Smithdra.txt

CIVIL RIGHTS COMMISSION

STATE OF HAWAII


WILLIAM D. HOSHIJO, ) Docket No. 97-009-E-P
Executive Director, on )
behalf of the complaint ) HEARINGS EXAMINER'S
filed by SHAWN M. SMITH, ) FINDINGS OF FACT,
) CONCLUSIONS OF LAW
v. ) AND RECOMMENDED ORDER;
) APPENDIX "A".
TABERU MANAGEMENT, INC. dba )
RB HONOLULU #1, )
)
Respondent. )
_______________________________)



HEARINGS EXAMINER'S FINDINGS OF FACT,
CONCLUSIONS OF LAW AND RECOMMENDED ORDER


I. INTRODUCTION
A. Chronology of Case
The procedural history of this case is set forth in the
attached Appendix A.
B. Summary of the Parties' Contentions
The Executive Director alleges that Respondent Taberu
Management, Inc. (hereinafter "TMI") violated H.R.S.  378-2 and
Hawaii Administrative Rules (H.A.R.)  12-46-106, 12-46-107 and 12-
46-108 when it: 1) refused to reinstate Complainant Shawn M. Smith
to her position as general manager after the completion of her
maternity leave; and 2) terminated Complainant because she was on
maternity leave. The Executive Director also asserts that
Respondent's actions prevented Complainant from being hired by a
successor employer, Arby's Inc., and caused Complainant to suffer
lost wages, benefits and emotional distress.  Respondent TMI contends that: 1) it sold the Windward Mall
franchise on June 22, 1994 and did not own the restaurant on June
27, 1994, the date Complainant was released to return to work;
2) alternatively, even if it owned and operated the Windward Mall
restaurant on and after Complainant's June 27, 1994 return date, it
was barred from making any personnel changes after June 22, 1994
pursuant to a settlement agreement with Arby's Inc.; and 3) it
could not afford to reinstate Complainant.
Having reviewed and considered the evidence and arguments
presented at the hearing together with the entire record of these
proceedings, this Hearings Examiner hereby renders the following
findings of fact, conclusions of law and recommended order.


II. FINDINGS OF FACT[1]
1. The Windward Mall shopping center, located in Kaneohe,
Hawaii, contains an Arby's restaurant. This Arby's restaurant is a
franchise which has been and continues to be licensed by Arby's
Inc., a Delaware corporation, to other entities to operate.
(Ex. 13) [2]

