JUDICIAL REVIEW OF ADMINISTRATIVE AGENCY DECISION

Sam's Club, Inc. (Sam's Club) seeks judicial review of an October 1, 2001 decision by the Madison Equal Opportunities Commission (MEOC). Sam's Club terminated employee Tonya Maier because she refused to abide by Sam's Club's dress code, which prohibited wearing facial jewelry, in this case an eyebrow ring. The MEOC found that Sam's Club thereby discriminated against Maier on the basis of her physical appearance, in violation of Madison General Ordinance (MGO) §§ 3.23(8)(a) and 3.23(2)(aa).

This court concludes that the MEOC acted contrary to law, exercising its will and not its judgment when it found Sam's Club's articulated reason for not allowing its employees to wear facial jewelry, i.e., its desire to project and maintain a conservative business image, not a "reasonable business purpose" under MGO § 3.23(2)(aa). The court therefore reverses the MEOC's decision and hereby dismisses Maier's complaint.

BACKGROUND

The facts here are simple and undisputed. On November 4, 1999, at the Sam's Club located in Madison, general manager David Hill terminated Maier because she came to work wearing an eyebrow ring and refused to take it out in order to check in. Even though Sam's Club's dress code specifically prohibited the wearing of facial jewelry, Hill had previously allowed Maier to wear the ring if she covered it with a bandaid.

However, when two other employees showed up for work sporting various facial jewelry, Hill decided he would have to enforce the dress code more strictly. Hill therefore told all three employees they would have to remove the jewelry during work hours or face termination for failing to comply with the dress code. All three refused to remove their facial jewelry. Hill fired Maier. The other two tendered their resignations.

Maier subsequently filed a complaint with the MEOC which came on for hearing on August 24, 2000. The parties stipulated to the fact that Sam's Club had terminated Maier because she wore an eyebrow ring in violation of Sam's Club's dress code policy against facial jewelry. The parties also agreed to a bifurcated hearing to first determine whether discrimination had occurred, and if so, then to determine damages. Thus, the apparent issues for hearing were 1) whether wearing facial jewelry placed Maier in the protected class of "physical appearance" for purposes of MGO § 3.23(8)(a)¹; and 2) whether Sam's Club's desire to maintain a conservative business image, which precluded allowing its employees to wear facial jewelry, constitutes a "reasonable business purpose" under MGO § 3.23(2)(aa).²

On March 30, 2001, the MEOC's hearing examiner (HE) issued his decision and order. The HE found that Maier's firing for having worn an eyebrow ring placed her in the protected class of physical appearance under § 3.23(8)(a). The HE further concluded that Sam's Club's desire to maintain a conservative business image did not constitute a reasonable business purpose within the terms of § 3.23(2)(aa). Thus, having made those two determinations, the HE ultimately found that Sam's Club unlawfully discriminated against Maier when it terminated her for wearing an eyebrow ring.

Sam's Club appealed the HE's decision to the MEOC. On October 1, 2001, the MEOC adopted the HE's decision and order in its entirety, remanding the matter to the HE for proceedings regarding damages.

On October 26, 2001, Sam's Club filed the instant action naming the MEOC as sole defendant. However, on January 17, 2002, this court granted Maier's motion to intervene by its authority under Wis. Stat. § 803.09(2). In addition, on April 23, 2002, the court denied Maier's motion to strike those portions of Sam's Club's briefs referencing unpublished court of appeals decisions, and to strike the same from the "Index of MEOC Decisions and Related Cases" filed by Sam's Club with its briefs. The court determined that Sam's Club's references to such cases were for informational purposes only, and not cited as precedent.

The court now renders its opinion. Further facts will be set forth herein as necessary.

