CITY OF SIMI VALLEY v. FAIR EMPLOYMENT AND HOUSING COMMISSION OF THE STATE OF CALIFORNIA (1985)

The Fair Employment and Housing Commission (Commission) appeals from a judgment granting a Peremptory writ of administrative mandamus directing the Commission to set aside its decision. It is a matter arising under the California Fair Employment and Housing Act (Act) (Gov. Code Sec. 12900 et seq.)¹ and involves alleged employment discrimination based on marital status by the City of Simi Valley (City) against James Goehring (Goehring). (Sec. 12940.) The primary issues are (1) whether the City's employment policy, which precludes the City from hiring a person into a department where the spouse is already employed, conforms with the business reason exception to the general prohibition against marital status discrimination and, if not, (2) whether the City established an affirmative defense either to the charge of discrimination or to certain remedies.

We find the City's policy does not conform to the requirements of the business reason exception because it contained no provision for case-by-case consideration of couples' particular work, i.e. job responsibilities and social setting as opposed to performance. Therefore, its application constituted unlawful marital status discrimination. However, since the Commission applied incorrect legal standards in analyzing various aspects of the case, including determination of the appropriate remedies, we reverse and remand with directions.

PROCEDURAL HISTORY

Goehring applied for a mechanic position in the maintenance division of the Public Works Department of the City. Pursuant to its policy forbidding employment of relatives in the same department,² the City refused to consider Goehring's application because his wife worked as a clerk in the maintenance division.

Goehring filed a complaint with the Department of Fair Employment and Housing (DFEH). (Gov. Code, Sec. 12960.) The DFEH issued an accusation against the City charging it with unlawful discrimination based on marital status. (Secs. 12940; 12965.) A hearing was held before the Commission on the accusation. (Sec. 12967.) The DEFEH presented the case against the City (Sec. 12969.)

The Commission determined that the City had discriminated against Goehring based on marital status. The City was ordered (1) to conform its policy and practices concerning the hiring of spouses to the requirements of section 129490 and the implementing Administrative Code regulations. (2) to offer Goehring employment as a mechanic or a comparable position and accord him “. all seniority, rank, and status and other terms and conditions of employment which he would have enjoyed on that date had he been employed in that position from August 11, 1980 (the date the City filed the position) to the time of his actual hiring .” (3) to compensate Goehring for backpay in the amount of $25,845.50 plus interest until December 31, 1982,³ and (4) to pay Goehring for lost benefits in an amount to be determined until December 31, 1982.

The City petitioned for a writ of administrative mandamus. (Civ.Proc. Code, Sec. 1094.5.) A peremptory writ of mandate issued directing the Commission to set aside its decision.

DISCUSSION

The California Fair Employment and Housing Act makes certain discriminatory practices unlawful. Section 12940, subdivision (a), generally makes refusing to hire or employ a person because of marital status an unlawful employment practice. However, that section also preserves “. right of an employer to reasonably regulate, for reasons of supervision, safety, security, or morale, the working of spouses in the same department, division, or facility, consistent with the rules and regulations adopted by the commission .” (Sec. 12940, subd. (a)(3).)

Section 7292.2 of the implementing regulations⁴ provides that marital status discrimination may be established by showing, inter alia, that an applicant has been denied an employment benefit by reason of the employment of the applicant's spouse. Section 7492.5 of the regulations further prohibits employment decisions from being based on whether an individual has a spouse presently employed by the employer, except as follows: “. (1) For business reason of supervision, safety, security or morale, an employer may refuse to place one spouse under the direct supervision of the other spouse. (para) (2) For reasons of supervision, security or morale, an employer may refuse to place both spouses in the same department, division or facility if the work involves potential conflicts of interest or other hazards greater for married couples than for other persons4)4B”B”4B”

We reject the City's contention that the Legislature did not intend marital status discrimination to encompass a refusal to hire a spouse of an existing employee. Section 12940, subdivision (3), establishes an exception to the general prohibition against marital status discrimination which permits employers to reasonably regulate for specified reasons “. the working of spouses in the same department.” This exclusionary language indicates that regulation of “the working of spouses in the same department” for impermissible reasons is prohibited marital status discrimination. Moreover, the Legislature expressly charged the Commission with the duty to interpret section 12940. (Sec. 12935.) The Commission's interpretation of “marital status” discrimination, of which the Legislature is presumably aware, has not been modified by the Legislature, although it recently amended section 12940 in other respects. This indicates that the Commission's construction is consistent with legislative intent. (See El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 739.) Administrative construction is entitled to great weight and will be followed absent a showing that it is erroneous. (See Select Base Materials v. Board of Equal (1959) 51 Cal.2d 640, 647; Judson Steel Corp. v. Workers' Comp. Appeals Bd. (1978) 22 Cal.3d 658, 668.)

