Legislature(2003 - 2004)

04/20/2004 08:08 AM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
           SB 354-HUMAN RIGHTS COMMISSION PROCEDURES                                                                        
MR. SCOTT  NORDSTRAND, Deputy  Attorney General,  Civil Division,                                                               
Department of  Law (DOL),  told members he  spent about  15 years                                                               
practicing in the  employment field when in  private practice. He                                                               
practiced before  the Human Rights  Commission on  many occasions                                                               
and  is familiar  with  its procedures.  He  maintained that  the                                                               
state  has  an interest  in  having  an effective  administrative                                                               
procedure to  root out discrimination  and provide  remedies, and                                                               
to have a procedure  that is fair to the state  when the state is                                                               
the defendant.                                                                                                                  
MR. NORDSTRAND  explained that  SB 354  is designed  to rebalance                                                               
some  of  the Human  Rights  Commission's  (HRC's) procedures  to                                                               
provide more  fairness in the  process and more effective  use of                                                               
the  HRC's  resources. He  gave  the  following synopsis  of  the                                                               
     The  primary  thing that  this  does  is it  gives  the                                                                    
     executive director of the commission  the power to pick                                                                    
     and  choose  those cases  that  are  most deserving  of                                                                    
     proceeding to hearing. That  power was essentially lost                                                                    
     to  the director  in the  case that's  referenced here,                                                                    
     Department of  Fish and  Game v.  Meyer, 906  P.2d 1365                                                                    
     (Alaska 1995).                                                                                                             
     To  understand this,  you have  to understand  a little                                                                    
     bit about what the procedure  is when you go before the                                                                    
     commission.  Let's assume  for a  moment we're  talking                                                                    
     about  an  employer-employee  situation, which  is  the                                                                    
     most  common  kind  of  case   that  comes  before  the                                                                    
     commission.  There are  housing cases  and other  cases                                                                    
     but  that's  the  most common  and  probably  the  most                                                                    
     contentious.   A   question   of  whether   there   was                                                                    
     discrimination based  upon age  in hiring  comes before                                                                    
     the commission. The way that  happens is the person who                                                                    
     didn't get  the job  would go  down to  the commission,                                                                    
     would say  that they  felt they had  been discriminated                                                                    
     against  based on  age, and  then the  commission staff                                                                    
     would assist  them and prepare a  complaint.... You can                                                                    
     see that's AS 18.80.100, that process.                                                                                     
     So  the  complaint  is  filed  and  it's  sent  to  the                                                                    
     employer. The  employer has  an opportunity  to respond                                                                    
     and generally  that's the point  at which  the employer                                                                    
     would  hire  an attorney  if  they  choose to  and  the                                                                    
     attorney would gather  evidence about the circumstances                                                                    
     and prepare...a response back  to the commission saying                                                                    
     why they  didn't think there was  discrimination or, on                                                                    
     occasion, there may have been  something wrong and they                                                                    
     offer  to remedy  it  in  some way.  And  so, then  the                                                                    
     process  begins   for  the  commission  to   assign  an                                                                    
     investigator.  The  investigator  is assigned  to  look                                                                    
     into both sides of the  matter and make a determination                                                                    
     ...under  AS  18.80.110   that  there  was  substantial                                                                    
     evidence of a discriminatory practice.                                                                                     
     That  still is  the norm.  That has  not changed  under                                                                    
     here.  So an  investigator,  if  an investigator  finds                                                                    
     there's   substantial    evidence   of   discriminatory                                                                    
     practice,  then the  case is  sent to  something called                                                                    
     conciliation.  You might  call  it mediation,  whatever                                                                    
     you want to call it. It's  a time when the employer and                                                                    
     the employee and the commission  staff sit down and see                                                                    
     if they can work something out.                                                                                            
     If there's a failure of  consideration, as they say, at                                                                    
     the commission,  then the executive  director certifies                                                                    
     that fact and it's assigned  forward to hearing. And at                                                                    
     that  point  a  human  rights  advocate,  which  is  an                                                                    
     attorney  employed by  the commission,  is assigned  to                                                                    
     the  case to  represent  the  executive director.  They                                                                    
     don't  technically  represent  the  employee  but  they                                                                    
     pursue their  interests before the commission.  They go                                                                    
     through  a formal  discovery  process...not unlike  any                                                                    
