit conflicting, that fraud may have
occurred: the records showed they clocked-in on the same time clock at 7:01 a.m. under
circumstances suggesting it was unlikely they could have done so separately. But the heart of
the matter is whether the alleged time-clock fraud was the real reason actually motivating
Company to discharge Employees. Apparently the Commission did not think so: “It is clear
from the evidence in this matter that the stated reasons by the company for termination were
pretextual and it was in fact the Claimant‟s race which was the motivating factor behind their
discharge.” Appellant‟s App at 13. This is supported by Commission‟s observation of “the lack
of eyewitnesses to the alleged incident, the fact that the time clock records reflected other
employees punching in at the same time on occasion and the lack of discipline for those
employees,” id. at 12, and the Commission‟s apparent skepticism of Wirtz‟s account of the
incident and her investigation, id. at 10.
In addition, the Commission noted the disparity in the disciplinary action taken against
Brooks and Weathers, as compared to other employees who engaged in equally or even more
egregious conduct. When asked, “In fact, some individuals with some longstanding time with
the Company that we‟ve talked about were allowed to go one, two and three occurrences on
terminable offenses and, yet, others, such as [Employees], were discharged immediately; isn‟t
that right?” Forbes responded, “That is correct.” Id. at 129. Indeed the record supports Forbes‟
testimony. For example: J.M. was a felt line worker who received a written warning on which
Forbes “signed off” for making “discriminatory,” “racial remarks” to an African-American
employee. Id. at 125. In response to the question, “And you can‟t tolerate discriminatory or
harassing comments made by any employee to another, can you?” Forbes testified, “That is
14
correct.” Id. He acknowledged, however, that J.M. received no more than a written warning for
making racially inflammatory remarks to a fellow employee. Company employee J.S., a
production worker, received a verbal warning from Wirtz and Forbes for walking off the job, id.
at 165, and a written warning for a separate incident involving “substandard,” “very poor
quality” work, id. at 166. And for company employee R.H., rather than impose any sanction or
warning, Wirtz assigned him to another department after his “use of racial epithets” toward an
African-American employee.8 Id. at 128.
“[T]he question facing triers of fact in discrimination cases is both sensitive and difficult”
and “there will seldom be „eyewitness‟ testimony as to the employer‟s mental processes.”
Reeves, 530 U.S. at 141 (quoting Aikens, 460 U.S. at 716). Such is the case here. There is no
smoking gun. However “[p]roof that the defendant‟s explanation is unworthy of credence [i.e.,
pretextual] is simply one form of circumstantial evidence that is probative of intentional
discrimination, and it may be quite persuasive.” Reeves, 530 U.S. at 147. In the end this is a call
to be made by the fact finder – here the Commission. As with the trial court, this Court‟s review
of the Commission‟s decision “is limited to consideration of (1) whether there is substantial
evidence to support the agency‟s finding and order and (2) whether the action constitutes an
abuse of discretion, is arbitrary, capricious, or in excess of statutory authority.” Alder, 714
N.E.2d at 636 (Ind. 1999). We give deference to the expertise of the agency and will not reverse
simply because we may have reached a different result than the Commission. Id. Because we
agree there was substantial evidence to support the Commission‟s conclusion that Employees
suffered unlawful employment discrimination, we conclude the trial court correctly affirmed the
Commission‟s decision. On this point we affirm the judgment of the trial court.
8
Company‟s employee handbook provides, “Conduct of the nature described in this section may carry a
penalty of immediate suspension and/or discharge. The examples set forth in this section are not intended
to be all-inclusive. They are to be representative of the type of behavior that will warrant immediate
suspension with the intent to terminate employment, (pending investigation) . . . E. Leaving the job
without permission . . . M. Vulgar and abusive language towards a supervisor or other employee.”
Appellant‟s App. at 203, 204 (emphasis added).
15
Award of damages
Company complains that the Commission‟s award of backpay as adjusted by the trial
court is contrary to law, unsupported by substantial evidence and is arbitrary and capricious.
Appellant‟s Br. at 39. The facts are these. At the hearing before the Commission Weathers‟
testimony and related exhibits revealed that for the relevant time period Weathers would have
earned $12,090.00 in wages from Company. During the same time period she earned $6,954.00
from subsequent employment. Appellant‟s App. at 81. The Commission acknowledged “a
difference of $5,136.00 between the two jobs.” Id. at 12. However in awarding damages in
Weathers‟ favor, the Commission declared that she “is entitled to damages in the form of lost
wages and fringe benefits in the amount of $12,090.00.” Id. at 13. As for Brooks, her testimony
along with exhibits introduced into evidence at the hearing revealed that for the relevant time
period she would have earned $39,312.00 in wages from Company. During the same time
period, Brooks earned $17,154.31 from subsequent employment. For damages the Commission
awarded Brooks the difference of $22,157.69. The Commission entered the following relevant
findings:
As evidenced by Plaintiff‟s Exhibit G, Ms. Weathers‟ suffered a
loss of income after her termination from Filter Specialists from
the period of time of January through July 31, 2004. At the time of
her termination, Ms. Weathers was making $9.75 per hour and
working approximately 40 hours per week. She grossed $6,954.00
while employed at Walgreens for seven months, leaving a
difference of $5,136.00 between the two jobs. This comes to
$12,090.00 that Ms. Weathers would have grossed during said
period, or approximately $733.00 per month from January through
July. (Plaintiff‟s Exhibit G).