The DFEH has the initial burden of establishing a prima facie case of unlawful discrimination in a hearing before the Commission. (See Sec. 12969; County of Alameda v. Fair Employment & Housing Com. (1984) 153 Cal. App.3d 499, 504, 39 FEP Cases 859;cf. Texas Dept. of Community Affairs v. Burdine (1981) 450 U.S. 248, 252-254, 25 FEP Cases 113.⁵ Thereupon, the burden of presenting evidence to refute the prima facie case shifts to the employer. In a case of discriminatory treatment, it may introduce rebuttal evidence that it had some legitimate, non-discriminatory reason for its action. (Cf. County of Alameda v. Fair Employment & Housing Com., supra, at p. 504; Texas Dept. of Community Affairs v. Burdine, supra, at pp. 252-254.)

If the employer carries its burden of introducing some evidence, the DFEH is entitled to an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered were not the employer's true reasons, but were a pretext for discrimination. (Cf. County of Alameda v. Fair Employment & Housing Com., supra at p. 504; Texas Dept. of Community Affairs v. Burdine, supra at pp. 252-253.) The ultimate burden of proving discrimination remains at all times with the DFEH, (Cf. Texas Dept. of Community Affairs v. Burdine, supra, at p. 253.) If an employer is silent in the face of a persuasive prima facie case of discrimination, the Commission must find that an employer unlawfully discriminated.

Where unlawful discrimination is proven, the Commission is required to grant a cease and desist order and other relief to effectuate the purposes of Act. (Sec. 12970.) A primary purpose of the Act is to “. provide effective remedies which will eliminate such discriminatory practices.” (Sec. 12920.)

The Commission has “broad statutory authority to fashion remedies which are consistent with the purposes of the Act .” (Cal. Admin. Code, tit. 2, Sec. 7286.9; cf. Franks v. Bowman Transportation Co. (1976) 424 U.S. 747, 763-764, 12 FEP Cases 549.) Retroactive and prospective remedies, including awards of back pay, injunctive and other equitable relief, seniority, and reinstatement, are ordinarily granted to “make whole” a victim of discrimination. (Cal. Admin. Code, tit. 2, Sec. 7286.9; see Sec. 12970; cf. Franks v. Bowman Transportation Co., supra.) The goal is to restore a victim as nearly as possible to the position or status the victim would have enjoyed but for the unlawful discrimination. (See Cal. Admin. Code, tit. 2, Sec. 7286.9p cf. Albemarle Paper Co. v. Moody (1975) 422 U.S. 405, 421, 10 FEP Cases 1181.

Once discrimination in the employment process is proven, in effect a rebuttable presumption arises that make-whole relief to a victim is appropriate. (Cf. Albemarle Paper Co. v. Moody, supra, 422 U.S. 405, 421, 10 FEP Cases 1181; Lewis v. Smith (1984) 731 F.2d 1535, 1538, 34 FEP Cases 1313; Evid. Code, Sec. 600.) A victim of unlawful discrimination need only show the amount of back pay and other economic loss. (Cf. e.g. Edwards v. School Bd. of City of Norton, Va. (4th Cir. 1981) 658 F.2d 951, 956-957; 26 FEP Cases 1147; Di Salvo v. Chamber of Commerce Etc. (8th Cir. 1978) 568 F.2d 593, 598, 20 FEP Cases 825; Sprogis v. United Air Lines, Inc. (7th Cir. 1975) 517 F.2d 387, 392, 10 FEP Cases 1249.

