vs. ) Case No. 86-0025
BAKER INDUSTRIES, INC. )
Respondent. )
Pursuant to Notice the Division of Administrative Hearings by its duly designated Hearing Officer, K. N. Ayers, held an Administrative Hearing in the above styled cause on April 18, 1986, and May 5, 1986, at Tampa, Florida.
For Petitioner: Robert A. Miles, Esquire
For Respondent: John M. Elias, Esquire and
Charles M. Phillips, Esquire
By Petition for Relief from an Unlawful Employment Practice, Floyd A. Smith, Complainant, alleges he was unlawfully discriminated against in employment by Baker Industries, Inc., Respondent, by reason of a physical handicap. As grounds, therefor it is alleged that Smith was discharged by reason of a physical handicap (cancer). Complainant here seeks reinstatement with back pay; reimbursement of all past and future medical benefits, future medical insurance equal to that provided Baker's employees on January 6, 1985, including coverage for cancer related claims; damages for loss of his prior quality of life; damages for injury to his credit reputation (or alternatively payment of the lien on complainant's home taken to secure payment made from Hillsborough County indigent fund for complainant's cancer surgery, and all delinquent medical bills plus letters of apology by Respondent accepting full responsibility for the delinquent debts); and payment for all costs of this action and reasonable attorney's fee. Interest on all of these payment claims is also requested.
At the beginning of the hearing complainant moved for summary judgment (affirmative remedial relief) on grounds Respondent had failed to file an answer to the complainant's Petition for Relief as required by Rule 22T-9.08 F.A.C. Ruling on that motion was reserved and is contained in the Conclusions of Law herein. Thereafter complainant called eight witnesses, including complainant, Respondent called one witness and 52 exhibits were marked for identification.
Objection to exhibit 19 was sustained, complainant withdrew exhibits 27-29, and did not offer exhibit 31 into evidence. All other exhibits were admitted into evidence.
Proposed findings have been submitted by the parties. Treatment accorded those proposed findings is contained in Appendix A attached hereto and made a part hereof.
The Respondent, Baker Industries, Inc., is a Florida corporation duly licensed and incorporated under laws of the State of Florida. Baker Industries is an employer as defined in Chapter 760 Florida Statutes.
At all times material to complainant's employment with Respondent, Baker Industries, Inc., had in full force and effect the Employee Benefit Plan providing for health benefits to employees of Baker Industries, Inc., and the Greenwood Conversion Trust which provided eligible terminating employees with the privilege of obtaining conversion insurance by electing to pay the entire premium.
Pursuant to the Trust Agreement for Baker Industries, Inc. and Baker Enterprises, Inc. M .K. Lashua was the Trustee of the Health and Welfare Plan and Chase Southeast Corporation was the Administrator of said Plan and Baker Industries, Inc. and Baker Enterprises, Inc. were the Plan Supervisor.
Floyd A. Smith, Complainant, began employment with Baker Industries, Inc. on August 22, 1983 in the Home Improvement Division. In late 1983 Baker Industries, Inc. concluded the Home Improvement Division was not meeting the profitability standards desired and determined to close down this division. Salesman were told to solicit no more orders and the foreman was told the Division would be closed down the end of the first week in January, 1984. Bill Post and Complainant were the only two employees in the Home Improvement Division. Post was told to advise Complainant that Friday, January 6, 1984, would be his last day of employment with Baker Industries, Inc. This Post did. Baker Industries paid its employees weekly with the pay period ending on Wednesday and the employee receiving his check on Friday. Phil Stephenson initially intended to terminate Smith's employment on Wednesday, January 4, 1984, but at Post's request continued Smith's employment until Friday, January 6, 1984.
On Friday, January 6, 1984 while loading siding to return to the supplier Complainant strained himself. He proceeded to a hospital where the doctor determined he had suffered a hernia that would require surgical repair.
On Monday, January 9, 1984, Smith went to Baker Industries to return the pick-up truck he had been issued in connection with his employment and to fill out worker's compensation forms to cover his inability to work due to the work related injury (hernia). Smith fully understood that as of Friday, January, 6, 1984, his employment with Baker Industries had been terminated due to the closing down of the Home Improvement Division.