2. In November 1987 Pacific Far East International ("PFEI")
purchased the Arby's Windward Mall franchise and hired Complainant
Smith as a part time crew worker/cashier. In May 1988 PFEI promoted
Complainant to be an assistant manager of the restaurant.
(Affidavit of Shawn M. Smith dated 1/12/98 attached to the Executive
Director's Motion To Amend Complaint filed on 1/13/98; Ex. 16)
3. In December 1988 PFEI sold the franchise to DGH
Properties. DGH Properties continued to employ Complainant as an
assistant manager. (Ex. 16)
4. In April 1990, DGH Properties sold the franchise to
Respondent TMI. Respondent TMI was a Nevada corporation which was
registered to do business in the State of Hawaii. Respondent TMI
continued to employ Complainant as an assistant manager. (Exs. 13,
16)
5. In August 1990 Complainant requested and was granted
maternity leave from Ted McAvoy, TMI Vice President, to give birth
to her first child. While on maternity leave, Complainant received
temporary disability insurance benefits (TDI). At that time
Complainant and her first child were covered by her husband's
medical insurance plan. After her maternity leave was completed,
Respondent TMI reinstated Complainant to her position as assistant
manager in January 1991. In December 1991 Respondent TMI promoted
Complainant to be general manager of the restaurant. (Tr. at 47,
54; Affidavit of S.M. Smith dated 1/12/98; Ex. 1) 6. From November 1988 to May 1996 Complainant's husband,
Paul Smith, was employed as a waste water treatment worker by the
City and County of Honolulu. In 1991 Paul Smith had an allergic
reaction to certain chemicals used at his job, was on disability
leave from 1991-1992 and received workers' compensation benefits and
medical insurance coverage only for himself. Complainant then
obtained medical insurance for herself and her child from TMI. (Tr.
at 54-56, 94-97, 116-117)
7. In December 1993 Complainant informed McAvoy that she was
pregnant with her second child. Complainant requested and was
granted a second maternity leave beginning in March 1994. At that
time Complainant received a salary of $26,400 per year. McAvoy
assigned then assistant manager Nila Abanggan to assume
Complainant's general manager duties. During this maternity leave,
Complainant received TDI benefits and medical insurance coverage
from TMI. She also periodically dropped by the restaurant and
assisted Abanggan with bookkeeping, repairing cash registers and
other management problems. (Tr. at 46-48; Affidavit of S.M. Smith
dated 1/12/98; Exs. 1, 8, 12, 19, 22)
8. McAvoy was also employed by Kanpai, Inc., the licensee of
the Arby's restaurant located at Pearlridge Shopping Center, and was
in charge of personnel matters for that franchise. In early 1994
McAvoy granted maternity leave to Tanya Graham, the general manager
of the Pearlridge Arby's. On or about May 1994 McAvoy reinstated
Graham to her position as general manager after her maternity leave
was completed. (Affidavit of S.M. Smith dated 1/12/98; Ex. 1)
9. During Complainant's maternity leave, Respondent TMI began
to have financial difficulties. As a result, McAvoy laid off two
assistant managers and imposed a 20% pay cut on the remaining
managers. McAvoy and Raymond David, TMI President, also discussed
the possibility of not bringing Complainant back after her maternity
leave. Upon overhearing these discussions, Abanggan, a close friend
of Complainant's, offered to resign as general manager so that
Complainant could return to work. McAvoy and David rejected
Abanggan's offer to resign, stating that since Complainant was
already on maternity leave, it was "easier" to let Complainant go.
(Tr. at 81-82; Ex. 19)
10. Some time during June 1994 Complainant obtained a note
from her doctor releasing her to return to work on June 27, 1994.
Complainant gave this note to Abanggan to forward to McAvoy. A few
days later Complainant called McAvoy, who acknowledged receipt of
the note. McAvoy informed Complainant that TMI was having financial
problems and was imposing a 20% pay cut on all employees. McAvoy
asked Complainant if she was willing to take such a pay cut, and
Complainant answered affirmatively. (Tr. at 48-50; Ex. 1)
11. Some time around June 22, 1994 Respondent TMI decided to
settle a civil action which had been brought by Arby's Inc. against