The burden of proof then shifts to the employer. The employer must prove facts reducing or mitigating the claimed loss. (Cf. e.g., Nord v. United States Steel Corp. (11th Cir. 1985) 758 F.2d 1462, 1470-1471, 37 FEP Cases 1232; Brady v. Thurston Motor Lines, Inc. (4th Cir. 1985) 753 F.2d 1269, 1274, 36 FEP Cases 1805; Marks v. Prattco, Inc. (5th Cir. 1981) 633 F.2d 1122, 1125, 28 FEP Cases 44; Sias v. City Demonstration Agency (9th Cir. 1978) 588 F.2d 692, 696, 18 FEP Cases 981; DiSalvo v. Chamber of Commerce, Etc. (8th Cir. 1978) 568 F.2d 593, 598, 20 FEP Cases 825; Sprogis v. United Air Lines, Inc. (7th Cir. 1975) 517 F.2d 387, 392, 10 FEP Cases 1249.)

To avoid imposition of make-whole remedies, the employer has the burden of proving, by clear and convincing evidence, that the result would have been no different even absent the proven unlawful discrimination, e.g. an applicant would not have been hired even in the absence of discrimination. (Cf. e.g. King v. Trans World Airlines, Inc., (8th Cir. 1984) 738 F.2d 255, 257-258, 35 FEP Cases 102; Patterson v. Greenwood School Dist. 50 (4th Cir. 1982) 696 F.2d 293, 295, 30 FEP Cases 825; Nanty v. Barrows Company (9th Cir. 1981) 660 F.2d 1327, 1333, 27 FEP Cases 410; Day v. Mathews (D.C. Cir. 1976) 538 F.2d 1083, 1085-1086, 12 FEP Cases 1131; but cf. Lewis v. Smith (11th Cir. 1984) 731 F.2d 1535, 1538-1539, 34 FEP Cases 1313 and Smallwood v. United Air Lines, Inc. (4th Cir. 1984) 728 F.2d 614, 616, fn. 5, 34 FEP Cases 217 (only proof by a preponderance required); but cf. Dillon v. Coles (3d Cir. 1984.) 746 F.2d 998, 1004-1005, 36 FEP Cases 159 (only burden of presenting evidence shifts).) Allocating a higher burden of proof to the employer respecting this affirmative defense is appropriate since (1) proven discrimination occurred in the employment process, (2) the employer possesses the information regarding its employment, criteria, specific job requirements, and other candidates' qualifications (cf. Day v. Mathews, supra, 530 F.2d at p. 1086, fn. 5; Evid. Code, Secs. 115, 500 and Law Revision Commission Comment thereto), and (3) the Act's purposes and policies of achieving equal employment opportunity, eliminating discriminatory practices, and making whole victims of past discrimination (Sec. 12920) are more fully effectuated under this procedure (Sec. 12970, Cal. Admin. Code, tit. 2, Sec. 7286-3; cf. also Evid. Code, Secs. 605, 606).

Our review of the record indicates that the legal analysis went awry at the administrative level in several respects. First, the Commission, as well as the parties, incorrectly treated the defense raised by the City, that the particular work would have involved potential conflict of interest and other hazards greater for married couples, as a defense on the merits. Second, the Commission misinterpreted section 7292.5, subdivision (a)(2), of the Commission's regulations in regard to the meaning of “potential conflicts of interest and other hazards greater for married couples than for other persons.”

The Commission read the above language as requiring “hard, credible evidence” that employment of spouses in the same department would create a real danger or likelihood that the particular individuals would engage in misconduct injurious to the employer. This construction is not correct.

While ordinarily an administrative agency's interpretation of its own regulations is accorded great weight, the legal question whether an administrative agency applied the proper legal standard in evaluating evidence rests with the court. (Carmona v. Division of Industrial Safety (1975) 13 Cal.3d 303, 310.) An agency's interpretation of its own regulations will not control if plainly erroneous or inconsistent with the regulations. (Sands, Sutherland Statutory Construction (4th ed. 1985 rev.) vol. 1A, Sec. 31.06, p. 532.)