COURT'S JURISDICTION TO DECIDE THIS CASE

Sam's Club requested review under Wis. Stat. § 68.13(1), which provides for judicial review of municipal administrative decisions. Maier contends that Wis. Stat. ch.68 does not contemplate such review of the particular type of municipal agency decision involved herein. Maier thus claims, given Sam's Club's exclusive citation to that statutory scheme for purposes of this court's authority,³ the court is without subject matter jurisdiction to hear this matter. The court acknowledges that Wis. Stat. ch. 68 does not clearly provide for certiorari review of the MEOC's decision. Wis.. Stat. § 68.13(1) states

"[a]ny party to a proceeding resulting in a final determination may seek review thereof by certiorari within 30 days of receipt of the final determination. The court may affirm or reverse the final determination or remand to the decision maker for further proceedings consistent with the court's decision[,]"

but § 68.02 provides

"Determinations reviewable. The following determinations are reviewable under this chapter:

(1) The grant or denial in whole or in part after application of an initial permit, license, right, privilege, or authority, except an alcohol beverage license.

(2) The suspension, revocation or nonrenewal of an existing permit, license, right, privilege, or authority, except as provided in s. 68.03(5).

(3) The denial of a grant of money or other thing of substantial value under a statute or ordinance prescribing conditions of eligibility for such grant.

(4) The imposition of a penalty or sanction upon any person except a municipal employe or officer, other than by a court."

Thus, there appears to be no statutory provision for judicial review of a municipal agency's decision that does not include the elements described in § 68.02.

However, the court does not agree with Maier's conclusion. First, Maier offers no legal authority for her theory other than the words of the statutes quoted above. Second, the MEOC does not object to the court's jurisdiction, which fact the court deems significant. Finally, the court finds that the interests of justice are served by allowing for certiorari review, whether statutory or common-law decisions by a municipal agency such as the MEOC. The court thereby continues the tradition established by at least Dane County Judges Bardwell and Jones in so doing.⁴

SCOPE AND STANDARD OF REVIEW

A certiorari court is limited to determining 1) whether the administrative agency stayed within its jurisdiction; 2) whether it acted according to law; 3) whether its actions were arbitrary, oppressive or unreasonable, representing an exercise of its will rather than its judgment; and 4) whether the evidence was such that it might reasonably decide as it did. Federated Rural Electric Insurance Co. v. Kessler, MEOC, and the City of Madison, 131 Wis. 2d 189, 205-06, 388 N.W.2d 553 (1986).

Determining whether an agency, in this case the MEOC, acted according to law requires the court to construe MGO §§ 3.23(8)(a) and 3.23(2)(aa) and apply those ordinances to the facts. Id., at 206. The question of whether the facts of a particular case fulfill a particular legal standard presents a question of law. Id. Given that the parties here stipulated to the underlying facts, the issues before the HE and the MEOC were purely legal.

A certiorari court generally accords an agency's interpretations of law some level of deference. UFE, Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996). Varying levels of deference apply depending upon the relative capabilities of the agency and the reviewing court for interpreting the particular statutes, rules, or as in this case ordinances, at issue. Id. However, regardless what level of deference should apply, a reviewing court is not bound by the agency's conclusions if they are unreasonable. Morris v. Employee Trust Funds Bd., 203 Wis. 2d 172, 186-187, 554 N.W.2d 205 (Ct. App. 1996).

An agency's interpretation of law is unreasonable if it directly contravenes the words of the statutes or rules involved, it is clearly contrary to legislative intent, or it is without rational basis. Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 662, 539 N.W.2d 98 (1995). Where a statute or ordinance is ambiguous, the agency by definition cannot directly contravene the ordinance's words. Id. However, that the agency's interpretation does not directly contravene the words of an ordinance does not necessarily protect that interpretation from unreasonableness. Id., at n.5.

The court has not been able to find case law explaining how or when an agency's interpretation of law should be deemed lacking a rational basis. However, an agency's decision is considered reasonable if

"... it accords with the language of the [ordinance], the [ordinance's] legislative history, and the legislative intent; if the interpretation is consistent with the constitution, the [ordinance] read as a whole, and the purpose of the [ordinance]; and if the interpretation is consistent with judicial analyses of the [ordinance]."

Lisney v. LIRC, 171 Wis. 2d 499, 507, 493 N.E.2d 14 (1992).