Ms. Brooks also incurred a loss of income as a result of her
termination from employment. As evidenced by Plaintiff‟s Exhibit
N to the trial transcript. As a result of her termination, Ms. Brooks
sustained an income loss of $22,157.69. (Plaintiff‟s Exhibit N).
Appellant‟s App. at 12.
On review Company complained about the award of damages. In response, the trial court
entered the following order:
16
[T]his matter is remanded to the Michigan City Human Rights
Commission to make appropriate findings of facts and conclusions
as it relates to the damages suffered by each of the Respondents
herein. Those findings should detail how those damages are arrived
at by the Michigan City Human Rights Commission and should
further take into consideration any unemployment compensation
benefits that may have been received by each of the Respondents.
Appellant‟s App. at 18 (emphasis added). For reasons not apparent from the record before us,
the Commission did not make any additional findings concerning its damages award. Instead,
Counsel acting on behalf of Commission and Counsel acting on behalf of Employees filed a
“Joint Request for Entry of Judgment.” Appellant‟s App. at 69. The Request declared, among
other things “[t]hat calculations of lost wages and benefits for both Charmaine Weathers and
Dawn Brooks was correct in every respect . . . however said award failed to subtract or deduct
amounts received by each Respondent for unemployment compensation.” Id. Relying on
exhibits introduced by Company demonstrating Brooks and Weathers received $4,687.90 and
$6,477.00 respectively in unemployment benefits, Commission and Employees sought reduction
of Brooks‟ award of $22,157.69 to $17, 469.79 and Weathers‟ award of $12,090.00 to $5,613.00.
The trial court entered judgment accordingly.9
Company argues that as a matter of arithmetic Weathers is entitled to no backpay at all.
This argument is based on the premise that as initial matter, Weathers was only entitled to
$5,136.00 – the difference between the wages she would have received from Company and the
wages she actually received from subsequent employment – and from that amount $6,477.00
Weathers received in unemployment benefits must be deducted. As for Brooks, Company
challenges conflicting evidence concerning overtime pay and pay Brooks received for maternity
leave. Based on its own calculations, Company contends Brooks is entitled to $5,965.29 in lost
wages.
9
Company contends “[i]t was appropriate to reduce the back pay award by the amount of unemployment
compensation received by each Employee, but it was improper for the attorneys representing the
Employees and the Commission to usurp the Commission‟s responsibility to make supplemental findings
of fact and conclusions as directed by [the trial court].” Appellant‟s Br. at 42 n.4. Although Company
raises this issue as error, it makes no further argument in this regard; nor does it seek any particular relief.
Except as otherwise discussed infra, we decline to address this issue further.
17
We first observe that a majority of federal circuit courts that have considered the matter
has determined that unemployment benefits should not be deducted from backpay awards in
discrimination cases. Gaworski v. ITT Commercial Fin. Corp., 17 F.3d 1104, 1113-14 (8th Cir.
1994) (citing cases). However, circuits are split over whether deducting unemployment benefits
should be left to the discretion of the trial court. Id. Although recognizing contrary authority on
the question of discretion, the Court of Appeals has adopted the majority view for cases arising
under the Indiana Civil Rights Act. Indiana Civil Rights Comm‟n v. Weingart, Inc., 588 N.E.2d
1288, 1291 (Ind. Ct. App. 1992) (finding trial court error “in reducing the back pay award by the
amount of unemployment compensation”). Acknowledging concerns that failure to deduct such
compensation may lead to double recovery, the court noted that a claimant must repay the state
for unemployment compensation received for the period that the award covers. Id. We believe
the majority rule is the more sound position and thus agree with the Court of Appeals on this
point.
In this case the Commission did not deduct from Employees backpay the amount
Employees received in unemployment compensation benefits. This was correct. In contrast the
trial court erred by ordering this cause remanded to the Commission with instructions to “take
into consideration any unemployment benefits that may have been received by each of the
Respondents,” Appellant‟s App. at 18, and then entering judgment reflecting deductions in
unemployment benefits. In sum the damages awarded to Employees should not have been
affected by their receipt of unemployment compensation.
