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ALLEGHENY HOUSING REHABILITATION CORPORATION v. COMMONWEALTH PENNSYLVANIA (04/24/89)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: April 24, 1989.

ALLEGHENY HOUSING REHABILITATION CORPORATION, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, PENNSYLVANIA HUMAN RELATIONS COMMISSION, RESPONDENT

Appeal from the Order of the Pennsylvania Human Relations Commission, in the case of Faith L. Hodge v. Allegheny Housing Rehabilitation Corporation, No. E-14987.

COUNSEL

James Anthony Prozzi, with him, Stanley M. Stein, Feldstein, Grinberg, Stein & McKee, for petitioner.

Vincent A. Ciccone, with him, Diane Blancett-Maddock, and Elisabeth S. Shuster, for respondent.

Judges Colins and McGinley, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Senior Judge Barbieri.

Author: Barbieri

[ 125 Pa. Commw. Page 345]

Allegheny Housing Rehabilitation Corporation (AHRC) appeals the July 7, 1988 final order of the Pennsylvania Human Relations Commission (Commission), which adopted the June 16, 1988 recommendation of the Hearing Examiner, who found that AHRC violated Section 5(a) of the Pennsylvania Human Relations Act*fn1 (Act) in terminating Faith L. Hodge's (Hodge) employment as a security manager.

Issues presented for review are whether the Commission erred in failing to hold an additional evidentiary hearing and in entering a substantially similar order as that originally issued after the Pennsylvania Supreme Court remanded this matter and stated, inter alia, that the record was "woefully inadequate"; and whether the

[ 125 Pa. Commw. Page 346]

Commission erred in permitting a Hearing Examiner, who was not present at the public hearing, to assess the credibility of witnesses and formulate new findings on the basis of a cold record. Since we must remand on the first issue, we do not reach the second.

AHRC, a limited profit corporation that manages non-profit and low-income housing developments, served as management agent of Second East Hills Park (Housing Development), a Pittsburgh housing development, for the Department of Housing and Urban Development (HUD). HUD operated the Housing Development as mortgagee-in-possession upon the owner's default.

HUD regulations required AHRC to provide security services for the Housing Development within HUD-imposed budgetary constraints. AHRC thus elicited several bids from security firms but rejected them as too high and thereafter hired individuals as independent contractors to serve as security guards for the Housing Development.*fn2

In mid-August 1978, Hodge was hired as a security guard for the Housing Development by AHRC's resident manager and, within one month, was promoted to security manager.*fn3 By letter dated November 2, 1978, AHRC's director of management, the resident manager's

[ 125 Pa. Commw. Page 347]

    superior, advised Hodge that her services as security manager were terminated due to realignment of AHRC's security force. Hodge subsequently filed a complaint with the Commission, alleging that she was unlawfully discharged because of her sex. AHRC, in response, contended that Hodge's dismissal was based upon her lack of membership in Certified Police Unit 644 (Unit 644); AHRC's security force realignment; and non-existence of a security manager position.

After public hearing, the Hearing Examiner*fn4 concluded that AHRC had unlawfully discriminated against Hodge on the basis of her sex. The Commission adopted the Hearing Examiner's findings of fact, conclusions of law and opinion by final order dated July 5, 1983, whereupon AHRC petitioned this Court for review.*fn5 This Court, having found the Commission's July 5, 1983 final order supported by substantial evidence and in accordance with the law, affirmed the Commission's finding of sex-based discrimination. Allegheny Housing Rehabilitation Corporation v. Pennsylvania Human Relations Commission, 88 Pa. Commonwealth Ct. 443, 489 A.2d 1001 (1985).

AHRC petitioned for, and was granted, allowance of appeal by the Pennsylvania Supreme Court, which vacated this Court's judgment and remanded the matter to the Commission to cure its misapplication of the standard

[ 125 Pa. Commw. Page 348]

    of proof.*fn6 Allegheny Housing Rehabilitation Corporation v. Pennsylvania Human Relations Commission, 516 Pa. 124, 532 A.2d 315 (1987). The Supreme Court found that Hodge had presented sufficient evidence to support a prima facie case of sex-based discrimination under the Act;*fn7 that AHRC advanced a legitimate, non-discriminatory

[ 125 Pa. Commw. Page 349]

    reason for Hodge's dismissal sufficient to satisfy its burden of production; and that AHRC's evidence thus raised a question of fact as to whether it intentionally discriminated against Hodge.

The Supreme Court further found that both the Commission and this Court misapplied the shifting burdens of proof. The Supreme Court noted as well that many witnesses, who may have offered significant evidence, did not testify; and stated that it could not be certain whether the Commission's findings of fact were influenced by a mistaken view of the law or whether substantial evidence supported the Commission's determination in light of the "woefully inadequate" record and heightened level of scrutiny erroneously applied to AHRC's evidence.

On remand, the Commission appointed a new Hearing Examiner to replace the original Hearing Examiner, who was no longer with the Commission, and advised the new Hearing Examiner to review the record and submit a recommendation to the full Commission. The new Hearing Examiner neither conducted further evidentiary proceedings nor received additional evidence.