it and Kanpai, Inc. As part of the settlement, Respondent TMI and
Kanpai Inc. agreed to sell the Windward Mall and Pearlridge
franchises to Arby's Inc. A Hearing To Note Settlement was held on
June 22, 1994 before the Honorable Melvin Soong of the First Circuit
Court. Pursuant to the representations made by the parties at the
hearing, Arby's Inc. was to take over the operations of both
restaurants on July 15, 1994 if it could assume their leases.
Arby's Inc., however, was not able to assume the leases on both
restaurants until July 28, 1994 and the settlement agreement was not
executed until August 13, 1994. (Exs. 5, 14, 15)
12. On June 26, 1994 Complainant telephoned McAvoy to remind
him that she was returning to work the next day. McAvoy told
Complainant that TMI couldn't afford to bring her back and that she
had no position to return to. Complainant was stunned. She asked
McAvoy if she had "done anything wrong". McAvoy stated that the
decision not to bring her back was "nothing personal", but just a
"matter of economics". (Tr. at 32-33, 51, 100-101; Affidavit of
S.M. Smith dated 1/12/98)
13. Complainant was devastated, angry and began to cry. She
couldn't believe that TMI would do this to her, since she had been
a dependable, long time employee. She was also worried about her
family's financial situation. Complainant and her husband had just
purchased a car in January 1994 and a condominium in early February
1994. They had car payments of about $220/month and a mortgage of
about $1,000/month. The Smiths also took out a loan with a credit
union for the down payment on their condominium and had payments of
about $600/month for this loan. In late February 1994 Paul Smith
again become disabled from his job and only received workers'
compensation benefits of about $1,150/month. They also had a new
born child. (Tr. at 29, 33, 51, 57-58, 84, 96-97, 100; Ex. 1)
14. The next day Complainant telephoned David and asked why
McAvoy would not reinstate her, since McAvoy had reinstated Graham
only one month earlier. David told Complainant that it was "just a
matter of timing", that he no longer had control over personnel
matters because the franchise was being sold to Arby's Inc., and
that he could only recommend her to Arby's Inc. (Tr. at 77;
Affidavit of S.M. Smith dated 1/12/98; Ex. 1)
15. Complainant continued to receive TDI and medical insurance
benefits from TMI through June 30, 1994. On that date, Respondent
TMI terminated Complainant. (Exs. 1, 22)
16. On or about July 18, 1994 Complainant went to the Windward
Mall Arby's and spoke with Jerry Podoyak, the Arby's Inc. Operating
Consultant overseeing the transfer of the franchise from TMI.
Complainant informed Podoyak that TMI failed to reinstate her after
her maternity leave and that she wanted to return to work at the
restaurant. Podoyak stated that Arby's Inc. did not have possession
of the restaurant yet and that he could not demote Abanggan and
bring Complainant back as general manager. Complainant stated that
she was willing to work as an assistant manager under Abanggan.
Podoyak stated that after the transfer, he might have a management
position for Complainant, that Arby's Inc. planned to meet with TMI
employees later in the month to discuss employment with Arby's Inc.,
and invited Complainant to that meeting. (Tr. at 71-74, 91-92; Ex.
18)
17. On or about August 10, 1994 Podoyak held a meeting with
TMI employees and informed them that all current employees would be
transferred to Arby's Inc. Also present at the meeting was Patricia
Haught, the Human Resource Manager for Arby's Inc., David and
Complainant. Abanggan passed out employment application forms to
the TMI employees and Complainant. Complainant filled out the forms
and returned them to Haught. Complainant informed Haught that she
had been the general manager of the Windward Mall Arby's and that
TMI failed to reinstate her after her maternity leave. Haught
stated that TMI had to reinstate Complainant before Arby's could
transfer her, questioned the legality of TMI's actions, and
suggested that Complainant "seek some legal advice". (Tr. at 8-9,
12-13, 74-76; Exs. 17, 18)
18. A few days after this meeting, Complainant called Podoyak
and asked if Arby's Inc. had a management position for her. Podoyak
stated that he had contacted the Arby's Inc. corporate office, which