     lawsuit you're  in - depositions,  interrogatories, all                                                                    
     of  that kind  of thing  happens and  all of  the costs                                                                    
     associated  with that  happen too.  It may  be somewhat                                                                    
     quicker,  but  it  is,  by  no  means,  a  particularly                                                                    
     inexpensive way  to come to  conclusion, and  much more                                                                    
     than a civil case.                                                                                                         
     And then  at the end,  if there's a hearing,  a hearing                                                                    
     officer is assigned.  The case is not  heard before the                                                                    
     commission.... Generally a  contract-hearing officer is                                                                    
     hired.  They hear  the case,  they write  a recommended                                                                    
     decision,  an order,  that's  then  recommended to  the                                                                    
     Human Rights  Commission that  it ultimately  can adopt                                                                    
     or  not. The  commission has  remedial powers  that are                                                                    
     limited. They don't include, for  example, the power to                                                                    
     award  punitive  damages,  the   power  to  award  non-                                                                    
     economic  damages, which  is pain  and suffering,  that                                                                    
     kind of  - emotional stress kinds  of things. Generally                                                                    
     it's  injunctive  relief,  like putting  them  back  to                                                                    
     work, back pay, benefits, that  kind of thing - as they                                                                    
     indicate, making the employee or the plaintiff whole.                                                                      
     Now what happened  in this Meyer case  that created the                                                                    
     problem  was that  the Supreme  Court determination  of                                                                    
     what  is substantial  evidence  to  require a  hearing,                                                                    
     that is, if you have  substantial evidence, you have to                                                                    
     have a  hearing -  that's what  the Supreme  Court says                                                                    
     and   that's   what  the   law   has   said  to   date.                                                                    
     Unfortunately...the standard is  very low, according to                                                                    
     the Supreme Court,  and I'm not sure  if that's because                                                                    
     of the  way the  statute is written  or because  of the                                                                    
     Supreme Court's  interpretation of it.  Regardless, the                                                                    
     standard is  very low. In  fact, the allegation  has to                                                                    
     be completely  lacking in merit  in order not to  go to                                                                    
     hearing.  That's a  very  low standard.  And  so, as  a                                                                    
     result, essentially  any case  that's got any  scrap of                                                                    
     evidence  at  all of  a  discriminatory  event goes  to                                                                    
     hearing. That's  a problem  for the  commission because                                                                    
     the commission really  has no way to weed  out the good                                                                    
     cases  from   the  bad  and  use   its  resources  most                                                                    
     effectively  and to  be the  most  effective agency  it                                                                    
     Let me give you a  comparison, for example, of what the                                                                    
     Equal Employment Opportunity Commission  - the feds do.                                                                    
     The feds do the same  thing. They have an investigation                                                                    
     process but, in  fact, they decide whether  to take the                                                                    
     case  or  not.   The  feds  don't  have,   in  fact,  a                                                                    
     commission or  hearing process to  go to. If  they want                                                                    
     to bring charges of  discrimination under federal laws,                                                                    
     civil  rights laws,  they  have to  go  to the  federal                                                                    
     courts. They have to go  downtown to the courthouse and                                                                    
     file a  lawsuit. That's not  the case here. But  in any                                                                    
     case,  they  have  the  power  to  choose  amongst  the                                                                    
     various  cases. What  this bill  does is  it gives  the                                                                    
     executive  director  the power  to  say  no, that  case                                                                    
     really isn't a  very good case. We're not  going to win                                                                    
     that case so we're not  going to take that one forward.                                                                    
     We'll  use our  resources  somewhere  else. That's  the                                                                    
     primary thing that this bill does.                                                                                         
MR.  NORDSTRAND referred  to the  analysis section  entitled                                                                    
"Improves  commission  procedures"   and  said  it  contains                                                                    
remedies  to many  small problems  encountered by  attorneys                                                                    
over  the  years.  First,  the  HRC  is  not  authorized  to                                                                    
compromise   claims   during   the   conciliation   process.                                                                    
Therefore, if  a person didn't  get a job  on May 1  and the                                                                    
hearing is on  December 1, the HRC would have  no choice but                                                                    
to order back pay for seven  months. Under the bill, the HRC                                                                    
would have  the choice of  ordering less back pay.  The bill                                                                    
also  requires   the  HRC   to  follow   the  Administrative                                                                    
Procedures Act,  unless otherwise  provided for  in statute.                                                                    
It also allows a hearing  officer to grant summary judgment,                                                                    