ANALYSIS AND DECISION

The parties spend a great deal of their briefs arguing about whether the HE properly applied the Burdine-McDonnell Douglas⁵ burden-shifting approach commonly used for analyzing employment discrimination cases. However, the court finds it unnecessary to address that question. As the court noted earlier in this opinion, there were really only two issues before the HE to decide, both of them legal, with the ultimate question of discrimination contingent upon the answers to those two questions. The Burdine-McDonnell Douglas approach deals with how factual evidence of discrimination is presented, which does not apply in this situation because the parties stipulated to the facts.

The HE's decision hinged on how he answered the following two questions:

1) whether wearing facial jewelry placed Maier in the protected class of "physical appearance" for purposes of MGO § 3.23(8)(a); and

2) if Maier was in the protected class, whether Sam's Club's desire to maintain a conservative business image, prohibiting its employees from wearing facial jewelry, constitutes a "reasonable business purpose" under MGO § 3.23(2)(aa).

Because the HE "accept[ed] that facial jewelry falls within the 'other aspects of appearance' portion of the physical appearance definition" of § 3.23(8)(a), and concluded that "the articulated business purpose of a conservative image does not form a reasonable business purpose for [] purposes of the ordinance," he also concluded that Sam's Club had discriminated against Maier when it fired her for wearing an eyebrow ring.

The meaning of the phrase "other aspects of appearance," when considered in combination with all the specific aspects of physical appearance enumerated in the ordinance is not clear to this court. The court therefore assumes without deciding that the HE 's interpretation of that phrase is correct. It is the HE's interpretation of the phrase "reasonable business purpose" that the court finds unreasonable and lacking a rational basis in this case.

The HE finds several problems with Sam's Club's desire to maintain a conservative business image as a reasonable business purpose. First, the HE picks apart the reasons Sam's Club offers, which are: 1) requiring conservative dress of its employees having public contact assists in keeping customers focused on Sam's Club's products; and 2) that maintaining a conservative dress code for its employees is in keeping with its desired public image, which not only reflects Sam's Club's own general philosophy, but which it also believes comports with its customers' expectations.

With regard to the first of Sam's Club's reasons, the court finds that the HE misses the point in that he takes it much too literally. The HE assesses the likelihood of one individual customer, shopping at Sam's Club for its quality and prices, being distracted by seeing an eyebrow ring on one of its employees to the point where that customer's decision to purchase goods is adversely affected. Of course, when framed that way, such a possibility does not seem very likely. However, it is obvious to the court that Sam's Club's concern in that instance is not with the individual customer. Rather, it is with its customer base taken as a whole, and its customers' overall perception that Sam's Club is a spartan, "no-frills" business, doing its best to hold prices down while maintaining product quality."⁶

As for Sam's Club's desire to project an image consistent with its own conservative or "traditional" value system, the HE seems to have reacted in a knee-jerk fashion to what he finds personally repugnant. First, he states simply that in his opinion, the desire to project a conservative business image is not a reasonable business purpose under the ordinance. While allowing that "[d]ress codes ... have their place in business[,]" and that "[b]usiness image is an important aspect of some businesses[,]" he arbitrarily decides that Sam's Club's desire to maintain a conservative business image by, among other things, prohibiting its employees from wearing facial jewelry does not constitute a reasonable business purpose.

Next, decrying the dangers of retailers catering to the lowest common denominator of their customers' prejudices, he points to Gerdom v. Continental Airlines, Inc., 692 F. 2d 602 (9th Cir. 1982) as an example. However, Gerdom is readily distinguishable from this case. In Gerdom, Continental discharged a female flight attendant for having surpassed the prescribed weight limit because it believed its customers preferred being served by thin, attractive women. Id., at 604. Gerdom was a sex, or gender discrimination case. Id., at 610. Its weight limit did not apply to male flight attendants.⁷ Id., at 604. In the case at bar, Sam's Club's dress code policy prohibiting facial jewelry is uniformly applied to all its employees.

Maier too objects to Sam's Club's desire to maintain a conservative business image as a reasonable business purpose for proscribing facial jewelry on its employees. Like the HE, Maier bases her objection on the notion that it is wrong, and inconsistent with the ordinances, for any business to "cater to the perceived prejudices of [its] customers .... " As did the HE, Maier also analogizes this case to other types of discrimination, such as that involved in Gerdom, and raises the specter of racial discrimination as well.