stated that it did not have an open management position and could
not afford to create one for her. (Tr. at 78-79, 89-92)
19. On or about August 14, 1994 Respondent TMI terminated all
its employees and ceased its operation of the Windward Mall
restaurant. On August or about 15, 1994 Arby's Inc. began operating
the Windward Mall restaurant with the ex-TMI employees who had been
terminated the prior day. Abanggan was retained as general manager.
(Tr. at 9, 11-12, 83; Exs. 14, 15, 19)
20. Complainant paid TMI $400 to continue the medical
insurance for herself and her two children through the month of July
1994. From August 1, 1994 through October 31, 1994 Complainant and
her two children had no medical insurance and Complainant had to
utilize free clinics for her new born daughter's check ups and
immunizations. She applied for and was accepted into the state's
MedQuest program in November 1994. (Tr. at 62-64, 109-110, 116-117;
Ex. 1)
21. Complainant was unemployed from July 1, 1994 through April
14, 1995. She applied for and received unemployment insurance
benefits of $337/week or about $1,460/month from July 1, 1994
through December 31, 1994. (Exs. 6, 7, 9, 10, 11, 12, 21)
22. Complainant unsuccessfully applied for numerous
management, banking and clerical positions during this 9.5 month
period. Some time around July 1994, Complainant asked McAvoy to
write a letter of recommendation on her behalf. McAvoy stated he
would not write such a letter unless Complainant signed a "hold
harmless" form. Complainant inquired about signing such a form with
the State of Hawaii Department of Labor and Industrial Relations
(DLIR). DLIR advised Complainant not to sign such a form and
Complainant was therefore not able to obtain a letter of
recommendation from TMI. (Tr. at 39-40, 64-71, 79-80, 106-107; Ex.
20)
23. During her unemployment, Complainant became stressed,
depressed and withdrawn. She fell behind in her maintenance fee
payments and incurred penalties. To pay some of her loans and make
ends meet, she borrowed money from her parents, her grandmother and
her in-laws. From August through October 1994 she felt insecure and
stressed about not having health insurance for her new born infant,
her young daughter and herself. After her unemployment insurance
benefits ran out, Complainant became desperate and applied for
welfare and received food stamps. From January through March 1995
Complainant defaulted on her mortgage payments and would have had
her home foreclosed if her grandmother had not made the payments for
her. Complainant had been a very stable, mature, responsible, take
charge, independent person who was proud of her ability to advance
herself and take care of her family. During her unemployment, she
lost her self-esteem and felt ashamed about her inability to secure
another management-level job, having to ask her family and in-laws
for money and applying for welfare. She stopped speaking to her
family and socializing with her friends. (Tr. at 26-31, 34-39, 52-
53, 59-61, 84-88, 98-99, 101-106, 110-116)
24. On or about April 15, 1995 Complainant was hired by
Mahalo Air Lines as a revenue accountant at a salary of $8.00/hour
or about $1,386/month. On or about September 14, 1995 Complainant
was laid off from this position. (Tr. at 61, 67-69, 118)
25. In October 1995 Arby's Inc. sold the Windward Mall and
Pearlridge franchises to Clover International, Inc. ("CII"). CII
was owned by Oak Nam, who formerly owned PFEI and originally hired
Complainant in 1987. In October 1995 CII hired Complainant as
general manager of the Arby's Windward Mall restaurant at a salary
of $28,000/year. On January 1, 1996 Complainant received a salary
increase to $30,000/year. Complainant is presently employed by CII
as the regional manager of the Arby's Windward Mall, Pearlridge and
Waipahu restaurants at a salary of $35,000/year. (Tr. at 54, 69,
117-118; Ex. 16)
26. On January 1, 1995 David sold Respondent TMI to Gale A.
Kelley and John H. McKevitt. On October 17, 1997 the Department of
Commerce and Consumer Affairs cancelled Respondent TMI's
registration to conduct business in the State of Hawaii. On
December 15, 1997 the Secretary of the State of Nevada revoked TMI's
status as a Nevada corporation. (Exs. B, J, K and L attached to
Executive Director's Motion To Amend Complaint filed on 1/13/98)