The same rules of statutory construction applicable to interpretation of statutes generally govern interpretation of administrative regulations. (Cal. Drive-in Restaurant Assn. v. Clark (1943) 22 Cal.2d 287, 292; California State Restaurant Assn. v. Whitlow (1976) 58 Cal.App.3d 340, 344.) The starting point for statutory construction is the language itself. Absent a clearly expressed intent to the contrary, the usual import of unambiguous language is ordinarily conclusive. (Consumer Product Safety Comm'n. v. GTE Sylvania (1980) 447 U.S. 102, 108; Guelfi v. Marin County Employees' Retirement Assn. (1983) 145 Cal.App.3d 297, 302-303.)

Looking to the plain meaning of the words, it is clear that no actual or probable conflict of interest must be shown. “Potential” is defined as “(c)apable of being but not yet in existence; latent.” (American Heritage Dict. (2d College ed. 1982) p. 970.) This standard necessarily involves some hypothesizing.

“Conflict of interest” means: “A conflict between the private interests and public obligations of a person in an official position.” (American Heritage Dict. (2d College ed. 1982) p. 309.) The administrative law judge misinterpreted the law when he focused on the character of the individuals and their propensity to act against the employer if faced with a conflict of interest. The question posed by the express language of the regulations is whether the work, meaning job responsibilities and social setting, might generate potential conflicts of interest of other hazards greater for married couples. “Married couples” denotes married couples in general, not the particular duo.

The provisions regarding marital status discrimination are unique to discrimination law in that they permit class-based discrimination on specified grounds and allow certain generalizations about individuals. Undoubtedly, the allowance of limited class-based marital status discrimination is premised upon the special nature of the marital relationship. Husband and wife assume mutual obligations of support upon entering a marriage. (Civ. Code. Secs. 242, 5100.) Property acquired by a couple during marriage is generally community property, in which each spouse has a present, existing, and equal interest. (Civ. Code, Secs. 687, 5105, 5110.) Spouses are also bound by mutual obligations of respect and fidelity (Civ. Code, Sec. 5100.)

Given the recognized emotional and economic bond of marriage, it is an accepted generalization that married couples working in close association may create distinct problems for an employer. In Yuhas v. Libbey-Owens-Ford Co. (1977) 562 F.2d 496, 499, 16 FEP Cases 891, a Title VII case finding an employer's no-spouse rule did not constitute sex-discrimination,⁶ the court suggested several reasons underlying the assumption that “it is generally a bad idea to have both partners in a marriage working together.” First, a spouse's work performance may suffer because he or she may not be able to put aside intense emotions generated by the marital relationship because the couple works together. Second, spouses may side with each other when employment grievances arise. Third, the marital relationship may interfere with work performance or give an appearance of favoritism if spouses are in supervisor-subordinate positions. (Id.)

Although the Act and administrative regulations are to be liberally construed to further the policy and purpose of eliminating discriminatory practices (Gov. Code, Secs. 12993, 12920; Cal. Admin. Code, Sec. 7285.1), nothing in either the Act or regulations suggests that an employer must produce character evidence to prove that particular spouses would be apt to act against the employer's interests if employed together in the same department and confronted with a conflict of interest. Neither does the Act or regulations make evidence of strict supervision, which conceivably might deter or make it difficult to get away with employee breaches should a conflict of interest arise, relevant. However, the particular work of the spouses must clearly be considered.

The City asserts that section 7292.5, subdivision (a)(2), of the regulations is unconstitutionally vague as manifest by the Commission's unexpected interpretation of the operative terms. This contention is without merit since any “ambiguity” of constitutional magnitude vanishes when the plain meaning of the language is followed. Moreover, a statute is not held void for uncertainty where, as here, reasonable and practical construction can be given to its language. (Lackner v. St. Joseph Convalescent Hospital Inc. (1980) 106 Cal.App.3d 542, 551.)

In this instance, a prima facie case of discrimination, subject to rebuttal, would have been established once Goehring presented evidence that he had applied for the mechanic position and the City rejected him because it already employed his wife. However, here the City stipulated at the outset: “Respondent (City) refused to consider complainant (Goehring) for an opening in the position of mechanic in its Public Works Department because complainant's wife Candi Geohring was employed as a Clerk II, in that department.” Uncontroverted evidence showed that the City simply invoked its blanket policy and made no individualized assessment of the work situation. Consequently, a conclusive case of marital status discrimination was made out.