either for or  against a case before him or  her. Right now,                                                                    
commission  regulations  preclude  a  hearing  officer  from                                                                    
doing  that. He  told members  that an  attorney could  file                                                                    
every case  that goes before the  HRC as a lawsuit  in court                                                                    
and  have  access to  more  remedies,  such as  non-economic                                                                    
damages. However,  in the  court system, if  a case  is very                                                                    
bad or  very good,  the amount  the court  must hear  can be                                                                    
limited by  a summary  judgment ruling. Because  that option                                                                    
does not  exist with the HRC,  the HRC must hear  every case                                                                    
before it. SB 354 will address that issue.                                                                                      
SENATOR  THERRIAULT  asked why  the  HRC  is precluded  from                                                                    
summary judgments now.                                                                                                          
MR.  NORDSTRAND said  he believes  the HRC  did not  want to                                                                    
deal with  summary judgment motions because  of the workload                                                                    
of the  human rights advocates.  However, on the  flip side,                                                                    
allowing those motions will potentially  prevent a number of                                                                    
cases  from  going   to  a  hearing.  He  said   it  is  his                                                                    
understanding   that    summary   judgment    motions   were                                                                    
specifically excluded from the HRC regulations.                                                                                 
He then  said, regarding  SB 354  enhancing fairness  of the                                                                    
commission's   procedures,  in   the  example   of  an   age                                                                    
discrimination case,  if a  finding of  substantial evidence                                                                    
is made,  the case would  go forward to  discovery. However,                                                                    
in  the  past, if  the  problem  was  determined to  be  sex                                                                    
discrimination  rather  than  age  discrimination,  the  HRC                                                                    
could go  forward with  a hearing on  any claims  it amended                                                                    
its complaint to include. He stated:                                                                                            
     What we have found is  that there are times when -                                                                         
     I  mean that's  simply  sort  of sidestepping  the                                                                         
     requirement. If we're  to believe that substantial                                                                         
     evidence  should be  found  for  every claim  that                                                                         
     goes to hearing,  then if a new issue  comes up in                                                                         
     discovery for  which there has been  no finding of                                                                         
     substantial  evidence, this  simply provides  that                                                                         
     it  goes back  to  that  process. An  investigator                                                                         
     looks at it and  determines if there's substantial                                                                         
     evidence before that complaint  can be amended and                                                                         
     go forward so that  the employer or the respondent                                                                         
     can have  the benefit  of the informal  process of                                                                         
     going  back through  investigation, a  response on                                                                         
     the sex  discrimination case, for example,  and an                                                                         
     opportunity  to conciliate.  And  perhaps, in  the                                                                         
     face  of  the  new  evidence,  conciliation  might                                                                         
     actually be more likely, who  knows? But it's just                                                                         
     a  matter of  fairness that  that's the  door that                                                                         
     opens to hearing - substantial evidence. It                                                                                
     should be there for every claim that's asserted.                                                                           
MR. NORDSTRAND then  said the commission has  taken the view                                                                    
that it  has a 10.5  percent interest rate available  to it.                                                                    
The bill  will tie that  rate to the standard  interest rate                                                                    
charged by other agencies.                                                                                                      
Regarding  the remedies  available, MR.  NORDSTRAND said  AS                                                                    
18.80.130(a) contains  a list of  possibilities the  HRC can                                                                    
award  and says  it  can award  any  appropriate relief.  In                                                                    
DOL's  estimation, it  is simpler  to list  what the  actual                                                                    
remedies are  in a system  that is designed to  have limited                                                                    
remedies.    DOL    identified   the    injunctive    relief                                                                    
reinstatement,   training    requirements,   and   financial                                                                    
remedies used by the HRC.  The financial remedies consist of                                                                    
back  pay and  front  pay, which  is from  the  time of  the                                                                    
hearing  forward to  remediate any  difficulties in  putting                                                                    
that person back  into the workforce at the  same pay level.                                                                    
DOL codified that.                                                                                                              
MR. NORDSTRAND  indicated the controversial part  is the cap                                                                    
on the front pay. DOL's original  cap in the bill was set at                                                                    
two  years  of wages.  The  Senate  State Affairs  Committee                                                                    
lowered  that cap  to  one  year. He  pointed  out the  bill                                                                    