III. CONCLUSIONS OF LAW[3]


A. Jurisdiction
During Complainant's employment with TMI, Respondent TMI was a
corporation with one or more employees. It is therefore an employer
under H.R.S.  387-1 and is subject to the provisions of H.R.S.
Chapter 378.


B. Pregnancy Discrimination
Under H.R.S.  378-2(1)(A), an employer may not bar, discharge
or otherwise discriminate against an individual because of sex. The
term "because of sex" includes because of pregnancy, childbirth or
related medical conditions. H.R.S.  378-1.
Under H.A.R.  12-46-107(b) an employer may not discharge an
employee because she requires time away from work for disabilities
due to or resulting from pregnancy, childbirth or related medical
conditions. Under H.A.R.  12-46-108, such disabled employee is
entitled to leave, with or without pay, for a reasonable period of
time. In addition,  12-46-108(c) requires employers to reinstate
such employees to their original jobs or to positions of comparable
status and pay, without loss of accumulated service credits and
privileges. See also, In Re Shaw / Sam Teague, Ltd. et. al., Docket
No. 94-001-E-P (March 3, 1995)
The weight of the evidence in this case shows that Respondent
TMI refused to reinstate Complainant after the completion of her
second maternity leave. It also terminated Complainant because she
was on maternity leave.
Respondent TMI claims it could not reinstate Complainant
because: 1) it sold the Windward Mall franchise on June 22, 1994
and did not own the restaurant on June 27, 1994, the date
Complainant was released to return to work; 2) alternatively, even
if it owned and operated the Windward Mall restaurant on and after
Complainant's June 27, 1994 return date, it was barred from making
any personnel changes after June 22, 1994 pursuant to the settlement
agreement with Arby's Inc.; and 3) it could not afford to
reinstate Complainant.
These arguments are unsupported by the record. While a
settlement agreement was noted at a June 22, 1994 hearing, it was
not executed and the sale of the Windward Mall franchise did not
close until August 13, 1994. (Ex. 14) Until that date, Respondent
TMI still owned and operated the restaurant. (Ex. 15) In addition,
the June 22, 1994 hearing transcript and settlement agreement are
silent as to the status of TMI employees. (Exs. 14, 15) A letter
dated June 24, 1994 from David to Podoyak recites that Arby's Inc.
instructed TMI not to alter its present "employment status". (Ex. 3)
However, on that date Complainant was still on TMI's payroll as an
employee and was receiving TDI and medical benefits. Respondent TMI
was therefore not barred by the settlement from reinstating
Complainant. Finally, although Respondent TMI laid off two
assistant managers during Complainant's maternity leave, it did not
eliminate the general manger position and did not lay off Abanggan,
who had filled that position. Furthermore, it knew Complainant was
willing to take a pay cut and rejected Abanggan's offer to resign so
that Complainant could be reinstated. Therefore, TMI could have
reinstated Complainant to her general manager position on June 27,
1994. Finally, the record shows that the real reason why TMI did
not reinstate Complainant was because McAvoy and David felt it was
"easier" to let Complainant go because "she was already on leave".
(Ex. 19)



C. Liability
Because Respondent TMI refused to reinstate Complainant to her
general manager position after her maternity leave and terminated
Complainant because she was on leave, I conclude that it is liable
for violating H.R.S.  378-2 and H.A.R.  12-46-107
and -108. [4]

D. Remedies
1. Back Pay
Back pay encompasses the amount Complainant would have earned
if she had been reinstated by Respondent TMI. Respondent has the
burden to prove any offsets to Complainant's expected earnings,
including the failure to mitigate damages by seeking comparable
employment. In Re Shaw, supra; Sias v. City Demonstration Agency,
588 F.2d 692, 18 EPD 8773 at 5141 (9th Cir. 1978). Back pay may
also include expenses Complainant incurred because of Respondent's
discriminatory acts. 5 Larson Employment Discrimination, 2nd Ed.
92.07 (1998); Marcing v. Fluor Daniel, Inc., 826 F. Supp 1128, 62
BNA 1129 (N,.D. Ill. 1993), rev'd in part on other grounds, 66 BNA
1120 (7th Cir. 1994) (backpay award can include $7,179 penalty
plaintiff incurred when she was forced to make early withdrawals
from her retirement savings after her discriminatory discharge).
a. lost income
Complainant was unemployed from July 1, 1994 to April 14, 1995.
Respondent argues that its liability for back pay should end on
August 14, 1994, the date it terminated all TMI employees and ceased
its operation of the Windward Mall restaurant. However, the record
shows that if TMI had reinstated Complainant as general manager on
June 27, 1994, Arby's Inc. would have transferred and continued to
employ Complainant as general manager after August 14, 1994.
Therefore, Complainant's back pay need not be terminated at the date
of the restaurant's sale. See, Gaddy v. Abex Corp., 884 F.2d 312,
51 EPD 39,335 at 59,323 (7th Cir. 1989) (plaintiff's back pay not
terminated as of date plant sold because record showed that
plaintiff would have been retained by successor employer if she had
not been discriminatorily laid off); Weaver v. Casa Gallardo, Inc.,
922 F.2d 1515, 55 EPD 40,540 at 65,805 (11th Cir. 1991), superseded
in part on other grounds by statute, (defendant's back pay liability
not severed on the date it sold its restaurant to another
corporation because record showed that if plaintiff had not be
discriminatorily denied promotion, he would have been transferred to
and employed by successor corporation). I therefore determine that
Respondent should be ordered to pay Complainant her salary for the
period between July 1, 1994 and April 14, 1995 This computes to
$2,200/month x 9.5 months = $20,900.
In addition, Respondent should pay the difference between what
Complainant would have earned had she been reinstated as general
manager and what she earned with Mahalo Air Lines between April 15,
1995 and September 30, 1995. This computes to ($2,200/month x 5.5
months = $12,100) - ($1,386/month x 5 months = $6,930) = $5,170.
The amount of Complainant's total lost income is therefore $26,070.
The Executive Director also claims that Complainant should
receive the salary difference for the three month period between
October 1, 1995 and January 1, 1996 when she began employment with
CII. The record, however, shows that Complainant received a salary
of $2,200/month or $26,400/year from TMI before she was terminated.
(Ex. 12). It also shows that CII paid Complainant a higher salary
of $28,000/year when it hired her in October 1995. Therefore, I
decline to award Complainant back pay for the period commencing
October 1, 1995.
b. expenses
The record shows that Complainant incurred expenses of $400 for
medical insurance during the month of July 1994 and $968.94 in late
maintenance fee payment penalties as a result of TMI's
discriminatory conduct. (See Exs. A - D attached to the Executive
Director's Post Hearing Memorandum filed on 6/5/98) She should also
be awarded $1,368.94 backpay for such expenses. Thus, Complainant's
total backpay award is $27,438.94.