After review of the record, the new Hearing Examiner found that Hodge sustained her burden of establishing a prima facie case and that AHRC met its burden of producing evidence of a legitimate, non-discriminatory reason for Hodge's dismissal. The new Hearing Examiner further found, after evaluation of both parties' evidence, that Hodge satisfied her ultimate burden of proving sex-based discrimination by a preponderance of the evidence. The Commission, having determined that substantial competent evidence supported these findings, adopted the new Hearing Examiner's recommendation by final order dated July 7, 1988 and awarded back pay and interest to Hodge; entered a cease and desist order against AHRC; ordered AHRC to publish all security

[ 125 Pa. Commw. Page 350]

    force openings in a manner calculated to assure female applicants; and instituted a reporting procedure to track AHRC's compliance efforts. This petition for review followed.

As to AHRC's initial contention that the Commission erred in failing to hold further evidentiary proceedings in light of the Supreme Court's holding that the evidence of record was "woefully inadequate" to support a finding of sex-based discrimination, we note that the majority opinion of the Supreme Court contains the following statements:

The transcript of the hearing in this case displays a kind of gamesmanship played out between the parties (more precisely, their counsel), with a primary objective being the presentation of the bare minimum amount of evidence necessary to meet the burdens of proof as they were thought to exist under McDonnell Douglas [McDonnell Douglas Corporation v. Green, 411 U.S. 792 (1973)] and General Electric [General Electric Corporation v. Pennsylvania Human Relations Commission, 469 Pa. 292, 365 A.2d 649 (1976)]. Many witnesses whom it would be thought could offer important proof on behalf of both sides were not presented. Because the record is thus woefully inadequate and because the Commission erroneously subjected the employer's proof to a heightened level of scrutiny, we cannot be certain that its findings of fact were not influenced by its mistaken view of the law or that substantial evidence supports its conclusion (footnote omitted). We accordingly vacate the judgment of the Commonwealth Court and remand the case to the Commission for further proceedings consistent with this opinion. (Emphasis added.)

[ 125 Pa. Commw. Page 351]

Court, Hodge does not satisfy either condition, although she had weapons certification during her tenure as a police officer. The Supreme Court also noted that if this document is given credence and considered relevant to conditions at the time of Hodge's employment, the Commission would have to disregard substantial evidence to find that Hodge was qualified for a security guard position.

Review of the record, however, appears to support the Commission's partial consideration of the Security Force Policy. First, the parties stipulated that security personnel duties as set forth in this document were comparable to those performed by Hodge. Stipulation of Fact No. 11. There was no stipulation as to the relevance of any other provision contained therein. Consequently, the Commission was bound only by the limited stipulation of the parties and not by this document in its entirety. Moreover, the document itself, in conjunction with record evidence, appears to demonstrate that AHRC did not strictly adhere to all terms contained therein, rendering the document suspect. A provision of this document, e.g., sets a ceiling upon the number of security personnel to be hired, yet AHRC exceeded these numbers during and after Hodge's employment. In any event, a document drafted after Hodge's dismissal could hardly be deemed competent evidence of the basis for that dismissal; certainly, not controlling.

We further note that the Commission failed to address a hearsay issue raised by AHRC challenging a portion of the Hearing Examiner's discussion which states that:

The evidence considered as a whole leads to the conclusion that no agreement existed. Instead, security guards under the Complainant's supervision only complained about the Complainant after her selection as supervisor. It would

[ 125 Pa. Commw. Page 353]

    appear that their complaint was more concerned with being supervised by the Complainant, perhaps because she is a woman, than with the fact that Complainant was not a member of C.P.U. 644 [Unit 644].

AHRC asserts that the only evidence of record to support these statements is Hodge's inadmissible hearsay testimony that the security guard with whom she most often worked told her that he heard that Unit 644 members held a meeting prior to her discharge at which someone demanded that AHRC "get rid of that girl". It appears, however, that substantial competent evidence exists that Unit 644 members held a meeting on or about October 14, 1978, shortly after Hodge's promotion, to discuss their problems with AHRC's management personnel. Among the problems discussed was Hodge's employment. Stipulation of Fact No. 13. Moreover, the Hearing Examiner's speculation that the complaints may have been prompted, in part, by Hodge's sex is mere surplusage since the Hearing Examiner was clearly concerned with the timing of the complaints to supplement his conclusion that no agreement existed. Even if no other substantial competent evidence supported the subject statement, the Hearing Examiner's conclusion was sufficiently supported by other grounds and thus would stand absent this statement. Nonetheless, this is an issue which the Commission should address on remand.

Finally, we also call attention to Section 9 of the Act, 43 P.S. ยง 959(g), which provides in pertinent part:

Three or more members of the Commission or a permanent hearing examiner designated by the Commission shall constitute the Commission for any hearing required to be held by the Commission under this act. The recommended findings, conclusions and order made by said members or

[ 125 Pa. Commw. Page 354]

    permanent hearing examiner shall be reviewed and approved or reversed by the Commission before such order may be served upon the parties to the complaint. (Emphasis added.)

We do not mean to suggest that the Commission cannot exercise plenary fact-finding authority with credibility determinations, whether approving or contrary to those made by the Hearing Examiner, but the record should demonstrate whether or not the Hearing Examiner in question is a "permanent" one and that his findings, conclusions and order have been "reviewed and approved or reversed by the Commission."

This case will be remanded.

Order

And Now, this 24th day of April, 1989, the order of the Pennsylvania Human Relations Commission dated July 7, 1988, is hereby vacated and this case is remanded to the Commission for proceedings as indicated in the foregoing opinion.

Disposition

Vacated and remanded.


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