Magula v. Benton Franklin Title Co. , 131 Wash. 2d 171 ( 1997 )

Talmadge, J.

Kathryn Maguía was discharged after 14 years of employment because of the alleged misconduct of her spouse, an independent contractor for the same firm. Although RCW 49.60.020 proscribes discrimination based on marital status and RCW 49.60.180 declares marital status discrimination to be an unfair practice, a definition of "marital status” did not appear in our Law Against Discrimination at the time of the events in this case. Maguía contends marital status discrimination includes action against an employee based on the conduct of that employee’s spouse. Magula’s employer contends marital status discrimination is confined to action based on the institution of marriage itself.

In this case, we hold marital status discrimination may pertain to situations where the identity and conduct of the employee’s spouse are involved. We affirm the Court of Appeals and remand this case to the Benton County Superior Court for further proceedings.

ISSUES

1. Where an employee is discharged for reasons unrelated to the employee’s performance and because of the alleged conduct of the employee’s spouse, does such a discharge constitute marital status discrimination?

2. Did the trial court properly grant Benton Franklin Title Insurance Company’s (BFT) motion for summary judgment?

FACTS

BFT hired Kathryn Maguía in 1978. By 1991, she had become the head of the firm’s escrow department. During this period, her husband, Pat Maguía, provided janitorial services for BFT as an independent contractor.

In the fall of 1991, Kathryn Maguía perceived tension in the office and the animosity of fellow employees. On November 20, 1991, she took escrow department employee Linda Hendler out to lunch and asked why their relationship was so tense and strained. Hendler told Kathryn it was the Maguías’ fault another employee had been fired the month before and that Pat Maguía was having or had had affairs with several women at the office. She also stated other employees thought he "did not live life by the rules.” Clerk’s Papers at 456. Kathryn was greatly distressed by this conversation, which she reported to her supervisor, BFT manager Greg Bowers. Bowers began to keep a diary of office events.

The next day, Hendler informed Bowers Pat Maguía had made a threatening phone call to her, and had followed her and her daughter to school. Hendler’s ex-husband, Jeff, told Bowers he was concerned for the safety of Linda and their children. Linda Hendler obtained a restraining order against Pat Maguía.

Kathryn Maguía admitted in her deposition there was animosity in the office during this period. She indicated the conversation with Hendler made their already strained relationship even worse. Bowers testified the conflict between Linda and Kathryn adversely affected their performance in the escrow department, although he did not record any specific incidents of Kathryn’s negative office performance in his diary. Bowers told Kathryn, Linda, and Pat the situation was no-win for all concerned, and was adversely affecting BFT. He told them unless everyone could rise above the interpersonal conflict and work together, he would dismiss all parties involved. To ensure compliance with the restraining order Hendler had obtained against Pat Maguía, Bowers also told Pat not to come to BFT any more.

On December 9, 1991, Hendler reported to Bowers she was upset and unable to work because Pat Maguía had telephoned her and made obscene suggestions. She also said her friends had seen comments freshly written on several men’s restroom walls in clubs in the area stating she had HIV. Hendler attributed the graffiti to Pat Maguía.

Bowers believed this news was a "crushing blow” to the possibility Kathryn and Linda could work together. Clerk’s Papers at 431. On December 10, he met with Pat Maguía and said he "would not judge who is right or wrong” in the accusations, but he terminated BFT’s contract with Pat. Id. at 62. Bowers met separately with Kathryn and Linda and terminated their employment because he did not think they could work together.

Kathryn sued BFT, asserting BFT breached express and implied promises of employment, committed the tort of outrageous conduct, or wrongfully discharged her in violation of public policy as set forth in RCW 49.60, including marital status discrimination under RCW 49.60.180. BFT moved for summary judgment, arguing its action did not involve marital status discrimination because the discharge did not turn on Kathryn’s marriage or the identity of her spouse. However, BFT did not address the issue of whether Magula’s discharge was a "business necessity” within the meaning of WAC 162-16-150. Kathryn argued marital status discrimination includes being discharged for the misconduct of a spouse, and admitted Pat Maguía had engaged in misconduct. Report of Proceedings at 9-15.