2. Compensatory Damages
The Executive Director requests that Respondent be ordered to
pay Complainant compensatory damages of $75,000 for the emotional
distress she suffered. The Executive Director must demonstrate the
extent and nature of the resultant injury and Respondents must
demonstrate any bar or mitigation to this remedy.
The evidence shows that Complainant suffered significant
emotional distress after McAvoy informed her that she would not be
reinstated and during the 9.5 months she was unemployed.
Complainant testified that she was stunned and devastated after her
June 26, 1994 discussion with McAvoy. Prior to that, Complainant
had no clue that TMI planned to terminate her. Complainant became
angry, upset and began to cry. Paul Smith and Bambi Abalos
(Complainant's mother) observed Complainant sobbing and unable to
speak after this phone call.
During her 9.5 months of unemployment Complainant became
stressed, depressed and withdrawn. She and her family were under
great financial strain because they had just purchased a new home,
had several outstanding loans and Paul Smith was on disability
leave. Paul Smith and Abalos testified that Complainant lost her
self esteem, withdrew, stopped talking to them and other family
members, and stopped socializing with her friends. After her
unemployment insurance benefits ran out, Complainant became
desperate. Prior to this, Complainant had been a very stable,
mature, responsible, take charge, independent person who was proud
of her ability to advance herself and take care of her family.
The Executive Director also contends that as a result of her
unemployment and lower salary from Mahalo Air Lines, Complainant
missed several credit union loan payments, could not make up these
payments, had to file for personal bankruptcy in June 1997, and
therefore suffered additional emotional distress. However, the
evidence in the record is insufficient to show that Complainant's
unemployment caused her personal bankruptcy almost two years later.
Specifically, the Executive Director did not present details as to
the amount of missed payments and Complainant's other financial
circumstances during this period. Such evidence is necessary given
that: a) the Smith's income during most of Complainant's
unemployment and her employment with Mahalo (June to December 1994 -
approximately $2,610/month; March to September 1995 - approximately
$2,536/month) exceeded their loan payments (approximately
$1,800/month); b) Complainant was employed by CII at a higher
salary by October 1995; and c) Mr. Smith was also fully employed by
June 1996.
Considering these circumstances, I determine that $60,000 is
appropriate compensation for the injury to Complainant's feelings,
emotions and mental well-being caused by Respondent TMI's
discriminatory conduct.