Smith was considered to be a good worker and was well liked by other employees as well as management at Baker Industries. Baker Industries employs
40 to 45 people. Frank Baker is founder, President and principal owner of Baker Industries. At the time of the injury to Smith, M. K. Lashua was vice president in charge of finance and administration and Phillip R. Stephenson was vice
president in charge of operations. As Stephenson described their function in military terms, Lashua was staff while Stephenson was line. The decision to shut down the Home Improvement Division had been an operational decision by Baker and Stephenson based on financial information provided by Lashua.
Partially to improve employee relations Lashua had suggested that employees being terminated be given a termination interview. Complying with this suggestion Stephenson had Smith come into his office on January 9, 1984, for such an interview. During this discussion Stephenson told Smith that when he recovered from his hernia he might return to see if they (Baker Industries) could use him as an installer in the Screen Room Division. Stephenson even took Smith down to introduce him to Ron Wooten, foreman of the Screen Room Division, and tell Wooten that Smith may seek employment in the Screen Room Division when he recovers from his injury. Smith interpreted that as a promise of a job when he recovered from his hernia. Before leaving Baker Industries that day Smith told several Baker Industry employees that he was being transferred to the Screen Room Division when he recovered from his injury.
The necessary paper work terminating Smith from his employment January 6, 1984, was prepared (Exhibit 52). January 6, 1984, is the last day Smith was in the employ of Baker Industries.
Some confusion existed in the mind of Lashua regarding the status of Smith as a result of the work related injury he received January 6, 1984. Lashua wasn't sure, because of the work related injury, whether Smith was still considered an employee of Baker Industries while on Worker's Compensation.
Subsequently, he learned from the company attorney that Smith was not considered an employee while on Worker's Compensation because of the hernia suffered on the last day of his employment.
Smith underwent a hernia operation on January 25, 1984. In connection with this surgery traces of blood were detected in his urine and he was sent to a urologist for further evaluation. On February 14, 1984, Smith was advised by Dr. Crowell of the possibility he had cancer of the bladder. Desiring a second opinion Smith arranged for admittance at Shands Hospital, Gainesville, Florida, for a confirming diagnosis. He was admitted to Shands on March 1, 1984. On his admission information form Smith listed his employer as Baker Industries.
Baker Industries receives each month a billing statement from Chase Southeast Corporation regarding the premiums due for the health plan. That billing statement contains a listing of Baker Industry employees covered by the plan, is prepared by Chase around the 20th of the month, and the premiums are paid by Baker Industries on the first of each month. Baker Industries advises Chase of new employees and deletes terminated employees from the plan by underlining their names with dates of termination. It is not unusual for Baker Industries to delete a name as long as two or three months after the employee has left the employ of Baker Industries. As a result Smith's name appeared on the January, February, and March billing statements prepared by Chase. Baker Industries remitted premiums based on Smith being an employee for the months of January and February if not also for the month of March. Since an adjustment in the premium is made effective on the date the employee leaves the employment of Baker Industries there is no monetary incentive for Baker Industries to promptly notify Chase when employees are terminated.
Smith went to Shands Hospital March 1, 1984, and listed Baker Industries as his employer. The hospital contacted the administrator of Baker Industries health plan, Chase Southeast, and was told Smith's name appeared on the latest list of Baker Industry employees.
The first bill received from Shands by Chase was a bill from pathology for $17. Since this was below the minimum to be paid by the employee, Andi Walker-Ames, who handled the Baker Industries Health Plan, returned the bill to Shands with Explanation of Benefits (EOB) form stating that payment was not made because it was applied to Smith's deductible. When subsequent bills for Smith's hospitalization at Shands were received by Chase, Andi Walker-Ames telephoned Phyllis Rodino, who handled the personnel paper work at Baker Industries, to confirm that Smith was still employed. Rodino told Walker-Ames that Smith had been terminated from employment January 6, 1984, and was no longer covered by the health plan. Walker-Ames sent EOB forms to Shands denying the claim for payment on grounds Smith was not covered.
On or about March 20, 1984, Smith went to Baker Industries and told Phyllis Rodino that he had cancer and required bladder surgery. Ms. Rodino told him that he was not covered under the company health plan and had not been covered since January 6, 1984. This came as a terrible shock to Smith.
