STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CARMEN M. LUGO, )

)

Petitioner, )

)

vs. ) CASE NO. 93-3698

)

BOOKER & COMPANY, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, final hearing in the above-styled case was held in Tampa, Florida, on December 1, 1993, before Robert E. Meale, Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

The parties were represented at the hearing as follows: For Petitioner: Craig P. Clendinen

Stearns Weaver

One Tampa City Center, Suite 3300 Tampa, Florida 33601

For Respondent: Michael D. Malfitano

Macfarlane Ferguson

111 East Madison Street, Suite 2300 Tampa, Florida 33601

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent is guilty of sex discrimination in employment.

PRELIMINARY STATEMENT

By Charge of Discrimination filed April 16, 1992, Petitioner alleged that she was laid off on April 15, 1992, due to her national origin, Hispanic/Puerto Rican. On February 12, 1993, the Florida Commission on Human Relations entered a Determination: Cause. On May 10, 1993, the Florida Commission on Human Relations entered a Redetermination: Cause.

On June 23, 1993, Petitioner filed a Petition for Relief alleging disparate treatment of Petitioner by Respondent based on her national origin, Hispanic.

Respondent filed an answer to the petition on July 1, 1993, denying all material allegations except that it is an employer within the meaning of the statute and that Petitioner was laid off, but not due to her national origin.

At the hearing, Petitioner called four witnesses and offered into evidence five exhibits. Respondent called three witnesses and offered into evidence 16 exhibits. All exhibits were admitted. Without objection, Respondent's Exhibits 7-9 were sealed because they are the financial statements of Respondent, which consented to findings of facts based on the financial statements, but only if expressed as percentage changes rather than absolute numbers.

The transcript was filed January 3, 1992. Each party filed a proposed recommended order, and rulings on the proposed findings are in the appendix.

FINDINGS OF FACT

1. Petitioner was born in Puerto Rico and lived there 11 years. She speaks English fluently with a Spanish accent.

   
   

2. Respondent is a wholesale distributor of building materials. Four- fifths of its customers are retail outlets, and the remainder are building contractors. Respondent is the largest such distributor in the Southeast and is a mid- to large- size corporation. Respondent is an employer within the meaning of Chapter 760.

   
   

3. Answering a want ad in the newspaper, Petitioner sent David Russell, who is Respondent's controller, a resume and letter of recommendation. She had two interviews with Mr. Russell and was hired. It is unclear whether Petitioner's Puerto Rican background came up during the interview. Evidently unknown to Petitioner at the time, each of four other interviewees was offered the job and refused it before it was offered to Petitioner.

   
   

4. Petitioner began work with Respondent on May 21, 1989, as an invoicing clerk. Her responsibilities included invoicing, copying, mailing, filing, and microfilming.

   
   

5. Petitioner began work at an hourly rate of $5.50, which was raised after the completion of a 90-day probationary period to $6.00. After one year, she received a raise to $6.50 per hour, which remained her hourly rate through her date of termination.

   
   

6. The raise resulted from the favorable recommendation of Mr. Russell to the president of Respondent. Mr. Russell earlier gave Petitioner preferential treatment when he recommended to the president that Respondent lend her over

   $1000 for surgery. Normal company policies did not authorize such loans to new employees, which Petitioner was at the time. The loan was made and later repaid.

   
   

7. An important part of Petitioner's duties was to learn how to operate a Burroughs L-9000, which is a dedicated, automated ledger machine. The L-9000 dates back to the early days of office automation. Invoices are run through the L-9000, which performs simple mathematical functions to extend total costs based on number of units and price per unit, total costs per invoice, and total invoiced costs per day and per month.

   
   

8. Inputting data into the L-9000 is a time-consuming process. Corrections take even more time, as each incorrect entry has to be deleted and the correct entry added. The machine has other problems, such as the loss of data during power outages.

9. When Petitioner joined Respondent, she knew nothing about the L-9000. At the time, Shirley Rehrig, who had been employed by Respondent since October, 1985, was operating the machine. Ms. Rehrig had joined the company as an invoice operator on the L-9000 and was, by May, 1989, supervisor of the Invoicing Department.

   
   

10. The Invoicing Department works closely with the Pricing Department, which are both part of the Accounting Department. At the time, employees in the Pricing Department manually took prices for invoiced items from books and entered them in handwriting on invoices. The process was prone to error through mistranscriptions of quantity, price, or cost.

    
    

11. Pricing errors were only one source of invoicing errors. Additional errors could arise in invoicing, such as by misreading the handwritten information provided by the Pricing Department or misentering the data.