Next, Maier claims that the MEOC has historically found discrimination where it believed an employer's "reasonable business purpose" for prohibiting certain manners of dress or adornment by its employees was based on the employer's fear that its customers would be offended. Maier cites Maxwell v. Union Cab Cooperative, MEOC Case No. 21028 (12/31/91), in which a male cab driver complained that he suffered discrimination because he wore makeup, earrings and nail polish to work. Although the hearing examiner in that case did not find discrimination on the basis of physical appearance, the MEOC did. Union Cab did not want Maxwell wearing makeup, earrings, and nail polish on the job because it believed Maxwell was alienating the cooperative's business accounts by doing so.

Again, the court finds Maxwell distinguishable from the instant case. Union Cab's directive to Maxwell not to dress or adorn himself as described above while working was very likely intended to protect the cooperative from its business customers' prejudice toward homosexuals. The point being that Union Cab would not likely have made the same request of a female driver as it did of Maxwell. It was likely not Maxwell's physical appearance per se to which Union Cab objected. Rather, it was more likely what the sight of a man adorned as Maxwell was represented to the cooperative's business clients. As noted, in this case, Sam's Club's policy against facial jewelry on its employees applies across the board.

Both the HE and Maier contend that the MEOC's decision in Quinn-Gruber v. WPS, MEOC Case No. 2877 (Recommended Decision 9/27/82) is inapposite as support for Sam's Club's position. The hearing examiner in that case (HEQ) stated as a matter of law that "it is not improper for an employer to proscribe in a uniform manner, for purposes of business image, the wearing of tennis shoes and/or blue jeans in an office setting where there is even minimal public contact." Id. at 12-13.

However, the complainant in Quinn-Gruber was fired ostensibly because she wore dresses and skirts with "extreme hemlines," i.e., too long, in violation of WPS's dress code. The HEQ determined that WPS's articulated reason for not allowing such long skirts, which was that they posed a health and safety issue, was not credible. Id., at 14. The HEQ also determined that WPS's prohibition against "extreme hemlines" was too vague for a person of average intelligence to understand what was acceptable and what was not. Id., at 13.

The MEOC vacated the HEQ's decision, stating the complainant had not sufficiently carried her burden to prove that WPS's "health and safety" concerns regarding "extreme hemlines" was a pretext for discrimination on the basis of physical appearance. MEOC Case No. 2877 (Order from Appeal 1/27/83), at 2.⁸ The MEOC's decision was silent as to the HEQ's finding that business image is a reasonable business purpose. Id. Thus, the HE's (in this case) dismissal of Quinn-Gruber as support for Sam's Club's position is incorrect.

The HE here also distinguishes Quinn-Gruber from this case on the basis that Quinn-Gruber involved an office setting rather than a general retailer's business. However, the HE offers no reason or legal support for such a distinction, and the court therefore finds it arbitrary and unreasonable.

Maier asserts that the Quinn-Gruber decision is too old to constitute sufficient legal authority. She also contends that the MEOC has not followed Quinn-Gruber in any of its decisions since. Maier's argument goes to the issue of what level of deference the court should afford the MEOC's decision here. However, the court has already determined it owes no deference to the MEOC in this case, because the court finds its decision unreasonable. Morris v. Employe Trust Funds Bd., supra, at 186-87.

Maier also claims that Sam's Club's reliance on State ex rel. McDonald's v. MEOC, Dane County Case No. 82CV2500 (7/6/83) is misplaced because that decision is not precedent. However, the court does find it instructive in that Judge Bardwell seemed to take for granted the notion that McDonald's desire to project a "clean public image" was not improper. Additionally, the court finds it interesting that Maier objects to Sam's Club's reliance on McDonald's when the HE in this case cited to the unpublished court of appeals decision in McDonald's as support for his opinion that considerations of health and safety constitute a reasonable business purpose, while a desire to project a conservative business image does not.