Any evidence that the particular work that Goehring and his wife would have performed would have involved potential conflicts of interest and hazards greater for married couples was not relevant on the merits because there was no showing that it related to the City's actual basis for rejecting Goehring. (Cf. Joshi v. Florida State University Health Center (1985) 763 F.2d 1227, 1235, 36 FEP Cases 38.

Once discrimination was conclusively proven, the only remaining issue was the appropriate remedies to be afforded. As previously stated, the object of any affirmative relief was to restore Goehring to the position and status he would have enjoyed absent the unlawful discrimination. It is in this analysis that any evidence regarding potential conflicts of interest and hazards greater for married couples became relevant.

The evidence that Goehring's wife would be privy to confidential information concerning Goehring and his peers was a fact from which a potential conflict of interest could be inferred since it may be assumed, based upon the nature of the marital relationship, that a wife might be inclined to share such information with her mate or tamper with records under certain circumstances. Another possible conflict of interest could be inferred, for the same reasons, from the evidence that Mrs. Goehring's duties at the time of her husband's application included on occasion the typing of timesheets and performance evaluations.

Furthermore, although the Commission gave short shrift to the City's concerns regarding morale, it was shown that the mechanics' garage and the clerks' office were in close proximity and those employees regularly interacted. Morale is a legitimate business reason under the regulations and marriage dissolution is a hazard peculiar to married couples. Any employee who has lived through an antagonistic marriage dissolution of co-workers can attest to its disruptive effect in the workplace. An employer is entitled to protect itself against morale problems which might develop if divorcing spouses worked in close association in the same department, division or facility.

In addition, potential supervision problems might have arisen if Goehring had been hired into the same department as his wife. Since spouses may be presumed to have special interest in each other's welfare, it is possible that one partner's on-the-job difficulties might have adversely affected the other's relationshp with a mutual superior for whom both would have performed work. It is also possible that problems relating to temporary supervision would be created since the evidence showed that the mutual superior ordinarily selected an acting supervisor from among the mechanics. If Goehring was selected, his wife would be placed in a position of performing work for her husband, a situation involving potential conflicts of interest as well as the possibility or appearance of favoritism. On the other hand, the superior might feel compelled to choose another mechanic simply to avoid those problems, regardless of Goehring's capability or the needs of the employer.

Thus, based on the record, the Commission could have reasonably concluded that the City would have lawfully rejected him if it had interpreted and applied its policy in conformity with section 729.5, subdivision (a)(2), of the regulations by making the required individualized assessment of the work situation. On remand, the Commission must reconsider the evidence in terms of appropriate remedies and reevaluate its implied conclusions regarding Goehring's “rightful place” absent unlawful discrimination. It must determine whether the City established an affirmative remedial defense that Goehring would not have been hired even absent the unlawful discrimination.

We reverse the judgment and remand the matter to the superior court with directions to issue a writ of mandate requiring the Commission to set aside its decision and make new findings of fact and conclusions of law and for a redetermination of the appropriate relief to be afforded.

FOOTNOTES

1.  All further statutory references are to the Government Code, unless otherwise specified.

2.  The City's Policy 27, entitled “The Employment of Relatives,” provided in pertinent part: “Hiring . which will result in relatives working in the same department shall not be permitted.”

3.  The Commission's calculations were based on its assumption, in the absence of contrary evidence from the City, that Goehring would have received a top salary within the range proven.

4.  All references to the Commission's regulations are to California Administrative Code, title 2.

5.  The federal scheme for presentation and burdens of proof in a Title VII (42 U.S.C. Sec. 2000e et seq.) discrimination case is helpful here. The administrative regulations provide that the federal laws and their interpretations regarding employment discrimination law are to be considered to the extent practical and appropriate in interpreting the California Act and administrative regulations. (Cal. Admin. Code, tit. 2, Sec. 7285.1, subd. (b).) We refer to federal case law where appropriate throughout.)

6.  Unlike the California Act, Title VII does not prohibit marital status discrimination. (See 42 U.S.C., Sec. 2000e-2.)

ABBE, Justice:

STONE, Presiding Justice, and GILBERT, Justice, concur.