3. Punitive Damages
The Executive Director seeks an award of $25,000 in punitive
damages against Respondent TMI. H.R.S.  368-17 authorizes this
Commission to award punitive damages. Punitive damages are assessed
in addition to compensatory damages to punish a respondent for
aggravated or outrageous misconduct, and to deter the respondent and
others from similar conduct in the future. Tseu/Gould v. Dr. Robert
Simich, et. al., Docket No. 95-012-E-SH (October 29, 1996);
Tseu/Collins v. Cederquist, Inc. et. al., Docket No. 95-001-E-R-S
(June 29, 1996); Masaki v. General Motors Corp., 71 haw. 1, 6
(1989). Since its purposes are punishment and deterrence, punitive
damages are awarded only when a respondent's wrongdoing has been
intentional and deliberate, and has the character of outrage
frequently associated with crime. Id. The Executive Director is
required to show, by clear and convincing evidence, that respondent
acted wantonly, oppressively or with such malice as implies a spirit
of mischief or criminal indifference to civil obligations, or where
there has been some wilful misconduct or entire want or care which
would raise the presumption of a conscious indifference to
consequences. Id.
I conclude that the Executive Director has not met this burden.
While the record shows that McAvoy and David felt that it was
economically and logistically easier to terminate Complainant than
to terminate Abanggan and reinstate Complainant (given TMI's poor
financial situation and the franchise's imminent sale) the Executive
Director did not show by clear and convincing evidence that they
intentionally or deliberately violated Complainant's reinstatement
rights under H.A.R.  12-46-108. No evidence was presented to show:
1) that McAvoy and David were aware of such rights; 2) that McAvoy
and David knew of Complainant's financial situation (i.e., purchase
of a new home, husband's disability); or 3) the type of "hold
harmless" form McAvoy asked Complainant to sign and for what
purpose. For these reasons, I decline to award punitive damages.


4. Equitable Relief
Finally, the Executive Director asks that the Commission order
Respondent to:
a) immediately cease and desist from further discriminatory
practices on the basis of sex due to pregnancy;

b) develop and implement a written non-discrimination policy
based on sex due to pregnancy and offer training to TMI
management and employees on such policy;

c) post notices published by the Commission regarding
compliance with discrimination laws in conspicuous places
on TMI premises;

d) publish the results of this contested case hearing in a
newspaper published in the state and having general
circulation in Honolulu, Hawaii.
Because Respondent TMI is no longer registered to do business
in the State of Hawaii, I recommend that the Commission award such
affirmative relief only if it returns to conduct business in Hawaii.

IV. RECOMMENDED ORDER
Based on the matters set forth above, I recommend that the
Commission find and conclude that Respondent TMI violated H.R.S.
 378-2 and H.A.R.  12-46-107 and 12-46-108 when it refused to
reinstate Complainant as general manager of the Windward Mall Arby's
restaurant after her maternity leave and terminated her because she
was on maternity leave.
For the violations found above, I recommend that pursuant to
H.R.S.  368-17, the Commission should order:
1. Respondent TMI to pay Complainant back pay in the amount
of $27,438.94.
2. Respondent TMI to pay Complainant $60,000 as damages in
compensation for her emotional injuries.
3. Respondent TMI to:
a) immediately cease and desist from further
discriminatory practices on the basis of sex due to
pregnancy;

b) develop and implement a written non-discrimination
policy based on sex due to pregnancy and offer
training to TMI management and employees on such
policy; c) post notices published by the Commission regarding
compliance with discrimination laws in conspicuous
places on TMI premises;

d) publish the results of this contested case hearing
in a newspaper published in the state and having
general circulation in Honolulu, Hawaii
should it return to conduct business in the State of Hawaii.


Dated: Honolulu, Hawaii, June 26, 1998.