    
    

12. In May, 1989, there were two persons working in the Pricing Department and, counting Petitioner, two persons working in the Invoicing Department.

    
    

13. Speed and accuracy were important characteristics for the L-9000 operator. Petitioner's early experience with the machine was frustrating for her, Ms. Rehrig, and Mr. Russell, who was in charge of the Accounting Department. Despite repeated demands from Ms. Rehrig and Mr. Russell that she work more slowly, Petitioner continually tried to operate the machine as fast as Ms. Rehrig could operate it. The result was that Petitioner's error rate was unacceptably high and thus her processing of invoices was relatively slow.

    
    

14. Ms. Rehrig became very upset with Petitioner and several times complained about her to Mr. Russell. Perhaps recalling the difficulty he had had filling the position, Mr. Russell tried to calm Ms. Rehrig and continually counselled Petitioner to work more slowly.

    
    

15. Mr. Russell is a mild-mannered man, who showed great patience with his employees. He tolerated a longtime employee in the Pricing Department who, partly due to poor health, was often volatile and one time threw invoices at Ms. Rehrig.

    
    

16. Petitioner gradually began to gain competence with the L-9000. However, she was unable to erase completely the perception of her coworkers, but not Mr. Russell, that she was the source of more invoicing errors than for which she was in fact responsible.

    
    

17. Petitioner's high error rate gave her one advantage, though. She knew how to correct errors, which were inevitable in the invoicing process, especially given the peculiarities of the L-9000.

    
    

18. In July, 1990, Respondent hired Alice Sweet to work in the Invoicing Department. Petitioner trained Ms. Sweet in the use of the L-9000, and soon Petitioner and Ms. Sweet were alternating on the machine. Ms. Sweet was a very good worker who was able to concentrate on her work better than Petitioner could. However, she was more timid than Petitioner in trying to fix the mistakes that she did make and often required the assistance of Petitioner or Ms. Rehrig in making the corrections.

19. When Ms. Sweet was hired, Ms. Rehrig was given a chance to learn pricing, while still supervising invoicing. The division between the Invoicing and Pricing Departments, which are really subdepartments, is not as clear as the line between Accounting and other true departments.

    
    

20. When Ms. Rehrig told Mr. Russell in the summer of 1991 that she would be quitting, he asked her if Petitioner or Ms. Sweet should take Ms. Rehrig's position in pricing. Ms. Rehrig recommended Ms. Sweet because she was more focused and methodical than Petitioner, but also because Petitioner could handle the L-9000 on her own and Ms. Sweet could not.

    
    

21. Mr. Russell made the changes that Ms. Rehrig had recommended after she left the company in November, 1991. Ms. Rehrig was not contacted subsequently about problems with the L-9000 as long as Petitioner remained with the company.

    
    

22. In October, 1991, Felicia Jones, who is an African- American, was hired by Respondent through Kelly Temporary Services. Ms. Jones was assigned to the Invoicing Department where she reviewed invoices and Petitioner's output from the L-9000.

    
    

23. After Ms. Rehrig's departure, Petitioner alone operated the L-9000. Although improved from her early days on the machine, Petitioner continued to make errors on the L-9000, and Mr. Russell continued to ask that she improve her performance on the machine.

    
    

24. During this time, Respondent was undergoing difficult financial times. The depression in the construction industry sharply impacted Respondent's business. Total sales were down about 1 percent between fiscal years-end June 30, 1989, and June 30, 1990. Sales plummeted 14.4 percent between fiscal years- end 1990 and 1991, and slid 4.4 percent between fiscal years-end 1991 and 1992. Although still showing earnings, profits between fiscal years-end 1990 and 1991 were almost halved, and profits between fiscal years-end 1991 and 1992 slipped another 18 percent.

    
    

25. By sometime in the first half of 1989, Respondent had been adopted cost-containment strategies to deal with poor market conditions. Examples of Respondent's efforts included controlling the purchasing of supplies, requiring bids on goods and services, and using inventory-control mechanisms. These strategies proved ineffective in the face of seriously deteriorating market conditions in 1991.

    
    

26. Finally, Respondent turned to reductions in force. When voluntary attrition proved insufficient, Respondent implemented layoffs. Layoffs throughout the company in each of its offices throughout the state reduced employment from 131 persons to 94 persons from January, 1989, to December, 1992. The impact in the Accounting Department was a reduction in the average workforce of 12 persons from January, 1989, through January, 1992, to 10 persons in January, 1992, and 8 persons in December, 1992.