contains a standard  of what a complainant must  prove to be                                                                    
eligible for  front pay  [bottom of page  4]. He  noted that                                                                    
DOL  discussed  this  bill  with   the  HRC  and  found  the                                                                    
commission  to be  in agreement  with  the proposed  changes                                                                    
with  the exception  of the  front pay  issue. DOL  believes                                                                    
that  in order  to divine  what economic  damages are  in an                                                                    
employment case, one has to  determine how much the employee                                                                    
would have  earned if he  or she had not  been discriminated                                                                    
against.  The  amount  that  person  earned  in  alternative                                                                    
income is then subtracted. Front  pay is a different animal,                                                                    
in that no one knows what income  he or she will earn in the                                                                    
future and how far out into  the future that money should be                                                                    
AN   UNIDENTIFIED  SPEAKER   asked   how   that  number   is                                                                    
MR. NORDSTRAND said  the compromise was to  cap that amount.                                                                    
DOL  believes this  system was  designed to  provide limited                                                                    
remedies by  the government,  rather than  taking a  case to                                                                    
court. He  pointed out the  language in the  current version                                                                    
of the  bill doesn't necessarily  support an award  of front                                                                    
pay.  The HRC  has interpreted  that language  to mean  that                                                                    
front pay is available but that point could be argued.                                                                          
SENATOR THERRIAULT asked Mr. Nordstrand for that citation.                                                                      
MR. NORDSTRAND pointed to Section 6(a)(1).                                                                                      
SENATOR FRENCH referenced the word  change in Sec. 18.80.100                                                                    
and asked the difference between "practice" and "conduct."                                                                      
MR. NORDSTRAND said  that word change was made  for the sake                                                                    
of consistency.  He believes "practice"  is the  better word                                                                    
because the word  "conduct" could be interpreted  to mean an                                                                    
action. He noted the HRC did not object to that change.                                                                         
SENATOR FRENCH responded that his  "first blush" response is                                                                    
that a  "conduct" is something  a person does once,  while a                                                                    
"practice" is something that is done more than once.                                                                            
8:30 a.m.                                                                                                                       
SENATOR OGAN agreed with Senator French's interpretation.                                                                       
MR. NORDSTRAND maintained that DOL  was making no attempt to                                                                    
change the  scope of what the  HRC or act does;  that change                                                                    
was simply an attempt to use better language.                                                                                   
SENATOR  FRENCH  asked if  the  EEOC  does summary  judgment                                                                    
motions and dismissals.                                                                                                         
MR. NORDSTRAND replied, "Well certainly  the EEOC, when they                                                                    
go to  court, are  subject to  all of  the federal  rules of                                                                    
civil procedure."                                                                                                               
SENATOR FRENCH  asked if  the EEOC has  an in-house  type of                                                                    
system, similar to the HRC.                                                                                                     
MR. NORDSTRAND explained:                                                                                                       
     No,   the  EEOC   itself  doesn't   -  with   rare                                                                         
     exception.  There are  some  very rare  exceptions                                                                         
     that involve  political appointees where  the EEOC                                                                         
     has a hearing officer  system that is then subject                                                                         
     to appeal,  I believe, to the  Circuit Court. It's                                                                         
     an  odd  system  designed to  take  the  political                                                                         
     issues  out of  the  local courts  I think.  Other                                                                         
     than that, they don't  have a commission that sits                                                                         
     like   the   Human   Rights   Commission   as   an                                                                         
     adjudicator that  can award  relief. They  have to                                                                         
     go  downtown to  the courthouse  and so  when they                                                                         
     get  there, they  would have  the full  benefit of                                                                         
     Civil Rule 56 for summary judgment.                                                                                        
CHAIR SEEKINS asked Ms. Fitzpatrick to testify.                                                                                 
MS. LISA  FITZPATRICK, chair  of the  HRC, told  members the                                                                    
HRC consists  of seven individuals.  She noted,  in response                                                                    
to  a  statement  made  by  Mr.  Nordstrand  about  remedies                                                                    
available to the HRC, the  HRC believes that Section 6(a)(1)                                                                    
will  not  provide enough  relief  to  make the  complainant                                                                    
"whole."  The HRC  is involved  in ongoing  discussions with                                                                    
the Governor  about its  concerns and  is hopeful  that they                                                                    
can  agree on  language that  addresses those  concerns. The                                                                    
HRC  believes the  existing  language  is not  comprehensive                                                                    
enough and  would prefer to  use a "catch-all" phrase  or to                                                                    