The trial court granted summary judgment for BFT on all claims, stating firing someone because of the conduct of the spouse was not marital status discrimination. On appeal, the Court of Appeals, Division Three, affirmed the trial court’s rulings on all other claims, but reversed and remanded as to the marital status discrimination claim, stating the evidence created an issue as to whether Ms. Maguía was terminated based on her spouse’s conduct:

The record discloses that the circumstances surrounding termination of Ms. Magula’s employment related to allegations of misconduct by her husband. There are no allegations of misconduct by Ms. Maguía. The evidence creates a genuine issue of fact whether Ms. Maguía was discriminated against based on who her spouse was, his conduct or what he did.

Magula v. Benton Franklin Title Ins. Co., 79 Wn. App. 1, 4, 901 P.2d 313 (1995). We granted review.¹

ANALYSIS

A. Marital Status

A prima facie case of marital status discrimination requires a plaintiff to prove "(1) that the employer discriminated against her based on her marital status and (2) that this discrimination was not justified or excused by 'business necessity’.” Kastanis v. Educational Employees Credit Union, 122 Wn.2d 483, 493, 859 P.2d 26, 865 P.2d 507 (1993). Marital status must be a substantial factor in the employer’s adverse employment decision. Mackay v. Acorn Custom Cabinetry, Inc., 127 Wn.2d 302, 310, 898 P.2d 284 (1995). The parties have focused solely on the definition of "marital status;” Maguía has not addressed, nor has BFT argued at this point in the case, whether Magula’s termination was a "business necessity.”²

It is unlawful for any employer to discharge a person from employment "because of . . . marital status.” RCW 49.60.180. See also RCW 49.60.010, .020. The Legislature added marital status to the list of protected attributes in RCW 49.60 in 1973, but provided no definition of the term "marital status.” Laws of 1973, ch. 141, § 10. In 1993, the Legislature defined "marital status,” as "the legal status of being married, single, separated, divorced, or widowed.” Laws of 1993, ch. 510, § 4.

Prior to 1993, Washington law employed a broad definition of "marital status” under RCW 49.60. Although RCW 49.60 did not define "marital status,” the Human Rights Commission promulgated WAC 162-16-150 in 1975, defining marital status discrimination. WAC 162-16-150(2) specifically provides:

In general, discrimination against an employee or applicant for employment because of (a) what a person’s marital status is; (b) who his or her spouse is; or (c) what the spouse does, is an unfair practice because the action is based on the person’s marital status.

(Emphasis added.) Generally, administrative agency interpretations of statutes are given great weight. Doe v. Boeing Co., 121 Wn.2d 8, 15, 846 P.2d 531 (1993) (RCW 49.60 does not define "handicap;” deference is given by court to Human Rights Commission administrative rule defining "handicap”).

Subsequent court decisions essentially adopted the view of the Human Rights Commission that marital status under RCW 49.60 involves conduct beyond the mere legal status of being married or single, and may include discrimination based on the status of being married or single and conduct of the employee’s spouse. We held an antinepotism policy could constitute marital status discrimination and specifically approved the interpretation of "marital status” adopted by the Human Rights Commission in WAC 162-16-150 in Washington Water Power Co. v. Human Rights Comm’n, 91 Wn.2d 62, 69, 586 P.2d 1149 (1978):

We think the commission was justified in its interpretation of the policy and purpose of the act, when it concluded that the legislature did not intend to restrict its coverage to cases where the employer refuses to hire any married person — or any unmarried person. The fact that the commission was given broad policy formulation and rule making powers indicates a legislative recognition that all of the circumstances in which discrimination might exist and all of the forms which it might take were not then known and could not be anticipated, and that the diligence and expertise of an administrative agency were needed to achieve the purpose intended in the statute.