HAWAII CIVIL RIGHTS COMMISSION




/s/____________________________
LIVIA WANG
Hearings Examiner


Copies sent to:

Paul F.N. Lucas, Esq. HCRC Enforcement Attorney
Gale A. Kelley, President, Respondent TMI

Proposed Decision (June 26, 1998) APPENDIX A


On October 7, 1994 Complainant Shawn M. Smith filed a complaint
with this Commission alleging that her former employer, Respondent
Taberu Management, Inc. (hereinafter "TMI"). discriminated against
her on the basis of her sex by failing to reinstate her after the
completion of her maternity leave. Smith amended the complaint on
December 15, 1994 to include Arby's Inc. as a Respondent.
On December 1, 1997 the complaint was docketed for hearing and
a Notice Of Docketing Of Complaint was issued.
The Executive Director filed its Scheduling Conference
Statement on December 10, 1997. On December 17, 1997, Raymond G.
David, former President of TMI, filed a Scheduling Conference
Statement on behalf of Respondent TMI. Respondent Arby's Inc. filed
its Scheduling Conference Statement on December 18, 1997.
A scheduling conference was held on December 22, 1997 and the
Scheduling Conference Order was issued that day.
By letter dated January 8, 1998, David informed the parties and
this Hearings Examiner that TMI was sold on December 31, 1994 and
that he was no longer an officer or representative of Respondent
TMI. On January 13, 1998 the Executive Director filed a motion to
amend complaint to add David as a Respondent. On January 30, 1998
Respondent Arby's filed a statement in support of the motion, and on
David filed a memorandum in opposition. On February 5, 1998 the
Executive Director filed a reply to David's
- i -memorandum in opposition. A hearing on the motion was held on
February 9, 1998 before this Hearings Examiner. In attendance were:
Enforcement Attorney Paul F.N. Lucas on behalf of the Executive
Director; Richard K. Griffith, Esq. on behalf of David; and Alan
Van Etten, Esq. on behalf of Respondent Arby's Inc. At the hearing
the Hearings Examiner orally denied the motion to amend and issued
a written order on February 13, 1998.
On February 27, 1998 the Executive Director filed a petition
for declaratory relief with the Commission seeking a declaration as
to whether the Hearings Examiner correctly applied H.A.R.  12-46-
6.1 in denying its motion to amend. On March 13, 1998 David filed
a memorandum in opposition to the petition. On April 14, 1998 the
Commission issued an order summarily denying the petition for
declaratory relief.
On March 30, 1998 the Executive Director filed an ex parte
motion to dismiss complaint against Respondent Arby's Inc. on the
grounds that it had reached a settlement agreement with this
respondent. On that day, this Hearings Examiner issued an order
granting the motion to dismiss.
On April 20, 1998 notices of hearing and pre-hearing conference
were issued and were sent by certified mail to Gale
A. Kelley, President of Respondent TMI at his or her last known
address. On or about April 24, 1998, the notices sent to Gale A.
Kelley were returned stamped "attempted delivery - address unknown".
Pursuant to H.R.S.  91-9.5 notices of hearing were
- ii -published in the Honolulu Sunday Advertiser on May 3 and 10, 1998.
On May 7, 1998 the Executive Director filed its pre-hearing
conference statement. On May 14, 1998 a pre-hearing conference was
held.
Pursuant to H.R.S. Chapters 91 and 368, the contested case
hearing on this matter was held on May 26, 28 and 29 1998 at the
Hawaii Civil Rights Commission conference room, 830 Punchbowl
Street, room 411, Honolulu, Hawaii before the undersigned Hearings
Examiner. The Executive Director was represented by Enforcement
Attorney F.N. Lucas. Complainant Smith was present during portions
of the hearing. A representative for Respondent TMI did not appear
at the hearing.
On June 5, 1998 the Executive Director filed its post-hearing
brief.

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footnotes:

1. To the extend that the following findings of fact also
contain conclusions of law, they shall be deemed incorporated into
the conclusions of law.

2. Unless otherwise indicated, "Tr." preceding a page number
refers to the transcript of the contested case hearing held on May
26, 28 and 29, 1998; "Ex." followed by a number refers to the
exhibits submitted by the Executive Director.

3. To the extent that the following conclusions of law also
contain findings of fact, they shall be deemed incorporated into the
findings of fact.

4. Because the Executive Director has reached a settlement
agreement with Arby's Inc. and dismissed it as a party respondent
from this case, I do not determine whether Arby's Inc. is jointly
and severally liable for such discriminatory acts as a successor
employer.








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