    
    

27. After Ms. Rehrig's departure, the president of Respondent instructed Mr. Russell to identify an employee to layoff should the president decide to make layoffs. The most likely candidates were Petitioner and Ms. Sweet. Petitioner decided that he would lay off Petitioner because Ms. Sweet was trained in invoicing and pricing and could run the L-9000, even though she was less able to correct errors than could Petitioner.

28. Mr. Russell decided not to lay off Ms. Jones, who remained employed with Respondent through Kelly Temporary Services. Even though Respondent paid Kelly Temporary Services $7.50 per hour for Ms. Jones, Respondent owed no benefits for her. Estimating that benefits cost $1.91 per hour, Mr. Russell figured that Petitioner, who was then receiving $6.50 per hour, was costing Respondent a total of about $8.41 per hour--almost one dollar more per hour than Ms. Jones cost.

    
    

29. The Pricing and Invoicing Departments could withstand a reduction in force. After Ms. Rehrig's departure, there had been times that Petitioner had nothing to do in invoicing. When Petitioner was terminated in April, 1992, Ms. Sweet returned to operate the L-9000 for one year. During that time, she worked exclusively in the Invoicing Department, but only about four of five days a week were required for work on the L-9000. Ms. Sweet's former duties in pricing were covered by another employee.

    
    

30. Sometime in the second quarter of 1992, Mr. Russell discussed with Ms. Jones the possibility of her permanent employment with Respondent, rather than through Kelly Temporary Services. Because Petitioner had already filed her Charge of Discrimination, Mr. Russell decided not to pursue fulltime permanent employment with Ms. Jones until the discrimination charges were resolved.

    
    

31. Following Petitioner's departure in April, 1992, Ms. Sweet encountered problems with the L-9000 that she could not solve. She and Mr. Russell several times contacted Ms. Rehrig, and at least once Ms. Rehrig came to the office after finishing her other work for the day to fix the problem. Mr. Russell offered her a consultation contract, which Ms. Rehrig declined. Mr. Russell and Ms. Rehrig discussed the possibility of her returning to work with Respondent, but they could not agree on acceptable conditions.

    
    

32. Ms. Rehrig testified that, on one occasion immediately after interviewing Petitioner, Mr. Russell referred to her as a "Puerto Rican" and alluded to the excitability of Puerto Ricans. This testimony is not credited. Ms. Rehrig was displeased with Respondent for undisclosed reasons when she quit, and she became more displeased when, after being badgered by Ms. Sweet and Mr. Russell concerning the L-9000, she and Mr. Russell could not agree on adequate conditions for her reemployment with Respondent. Called as a witness by Petitioner, Ms. Rehrig initially omitted mention of her early dissatisfaction with Petitioner's work, although she admitted that she had recommended to Mr. Russell that he assign Ms. Sweet, rather than Petitioner, to the Pricing Department after Ms. Rehrig quit.

    
    

33. The only other evidence concerning Petitioner's national origin involves Petitioner's testimony that Ms. Sweet angrily called her a "Puerto Rican" one time, that coworkers routinely assumed that Petitioner had made all errors in invoicing even when she had not, and that Mr. Russell treated her in a diffident manner.

    
    

34. There are problems with each of these items of proof. First, Petitioner admitted that Mr. Russell did not know that Ms. Sweet had referred to Petitioner's national origin in a derogatory way. Petitioner never told Mr. Russell about this remark, nor is she aware that anyone else did.

35. Second, the coworkers who wrongly assumed that Petitioner was responsible for invoicing errors when she was not were understandably basing their assumption on Petitioner's history of a high number of mistakes, not on her national origin. More importantly, Mr. Russell did not misperceive Petitioner's error rate.

    
    

36. Third, Mr. Russell was not especially close with a number of employees, including but not limited to Petitioner. But he resisted Ms. Rehrig's requests to fire Petitioner, showed patience with her high error rate, and gave her one raise.

    
    

37. Petitioner has proved a prima facie case of discrimination. She is Puerto Rican. She was generally qualified for the invoicing job. And she was replaced by Ms. Sweet, who is a white person whose national origin evidently does not place her in a protected class.

    
    

38. However, Respondent has shown a legitimate business reason for Petitioner's layoff. Business was poor and getting worse. Petitioner's competence was marginal. Ms. Sweet, whom Ms. Rehrig herself had named over Petitioner for what appears to have been a promotion, was cross-trained and thus, for that reason alone, more useful to Respondent. And Respondent's president justifiably believed that the Invoicing and Pricing Departments could continue to operate effectively with one less employee.