use an enumerated list of remedies.                                                                                             
CHAIR  SEEKINS  asked  if  the   HRC  has  a  guideline  for                                                                    
appropriate remedies.                                                                                                           
MS. FITZPATRICK  said the  guidelines are  set to  allow the                                                                    
HRC to  provide "whole"  relief. The  HRC has  never awarded                                                                    
any non-economic  damages, however,  if an employee  is ill,                                                                    
loses his job and medical  insurance and incurs huge medical                                                                    
costs, the language  in the bill would prevent  the HRC from                                                                    
requiring  that  individual  to  be  compensated  for  those                                                                    
medical costs.                                                                                                                  
MR. NORDSTRAND  informed members that  DOL met with  the HRC                                                                    
and presented  the bill. The HRC  provided written comments,                                                                    
from which  DOL made  significant changes  to the  bill, for                                                                    
example removal of  a provision that would  allow payment of                                                                    
attorney's fees  to the  prevailing employer.  Other changes                                                                    
were made  in regard to  mitigation of damages  and amending                                                                    
complaints. The HRC asked for  four specific changes and the                                                                    
only change  DOL and the  HRC could  not agree on  was front                                                                    
pay. He said he was unaware  that the HRC met and decided to                                                                    
challenge the remedy section of  the bill. His understanding                                                                    
was that the only issue that  remained was that of front pay                                                                    
and the  HRC's vote  to cap  front pay  at two  years failed                                                                    
with 4 against and 3 in favor.                                                                                                  
CHAIR SEEKINS asked  if the HRC pays all  attorneys fees for                                                                    
the complainant.                                                                                                                
MR. NORDSTRAND said it does.                                                                                                    
CHAIR  SEEKINS  asked if  the  employer  cannot recover  any                                                                    
damages if the employer prevails.                                                                                               
MR. NORDSTRAND  said that is  not specifically  precluded. A                                                                    
provision  at the  end of  the act  says the  HRC can  award                                                                    
attorneys  fees,  however, the  HRC  does  not do  that.  He                                                                    
     In other words, if you  go through a whole hearing                                                                         
     and  at  the end  there's  a  question should  the                                                                         
     commission  award  attorneys' fees,  well  they're                                                                         
     not  going to  award attorneys'  fees. They  could                                                                         
     theoretically seek attorneys'  fees to cover their                                                                         
     costs - I  mean they have a  human rights advocate                                                                         
     who  is  proceeding. I  don't  know  that they  do                                                                         
     that.  And  if they  were  to  award, say  if  the                                                                         
     employer  were to  win the  case,  the only  party                                                                         
     against  whom  they  could award  attorneys'  fees                                                                         
     would be  the commission.  In other  words, they'd                                                                         
     be  awarding fees  against themselves  essentially                                                                         
     because  the control  of  the  case going  through                                                                         
     hearing is  with the executive director.  It's not                                                                         
     with  the individual,  the employee,  per se,  and                                                                         
     they  don't  actually  represent the  employee  in                                                                         
     these  hearings. They  represent their  interests.                                                                         
     So,  there's   power  in  the  statute   to  award                                                                         
     attorneys'  fees  but  they  don't do  it,  so  an                                                                         
     employer gets nothing if they win.                                                                                         
CHAIR SEEKINS  asked if the  case was in court,  the parties                                                                    
would be subject to Rule 82.                                                                                                    
MR. NORDSTRAND said that is  correct. If an attorney brought                                                                    
the case to court and  the employer were to prevail, partial                                                                    
attorneys' fees would be awarded under Rule 82.                                                                                 
CHAIR SEEKINS asked Ms. DeYoung  to address Senator French's                                                                    
concern about the word change from "conduct" to "practice."                                                                     
MS. JAN  DeYOUNG, Assistant Attorney General,  DOL, said her                                                                    
recollection  is that  no one  had a  problem with  the word                                                                    
"conduct,"  but several  phrases  were  used throughout  the                                                                    
bill so  the purpose  was to  provide consistency.  She said                                                                    
she   had  a   particular  concern   with  using   the  word                                                                    
"discrimination"   by    itself   because    only   unlawful                                                                    
discrimination   is   problematic.  Many   differences   are                                                                    
recognized in the law as  valid discrimination. She said her                                                                    
point is that  no one was concerned that  the word "conduct"                                                                    
was bad;  the concern was with  inconsistency throughout the                                                                    