Much of the MEOC's and Maier's position evokes a "slippery slope" argument, i.e., that if Sam's Club is allowed to prohibit its employees from wearing facial jewelry on the basis that it believes its customer base expects an overall conservative appearance in its business, what could come next is that a business might decide its customers are offended by the appearance of employees of color, or that its customers only want to see large-breasted female employees. However, the court sees the slippery slope argument from a different perspective: if it is considered discrimination for a business like Sam's Club to prohibit the wearing of facial jewelry by all of its employees, does that mean Sam's Club would have to allow its employees to come to work wearing whatever they please, as long as they also wear the prescribed company vest?

Finally, although the HE declined to address Sam's Club's argument that for the purposes of its dress code the terms prescribe and proscribe are the same, the court agrees with Sam's Club. Sam's Club's position is consistent with the HEQ's holding in Quinn-Gruber, which the MEOC left in tact on appeal. Quinn-Gruber v. WPS, MEOC Case No. 2877 (Recommended Decision and Order 9/27/82, Order from Appeal, 1/27/83). The HEQ stated

"Further, I hold that the Ordinance, by inference, permits an employer to proscribe attire so long as the proscription is uniformly applied to employees for a reasonable business purpose. Essentially, for purposes of the physical appearance ordinance section, "prescription" and "proscription" are one in [sic] the same. "

Recommended Decision and Order, at 12.

CONCLUSION

Based on all of the above considerations, the court finds that the MEOC's decision in this case is unreasonable exhibiting an exercise of its will and not its judgment. The court therefore REVERSES the MEOC's decision and hereby DISMISSES Maier's complaint.

IT IS SO ORDERED.

Dated this 19th day of July, 2002.

BY THE COURT:

The Honorable Robert A. DeChambeau
Dane County Circuit Court - Branch 1

¹MGO § 3.23(8)(a) reads in relevant part as follows:

(8) Employment Practices. It shall be an unfair discrimination practice and unlawful and hereby prohibited:

(a) For any person or employer individually or in concert with others to fail or refuse to hire or to discharge any individual ... because of such individual's sex, race, religion, color, national origin or ancestry, age, handicap, marital status, source of income, arrest record or conviction record, less than honorable discharge, physical appearance, sexual orientation, political beliefs or the fact that such person is defined herein ....

(Emphasis added.)

²MG0 § 3.23(2)(aa) reads in relevant part as follows:

(aa) Physical appearance means the outward appearance of any person, irrespective of sex, with regard to hair style, beards, manner of dress, weight, height, facial features, or other aspects of appearance. It shall not relate, however, to the requirement of cleanliness, uniforms, or prescribed attire, if and when such requirement is uniformly applied ... to employees in a business establishment for a reasonable business purpose.

(Emphasis added.)

³Sam's Club also cited MGO § 3.23(10)(c)(4), which states that all final determinations of the MEOC "shall be subject to review as by law tray be provided." However, that ordinance has no bearing on whether the court has subject matter jurisdiction over the action in this forum.

⁴The court here refers to Dane County Circuit Court cases Wlliam Karaffa v. Equal Opportunity Commission, No. 82CV2500 (decided by the Honorable Richard W. Bardwell for Branch 1), and Union Cab Cooperative v. Equal Opportunities Commission of the City of Madison, No. 92CV3260 (decided by the Honorable P. Charles Jones for Branch 3). Copies of those decisions were provided to the court by Sam's Club with its briefs.

⁵Tax Department of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089 (1981), McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-803, 93 S.Ct. 1817 (1973).

⁶The court believes such a perception would not have to be tied to a conservative life philosophy - it could reflect merely a desire for simplicity.

⁷At the time of the Gerdom case, Continental's male in-flight service workers had the title of Directors of Passenger Service (DPS). The DPS's earned more money for essentially the same work as that of the female flight attendants, although they were also considered supervisors. Gerdom, 692 F.2d at 604.

⁸The MEOC further remanded Quinn-Gruber back to the HEQ "to re-examine the issues of alleged retaliation for opposition to discriminatory practices." Order from Appeal, at 2.