The Employee Benefits Plan (Exhibit 2) provides that persons eligible for coverage under the plan shall include only full-time employees who are employed by the company on a permanent full-time basis for at least 30 hours per week and are actively at work on the Plan effective date. After January 6, 1984, Smith no longer met either of those conditions. Even accepting Complainant's version of his January 9, 1984, meeting with Stephenson that he was promised a job when he recovered from his hernia (which the evidence does not support) Smith would still fail to meet the qualifications for coverage under the health plan. Even according to Smith's understanding of the conversation between him and Stephenson he was promised a job in the future and was not employed by Baker Industries while on worker's compensation or during his subsequent cancer treatment.
Complainant contends that he was terminated in employment around March 20, 1984 when officials at Baker Industries discovered he required surgery for bladder cancer. A considerable amount of circumstantial evidence to support this position was introduced including testimony of fellow workers who "understood" claimant was to return to work as an installer in the screen room division when he recovered from his hernia; the fact that his name was not removed from the list of employees covered by the Health Plan until March 1984; to comments (memos) that his cancer treatment could cost the Health Plan
$25,000; to a conference called by Frank Baker in March with Lashua, Stephenson, and Rodino to clear up the status of Smith; to the fact that Baker Industries officials learned of Smith's illness about this time; to the fact that Smith was not advised of his option to remain in the Health Plan under the Greenwood Conversion Trust by paying the premiums; and to statements made to Smith that his worker's compensation absence would not interrupt his one year's continuous employment needed to qualify for Baker Industries employee profit sharing plan.
With respect to Baker Industries potential liability for medical bills related to Smith's cancer, if covered, the plan provided the supplemental insurance carrier would pay all expenses over the first $2500, thereby limiting the out-of-pocket expenses to the Health Plan of $2500 for Smith's illness.
The Greenwood Conversion Trust provided that terminated employees shall have thirty (30) days in which to submit an application for benefits under the Conversion Trust. Officials at Baker Industries were not aware that this option was not contained in the booklet given to all employees explaining the Health Plan until this case arose. Complainant was not aware of the Conversion Trust and was not advised of his right to submit an application. The Greenwood Conversion Trust contains an exclusion for pre-existing conditions. Of those few terminated employees who were aware of the conversion option when terminated, to date none have opted for the coverage.
Many of Smith's fellow employees, including Phyllis Rodino, heard that Smith was to be transferred to the Screen Room Division from Smith himself after his exit interview with Stephenson on January 9, 1984.
Following the removal of his bladder Smith has been employed in jobs requiring him to perform manual labor. He is now able to care and provide for himself and perform carpentry work as before his surgery. His principal inconvenience that surgery has caused is he cannot wear a tool belt because of his colostomy.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and subject matter of, these proceedings.
Ruling on Petitioners ore tenus motion presented regarding failure of Respondent to file an answer to the Petition for Relief was reserved at the hearing and is now denied. Rule 22T-9.08(4) FAC specifically requires the Respondent to file an answer to the Petition for Relief and further provides that failure to do so shall be deemed to constitute an admission of the material facts alleged in the Petition. Respondent acknowledges that it did not file an answer but contends the prior pleadings filed in this cause adequately denied all allegations and was sufficient to define the contested issues. A review of the file discloses that in its REQUEST FOR REDETERMINATION Respondent answered all of the allegations previously made by Complainant as well as the allegations of discrimination contained in the Petition for Relief. Paragraph 4 of the Petition for Relief lists Complainant's alleged disputed issues of material fact to which no response is indicated. The facts alleged in Paragraph 5 are specifically covered in Respondent's request for redetermination and Complainant was clearly noticed of all contested issues. To admit as facts allegations that had been disputed at all phases of these proceedings before the case was transferred to the Division of Administrative Hearings for a fact finding determination clearly conflicts with the Division of Administrative Hearings procedural rules and the dictates of common sense.
Section 760.10 Florida Statutes (1983) provides in pertinent part:
It is an unlawful employment practice for an employer:
To discharge...any individual, or otherwise to discriminate against any individual with respect to compensation,
terms, conditions, or privileges of employment, because of such individuals...handicap...
At the time Complainant alleges he was discriminated against by being terminated in March 1984, retroactive to January 6, 1984, he had active cancer cells in his bladder which clearly handicapped him from performing work. Accordingly, for the purpose of these proceedings, it is assumed that Complainant was handicapped and it would be an unlawful employment practice to terminate his employment because of this handicap.