MR. NORDSTRAND  said AS 18.80.110, the  original substantial                                                                    
evidence language, says if  the investigator determines that                                                                    
the allegations  are supported by substantial  evidence, the                                                                    
investigator   shall  immediately   try  to   eliminate  the                                                                    
discrimination.  He explained  that parts  of the  act speak                                                                    
just to discrimination, yet  people act discriminatorily all                                                                    
of the  time and those acts  may or may not  be illegal. DOL                                                                    
was attempting to make the language more precise.                                                                               
SENATOR FRENCH asked,  for the record, if  Mr. Nordstrand is                                                                    
saying it is his belief  that nothing about that word change                                                                    
would prevent a person from  bringing a complaint before the                                                                    
HRC based on a single act.                                                                                                      
MR.  NORDSTRAND  responded,  "Absolutely   not,  that  is  a                                                                    
MS.  FITZPATRICK  clarified,  regarding  the  HRC's  concern                                                                    
about the relief  provision, the HRC did  not pay sufficient                                                                    
attention to  that provision during the  first go-around and                                                                    
did not appreciate the gravity  of it. Upon closer scrutiny,                                                                    
the HRC  realized it will  create a significant  problem and                                                                    
decided  to  meet. The  six  commissioners  present felt  it                                                                    
needed to be addressed.                                                                                                         
CHAIR  SEEKINS asked  if the  HRC  discussed that  provision                                                                    
after it met with DOL.                                                                                                          
MS.  FITZPATRICK  said  it  did.   She  furthered  that  Mr.                                                                    
Nordstrand  was out  of town  at the  time so  she ended  up                                                                    
speaking with Mr. Tibbles about the problem.                                                                                    
CHAIR SEEKINS  announced that with no  further participants,                                                                    
public testimony was closed.                                                                                                    
SENATOR FRENCH asked  Chair Seekins if it was  his intent to                                                                    
move the bill from committee  today or whether he planned to                                                                    
give the two parties time to work on the disputed topic.                                                                        
CHAIR SEEKINS  asked Mr.  Nordstrand if  DOL wished  to have                                                                    
additional time to talk to the HRC.                                                                                             
MR.  NORDSTRAND believed  it was  safe to  say that  DOL has                                                                    
agreed to disagree with the  HRC on that issue. He explained                                                                    
that  the  general concept  is  that  the bill  will  either                                                                    
contain a specific  list of remedies that  identify what can                                                                    
and  cannot  be  done  or it  will  have  open-ended  relief                                                                    
language,  and  that is  precisely  the  issue that  DOL  is                                                                    
trying to solve.   DOL believes that  people who participate                                                                    
in  a   government-funded  process  should   expect  limited                                                                    
remedies  from  that  process.   He  noted  that  unfettered                                                                    
remedies  permit  interesting settlement  negotiations.  For                                                                    
example, he learned in DOL's  discussions with the HRC, that                                                                    
front  pay has  settlement  implications because  it can  be                                                                    
calculated at any number and  be used as a negotiating tool.                                                                    
Any good lawyer would have  an economist try to maximize the                                                                    
front pay number. If the  economist determined the front pay                                                                    
to be $50,000 for 5 years,  another $250,000 would be on the                                                                    
negotiating  table.  DOL  is   saying  that  some  level  of                                                                    
certainty, in  this case one  year of  front pay, is  a fair                                                                    
balance  and  will  create more  certainty  of  outcome  and                                                                    
encourage   settlement.  It   will   also  give   reasonable                                                                    
expectations to  the claimants. He repeated  that DOL simply                                                                    
disagrees that an appropriate list is limiting.                                                                                 
CHAIR SEEKINS  asked, using Ms. Fitzpatrick's  example of an                                                                    
employee who lost  a job with medical  benefits and incurred                                                                    
huge medical  costs, whether an  employer would  be required                                                                    
to pay back pay and the loss of benefits.                                                                                       
MR. NORDSTRAND  said, in general,  part of  the compensation                                                                    
package would be  the benefit package. However,  there is an                                                                    
ongoing debate  about whether the  employer would  be liable                                                                    
for the cost of  insurance versus the consequential damages.                                                                    
DOL falls on  the side of the employer's  benefits being the                                                                    
defining term.  He noted that although  consequential things                                                                    
can happen, many  of those things are  within the employee's                                                                    
control. He  said there are people  who have no job  and not                                                                    
enough  money to  buy medical  insurance  and incur  medical                                                                    
costs. If  those costs  are so  consequential to  that case,                                                                    