Although neither party specifically addresses the issue in its briefs, we examine the
appropriate measure of damages in this case. Where a party has suffered unlawful
discrimination, a local Human Rights Commission may “order payment of actual damages,
except that damages to be paid as a result of discriminatory practices relating to employment
shall be limited to lost wages, salaries, commissions, or fringe benefits.” I.C. § 22-9-1-
12.1(c)(8). For our purposes “lost wages” are synonymous with “backpay.” 10 Backpay awards
10
For victims of job discrimination arising under Title VII, lost wages may include “backpay” as well as
what is commonly referred to as “front pay.” Front pay awards are made in lieu of reinstatement, Pollard
v. E.I. du Pont de Nemours & Co., 532 U.S. 843, 853 (2001), and are based on reasonably anticipated
future lost wages caused by unlawful discrimination. Shirley v. Chrysler First, Inc., 970 F.2d 39, 44 (5th
Cir. 1992); see also Kucia v. Se. Ark. Cmty. Action Corp., 284 F.3d 944, 948 (8th Cir. 2002) (“Front pay
18
in discrimination cases serve two functions: they make victimized employees whole for the
injuries suffered as a result of the past discrimination, and they deter future discrimination.
Albemarle Paper Co. v. Moody, 422 U.S. 405, 421 (1975).
Damages in the form of backpay are calculated from the date of discharge to the date of
the decision. Daniel v. Loveridge, 32 F.3d 1472, 1477 (10th Cir. 1994). The amount of damages
is determined by measuring the “difference between plaintiff‟s actual earnings for the period and
those which [s]he would have earned absent the discrimination of defendants.” Waters v. Wis.
Steel Works of Int‟l Harvester Co., 502 F.2d 1309, 1321 (7th Cir. 1974); see also 42 U.S.C. §
2000e-5(g) (providing that backpay is reduced by “[i]nterim earnings or amounts earnable with
reasonable diligence by the person or persons discriminated against”).
In this case the record supports the Commission‟s findings that Brooks is entitled to
backpay of $22,157.69. Calculated from the date of discharge on March 5, 2003, to the date of
the hearing on April 20, 2005, this amount represents the difference between what Brooks would
have earned absent Company‟s unlawful discrimination and the amount of her actual earnings
from subsequent employment. Company‟s argument to the contrary is merely a request that we
reweigh the evidence, which we decline to do.
On the other hand, the record does not support the Commission‟s findings that Weathers
is entitled to backpay of $12,090.00. Nor, for reasons we have discussed, does it support the trial
court‟s judgment awarding damages in the amount of $5,613.00. Rather the record shows that
the difference between Weathers‟ actual earnings and those she would have earned absent
Company‟s unlawful discrimination totals $5,136.00.11
is an equitable remedy „given in situations where reinstatement is impracticable or impossible.‟”) (internal
citation omitted); EEOC v. W&O, Inc., 213 F.3d 600, 619 (11th Cir. 2000) (“We hold that front pay
retains its equitable nature under Title VII after passage of the Civil Rights Act of 1991”). The Indiana
Civil Rights Act and Title VII differ in this regard. That is to say, equitable relief in the form of
reinstatement is not an available remedy; and in consequence neither is front pay.
11
Rather than calculating damages from the date of discharge to the date of the hearing, Weathers
introduced exhibits and provided testimony supporting an award of lost wages from January 2004 through
July 2004. Appellant‟s App. at 155. A plaintiff in a discrimination case has the burden of establishing
“what he or she contends to be the damages resulting from the discriminatory acts of the employer.”
Nord v. U.S. Steel Corp., 758 F.2d 1462, 1470 (11th Cir. 1985). The full transcript of the proceeding in
front of the Commission is not before us. As a consequence we have inadequate information to fully
19
Conclusion
We conclude there was substantial evidence to support the Commission‟s findings that
Employees were discharged from employment because of race, and that Commission‟s findings
in this regard were not an abuse of discretion, arbitrary, capricious, or in excess of statutory
authority. We therefore affirm the judgment of the trial court on this issue.
As for the award of damages, there was also substantial evidence to support the
Commission‟s findings that Brooks was entitled to an award of backpay in the amount of
$22,157.69. By reducing the award to $17,469.79 the trial court erred. And although there was
no evidence to support the Commission‟s findings that Weathers was entitled to an award of
backpay in the amount of $12,090.00, the trial court also erred by reducing the award to
$5,613.00. We therefore reverse the trial court on this issue and remand with instructions to
enter awards of damages for Employees consistent with this opinion.
The judgment of the trial court is affirmed in part and reversed in part. This cause is
remanded for further proceedings.
Dickson, Sullivan and Boehm, JJ., concur.
Shepard, C.J., not participating.
evaluate the underlying rationale for Weathers‟ damage claim. However, we note that throughout the
proceedings Weathers and Brooks were represented by the same attorney. We thus presume that
Weathers‟ decision concerning her claim of damages was the result of a deliberate and conscious
decision.
20