The flaw in Complainant's position is that he was terminated on January 6, 1984, in accordance with the business decision to close the Home Improvement Division. All of the paperwork necessary to accomplish his termination was completed in due course immediately after January 6, 1984. Compassionate complications arose when Smith suffered a hernia on his last day of employment. As a result of this complication, when Stephenson talked to Smith in his exit interview on January 9, 1986, Stephenson probably did intend to offer Smith employment in the Screen Room Division after he recovered from his hernia. It is clear that before Smith's injury there never was any intimation that he would be transferred to the Screen Room Division or to another job at Baker Industries rather than simply be terminated. Smith clearly understood that January 6, 1984 was to be his last working day at Baker Industries, as did his supervisor and others at Baker Industries who were aware of the closing of the Home Improvement Division. It is only on January 9, 1984, that Smith was told he may be able to come back to work at Baker Industries after his hernia was repaired. No evidence was presented regarding the number of employees in the Screen Room Division, the turn over rate in that division, or any other evidence to show that a vacancy would exist or would likely exist when Smith was able to return to work. Baker Industries did, from time to time, advertise jobs were open for experienced Screen Room installers. Smith does not contend he fits into that category.
In a discrimination case the Petitioner has the initial burden of establishing a prima facie case of discrimination. If the Petitioner succeeds in proving the prima facie case, the burden shifts to the Respondent to articulate some legitimate reason for the Petitioner's rejection. Should Respondent carry this burden, Petitioner must then have the opportunity to prove, by a preponderance of the evidence, that the legitimate reasons offered by the Respondent were not its true reasons, but were a pretext for discrimination. Texas Department of Community Affairs v. Burdine, 450 US 248, 253, 101 S Ct. 1089, 1093, 67 L Ed. 2d 207 (1981).
To establish the prima facie case, Petitioner must present facts which "raise an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors." Id. at 450 US 254. The prima facie case serves to eliminate the most common non-discriminatory reason for the plaintiff's rejection. See Teamsters v. United States, 431 US 324, 358, and n.44, 97 S Ct. 1843, 1866, 52 L Ed. 2d 396 (1977).
Complainant does not contend he was terminated on January 6, 1984 for impermissible reasons and no evidence to establish any impermissible reason for termination on that date was presented. The sole basis for the discrimination charge here alleged is that Smith was actually rehired on January 9, 1984 by Stephenson to work in the Screen Room Division and that, before he entered into this employment, Baker Industries learned of his disability (cancer) and reneged on the rehiring. The discrepancy in that position is that subsequent to January 6, 1984, Complainant was never employed by Baker Industries. Smith does not contend that he was not hired because of his handicap, only that he was fired because of this handicap. Absent evidence that Smith was rehired subsequent to
January 6, 1984 he cannot be "fired" retroactive to January 6, 1984. Assuming, for the purpose of this position, evidence in the light most favorable to Complainant viz. that he was promised a job when he recovered from his hernia, this would indicate possible discrimination in not being hired, not in being terminated. Claimant does not allege such discrimination.
Considering all facts surrounding the events that occurred on January 9, 1984 it is concluded that Smith was told by Stephenson that when Smith recovered from his hernia his application for a job in the Screen Room Division would be given favorable consideration.
From the foregoing it is concluded that Floyd A. Smith has failed to show that he was terminated from his employment at Baker Industries on January 6, 1984 by reason of his handicap or that he was rehired on January 9, 1984 to work in the Screen Room Division at Baker Industries and subsequently fired therefrom because of his handicap or for any other reason. It is
RECOMMENDED that a final order be issued finding that Floyd A. Smith has failed to present a prima facie case of discrimination in employment by reason of handicap when he was terminated from his job at Baker Industries on January 6, 1984, or that he was ever employed by Baker Industries subsequent to January 6, 1984, and thereafter unlawfully terminated.
Entered this 29th day of May, 1986 in Tallahassee, Florida.
K. N. AYERS Hearing Officer
FILED with the Clerk of the Division of Administrative Hearings this 29th day of May, 1986.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-0025
Treatment accorded proposed Findings of Fact of Complainant.
Treatment accorded proposed Findings of Fact of Respondent.
Robert A. Miles, Esquire
Charles F. Decker, Esquire 6740 Crosswinds Drive, North St. Petersburg, Florida 33710