    
    

39. The quick offer of fulltime permanent employment to the less experienced Ms. Jones did not mean that she was intended to replace Petitioner. Following Petitioner's termination, Ms. Sweet worked for one year on the L-9000 before Ms. Jones, who was not even trained on the machine until August, 1992, replaced her in April, 1993. Respondent in effect gave Ms. Jones a raise when she began to operate the L-9000 by increasing the pay to Kelly Temporary Services to $8.55 per hour. However, competence in 1992 with the L-9000 was of increasingly limited utility to Respondent, which, by the time of the final hearing, had replaced the obsolete device with modern automated office equipment.

    
    

    CONCLUSIONS OF LAW

    
    

40. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes.)

    
    

41. Section 760.10(1)(a) provides that it is an unlawful employment practice "[t]o discharge or to fail or refuse to hire any individual, or otherwise to discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment, because of such individual's . .

    . sex . . . or marital status."

    
    

42. Under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), Petitioner must establish by a preponderance of the evidence a prima facie case of sex discrimination. Petitioner did so. She is Hispanic. She was discharged and replaced by another employee whose national origin is not evidently included among the protected classes.

    
    

43. Under McDonnell Douglas, Respondent must provide an explanation or else suffer the consequence of a prima facie case. Here, Respondent rebutted the prima facie case by proving that the layoff was motivated by economics, not discrimination based on national heritage.

44. Petitioner has failed to prove that the reason proffered by Respondent for her layoff was pretextual or, in any event, as required by St. Mary's Honor Center v. Hicks, U.S. , 113 S. Ct. 2742 (1993), that Respondent intentionally discriminated against her on the basis of national origin.

    
    

45. The gravamen of Petitioner's claim is discrimination based on national origin because she was laid off due to the fact that she is Puerto Rican. There is simply no evidence of discrimination based on national origin, nor is there any reasonable basis, given Respondent's economic performance and Petitioner's marginal work performance, for inferring such discrimination in her layoff.

    
    

46. The only evidence concerning Petitioner's national origin was a crude comment from a coworker. The coworker was not a manager, nor was the comment even relayed to someone in management. The comment does not establish a case of discrimination as alleged. Nor does the comment meet the requirements of Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986), concerning a hostile work environment, which was not alleged in any event.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief.

ENTERED on January 13, 1994, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings on January 13, 1994

APPENDIX

Rulings on Petitioner's Proposed Findings 1-4: adopted or adopted in substance.

5: rejected as unsupported by the appropriate weight of the evidence.

Petitioner failed to prove that the matter of her national origin arose during the interview.

6 and 8: rejected as unsupported by the appropriate weight of the evidence.

7: adopted or adopted in substance.

9-10: adopted or adopted in substance.

11: adopted or adopted in substance except that Petitioner continued to make a high rate of mistakes on the L-9000.

12: adopted or adopted in substance, although the reasons for Ms. Rehrig's recommendations go beyond those stated in the proposed finding.

13: rejected as subordinate.

14-17 (first sentence): rejected as unsupported by the appropriate weight of the evidence.

1. (remainder): adopted or adopted in substance.

2. (first two sentences): adopted or adopted in substance.

18 (remainder)-20: rejected as subordinate, irrelevant, and unsupported by the appropriate weight of the evidence.

21-22: rejected as unsupported by the appropriate weight of the evidence except for positions of Respondent.

23-25: rejected as unsupported by the appropriate weight of the evidence. Subsequent events led Mr. Russell to reassess his needs and the costs of meeting these needs. However, in April 1992, he did not have the advantage of this knowledge and made in good faith the personnel decisions that he made at the time.

26: adopted or adopted in substance, but see 23-25.

27: rejected as unsupported by the appropriate weight of the evidence. 28: adopted or adopted in substance.

29: rejected as unnecessary.

30: rejected as unsupported by the appropriate weight of the evidence. Rulings on Respondent's Proposed Findings

1-16: adopted or adopted in substance.

17: rejected as subordinate and recitation of evidence except that Ms.

Rehrig unhappily left her job with Booker.

18-19: adopted or adopted in substance.

COPIES FURNISHED:

Sharon Moultry, Clerk Human Relations Commission

325 John Knox Road Building F, Suite 240 Tallahassee, FL 32303-4149

Dana Baird, General Counsel Human Relations Commission

325 John Knox Road Building F, Suite 240 Tallahassee, FL 32303-4149

Craig P. Clendinen Stearns Weaver

One Tampa City Center Suite 3300

Tampa, FL 33601

Michael D. Malfitano Macfarlane Ferguson

111 E. Madison St.

Suite 2300

Tampa, FL 33601

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 93-003698

Orders for Case No: 93-003698