for example  if a  catastrophic medical injury  occurs, then                                                                    
the case  should be  in court.  He said  his friends  in the                                                                    
plaintiffs'  employment bar  often monitor  the HRC's  cases                                                                    
and take the good cases to  court. He continued, "There is a                                                                    
limit. Yes.  And in  this case,  we would  not be  funding a                                                                    
million  dollars of  medical costs  that were  uninsured. We                                                                    
would  be  funding,  and our  understanding  would  be,  the                                                                    
benefit cost."                                                                                                                  
CHAIR  SEEKINS  asked  if  the [HRC]  would  be  making  the                                                                    
determination  on  whether  the  practice  that  caused  the                                                                    
person  to lose  his job  was discriminatory  but the  court                                                                    
system would  determine the damages  that resulted  from the                                                                    
lost job  because the HRC is  not the proper venue  for that                                                                    
kind of a claim.                                                                                                                
MR. NORDSTRAND  replied, "Any more than  punitive damages is                                                                    
because  they  don't  have  the  authority  to  award  those                                                                    
SENATOR  FRENCH thought  the HRC  exists because  many cases                                                                    
are for perhaps $5,000 and,  although that amount might be a                                                                    
crushing  amount  for the  plaintiff,  it  is not  worth  an                                                                    
attorney's time.                                                                                                                
MR. NORDSTRAND  said that  is certainly  true and  the small                                                                    
cases are  the business of the  HRC to some degree,  but the                                                                    
director  will be  given  discretion. He  noted  there is  a                                                                    
point  where  one  has  to  consider  whether  the  cost  of                                                                    
litigating  such  a case  is  worth  the  HRC's time  to  go                                                                    
through  the entire  proceeding. He  said the  EEOC is  very                                                                    
good at getting the big  cases where it tackles class action                                                                    
suits  or cases  that will  set things  right for  a lot  of                                                                    
employees. But  the HRC has been  bogged down with a  lot of                                                                    
cases that perhaps  shouldn't go to hearing and  it would be                                                                    
more advantageous  to use its resources  for investigations.                                                                    
He offered that a person  with $5,000 in medical costs could                                                                    
also file a claim in small claims court.                                                                                        
CHAIR  SEEKINS  agreed  that  small  claims  court  is  very                                                                    
effective  and  efficient  but expressed  concern  that  the                                                                    
financial limit for that court is too low.                                                                                      
SENATOR  THERRIAULT  asked if  a  plaintiff  could take  the                                                                    
HRC's determination as fact before the court.                                                                                   
MR.  NORDSTRAND said  that is  an  interesting question.  He                                                                    
     It   would  be   subject  to   review,  like   any                                                                         
     administrative agency finding, but  it would go up                                                                         
     through that  process and, for  example, if  you -                                                                         
     theoretically,   I  haven't   seen  it   done  but                                                                         
     theoretically, if you had a finding here of                                                                                
     discriminatory conduct, you might be able to go                                                                            
     forward in court and seek other remedies too.                                                                              
SENATOR THERRIAULT said a person  without the money to go to                                                                    
court  who  went  through  the HRC  process  first  and  was                                                                    
successful would  be getting  something of  tremendous value                                                                    
without going to court.                                                                                                         
MR.  NORDSTRAND said  DOL discussed  whether  to include  an                                                                    
opt-out provision so that a  person who went through the HRC                                                                    
process would be opting out [of court].                                                                                         
MS. DEYOUNG  stated that provision  was not included  in the                                                                    
TAPE 04-46, SIDE B                                                                                                            
CHAIR SEEKINS said his concern  was that this bill would not                                                                    
give a  person who was collaterally  damaged recourse within                                                                    
the system but his concern has been addressed.                                                                                  
MS.   DEYOUNG   informed    members   that   regarding   the                                                                    
substitution   of  the   word   "practice"  for   "conduct,"                                                                    
discriminatory  practices are  defined in  the human  rights                                                                    
law, which is why the word "practice" was chosen.                                                                               
CHAIR SEEKINS  noted he saw  no reason  to hold the  bill in                                                                    
SENATOR  THERRIAULT   moved  SB  354  from   committee  with                                                                    
individual recommendations and its zero fiscal note.                                                                            
CHAIR SEEKINS  announced that with no  objection, the motion                                                                    
carried. He then announced a 5-minute recess.                                                                                   

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