Ross v. STOUFFER HOTEL CO.(HAWAII) , 72 Haw. 350 ( 1991 )

OPINION OF THE COURT BY

PADGETT, J.

This is an appeal from a summary judgment entered in the Fifth Circuit Court. We vacate the judgment and remand for further proceedings.

On May 27,1986, Amfac Hotels adopted a policy which read in part:

Effective May 1,1986, the Waiohai/Poipu Beach Hotel’s policy with regard to the hiring of relatives is revised as follows:

3. Two direct relatives* will not work in the same department together. If they marry after being employed here, one of the two will be asked to transfer or resign.

*Direct relative defined as spouse. . ..

On August 1,1986, appellant Harvey Ross was hired as a massage therapist. Viviana Treffry was employed as the principal massage therapist at the Waiohai Hotel. At the time of his hire, appellant and Treffry had been cohabiting for two years and they married eleven days after he was hired. According to the affidavit of Wade Lord, he, Lord, was the manager of the fitness spa, directly supervised appellant and his wife, knew that they had cohabited, and knew of their marriage even before it took place.

A little over a year later, on August 24,1987, Stouffer Hotels acquired the hotel and, on October 16, 1987, made a decision to enforce the no-spouse rule against appellant.

The rule allowed either party to transfer out of the department but they declined to do so. Appellant was therefore terminated. Appellant brings this action claiming that his termination violated HRS § 378-2, which provides in pertinent part:

It shall be an unlawful discriminatory practice:

(1) For an employer to refuse to hire or employ or to bar or discharge from employment, or otherwise to discriminate against any individual in compensation or in the terms, conditions, or privileges of employment because of race, sex, age, religion, color, ancestry, physical handicap, marital status, or arrest and court record[.]

Appellant argues that he was terminated because of his marital status. Appellees argue that he was not terminated because of his marital status but because of whom he married.

There is some indication in the record that because appellant’s wife was his superior, she had a duty under the pertinent statutes and regulations governing massage to report any infractions of the statutes and regulations by appellant, and that appellees were concerned with the inherent possibility of conflict in that situation. On the other hand, there is some indication in the record that appellant’s wife offered to step down from her supervisory position in order to meet that concern.

We are here dealing with the specific sentence of paragraph 3 of the policy which reads, “[i]f they marry after being employed here, one of the two will be asked to transfer or resign.” In our view, it is the fact of marriage which caused the termination. Apparently continued cohabitation without going through a marriage ceremony would not have been a violation of the policy.

Appellant and appellees have characterized the policy as a “no nepotism” rule. That however is a mischaracterization. Nepotism is defined in Black’S Law Dictionary 1039 (6th ed. 1990) as:

Bestowal of patronage by public officers in appointing others to positions by reason of blood or marital relationship to appointing authority.

In Webster’s Third New International Dictionary 1518 (1986), nepotism is defined as:

favoritism shown to nephews and other relatives (as by giving them positions because of their relationship rather than on their merits)[.]

The word itself derives from the Latin word “nepos,” meaning grandson or nephew, and thus clearly deals with hiring someone because of that person’s relationship to the hirer. Nothing of that sort is involved in this policy.

Our statute, HRS § 378-2 is not unique. Many other states have similar, or identical, statutory provisions and litigation over the meaning of the term “marital status” as used in such statutes has resulted, with a marked split among the courts passing on whether a discriminatory policy such as that with which we are faced violates the statute.

New Jersey (Thomson v. Sanborn’s Motor Express, Inc., 154 N.J. Super. 555, 382 A.2d 53 (1977)), New York (Manhattan Pizza Hut, Inc. v. New York State Human Rights Appeal Board, 51 N.Y.2d 506, 415 N.E.2d 950 (1980), and Michigan (Miller v. C.A. Muer Corp., 420 Mich. 355, 362 N.W.2d 650 (1984), and Whirlpool Corp. v. Michigan Civil Rights Commission, 425 Mich. 527, 390 N.W.2d 625 (1986)), have all adopted the view that such policies, as the one under which appellant was terminated, do not violate the prohibition against discrimination because of marital status. Basically their reasoning is that the termination was not because of the person’s marital status but because of whom the person married.

On the other hand, Washington (Washington Water Power Co. v. Washington State Human Rights Commission, 91 Wash. 2d 62, 586 P.2d 1149 (1978)), Minnesota (Kraft, Inc. v. State, 284 N.W.2d 386 (Minn. 1979)), and Montana (Thompson v. Board of Trustees, 192 Mont. 266, 627 P.2d 1229 (1981)), have held that such policies violate the statutory provisions, reasoning that it is the marital status which causes the termination, or the refusal to hire, since by not entering into the marital relationship, or by obtaining a divorce, the disqualification would be removed, and the policy inapplicable.

In the Michigan case which dealt with a policy prohibiting marital relationships among employees, the Michigan court divided four to three. In the New York case, there was a dissent, and, in the Montana case, there was also a dissent. Thus, it is clear from the opinions of courts of other states, as it is clear from the fact that there is a dissent to this opinion, that this is a question on which reasonable minds may differ.

The problem raised by the conflict between company policies prohibiting married persons from working for the same company, or in the same department, or in a supervisor/supervisee relationship, has also been the subject of scholarly comment. See Wexler, Husbands and Wives: An Uneasy Case for Antinepotism Rules, 62 B.U.L. Rev. 75, 125-39 (1982); Note, Challenging No-Spouse Employment Policies as Marital Status Discrimination: A Balancing Approach, 33 Wayne L. Rev. 1111 (1987). Those two studies, in substance, adopt the position of the Washington and Minnesota courts that a flat out prohibition against employees being married, such as is the case of the policy we are here dealing with, violates the prohibition against discrimination by reason of marital status. However, where an employer can show that the marital status of the employees has a relationship to the statutory exception for bona fide occupational qualifications, then a refusal to hire, or a termination, can be upheld.

The public policy argument behind encouraging marital relationships, enunciated in those opinions and comments seems to us persuasive as applied to the facts of this case. Appellant and his wife are licensed masseurs residing on the island of Kauai. Given the smallness of the community, obviously their opportunity to pursue their licensed occupation is limited. The employer’s invocation of the policy a year after they had entered into a marital relationship left them with a Hobson’s choice of one of them either giving up his or her employment, or their seeking a divorce, and continuing to live together and being employed in their chosen occupation. We hold the statute in question prohibits forcing a married couple to make such a choice, absent some statutory exception to the rule.

William Tagupa (Elizabeth J. Fujiwara and Ronald T. Fujiwara co-counsel of record) for appellant. Perry Confalone (Robert S. Katz with him on the brief; Torkildson, Katz, Jossem, Fonseca, Jaffe & Moore) for appellees.

We conclude that as a matter of law, the policy in question of terminating persons who marry other persons working in the same department violates HRS § 378-2 unless the termination falls within one of the exceptions in HRS § 378-3. On the record in this case, we are not satisfied that the appellees have established that their policy falls within one of those exceptions, and accordingly, we vacate the judgment and remand the case for further proceedings consistent herewith.

Vacated and remanded.