When read in the light of the entire statute, the provision which makes it an unfair practice to refuse to hire any person "because of such person’s . . . marital status” is broad enough in its import to cover the situation involved here.

Indeed, in Levinson v. Washington Horse Racing Comm’n, 48 Wn. App. 822, 826, 740 P.2d 898 (1987), the Court of Appeals held the automatic disqualification of a license applicant based on the spouse’s prior conviction for possession of controlled substances infringed on the constitutional right to marry.

Most recently, in Kastanis v. Educational Employees Credit Union, 122 Wn.2d 483, 859 P.2d 26, 865 P.2d 507 (1993), we again approved the definition of "marital status” contained in WAC 162-16-150: "The meaning of marital status as used in RCW 49.60.180 is not limited to conditions such as being married, single, or divorced, but also applies to antinepotism policies based on the identity of an employee’s or applicant’s spouse.” Kastanis, 122 Wn.2d at 488. We also noted, however, the 1993 amendments to RCW 49.60.040 were not before the court. Id. at 488 n.3. See also European Health Spa v. Human Rights Comm’n, 212 Mont. 319, 687 P.2d 1029 (1984) (illegal for female employee who engaged in no misconduct to be fired because of husband’s misconduct).

However, in the context of insurance policies whose provisions are subject to RCW 48.30.330, which forbids marital status discrimination in insurance contracts, a somewhat more limited approach to marital status discrimination has been evident. In State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 687 P.2d 1139 (1984), we declined to invalidate an insurance policy provision that excluded bodily injury to the resident spouse or other resident relative of the named insured. The court found the exclusion of injury to any and all resident family members was crucial, for it indicated the exclusion was not directed at or closely related to the institution of marriage.

In Edwards v. Farmers Ins. Co., 111 Wn.2d 710, 763 P.2d 1226 (1988), we analyzed marital status discrimination under RCW 48.30.330, and adhered to a broad interpretation of the marital status discrimination statute, stating marital status discrimination goes beyond the "employee’s bare marital status” and includes "the identity and occupation of his or her spouse,” so that a typical antinepotism policy constitutes marital status discrimination. Edwards, 111 Wn.2d at 710; Washington Water Power, 91 Wn.2d at 68-69.³

The difficult cases, the Edwards court explained, are those involving mixed factors, where the discrimination is based on the plaintiffs marital status and another qualifying factor. For example, an antinepotism policy turns on the employee’s marriage and the identity or occupation of the employee’s spouse as an employee of the same employer.

However, Edwards indicated even this broad approach has a limit and not all mixed cases will constitute marital status discrimination. To determine where to draw the line, Edwards adopted the reasoning of Cybyske v. Independent Sch. Dist. No. 196, 347 N.W.2d 256 (Minn.), cert. denied, 469 U.S. 933, 105 S. Ct. 330, 83 L. Ed. 2d 266 (1984). There, the court held a refusal to hire because of the views of an applicant’s spouse did not constitute discrimination, because the alleged reason for the employer’s action was not directed at the institution of marriage itself, "at least not with the same directness and closeness” as in the case of a policy barring employment of a spouse of an employee. Cybyske, 347 N.W.2d at 261.

Edwards stated the "[t]he same is true in Washington.” Edwards, 111 Wn.2d at 719. Under Edwards, discrimination based on conduct of a spouse is marital status discrimination only where the adverse employment action turns specifically on marital status or, to put it another way, where the employer’s action is more closely related to the plaintiffs marriage than to the spouse’s conduct.

The Edwards court relied on that reasoning in considering the legality of an antistacking provision applied only to a policy of a resident spouse, and not to policies of any other family members or other co-residents of the named insured. As a result, the Edwards court found the policy provision was prohibited because it turned specifically on the marriage, and was "more closely analogous to the classification found to be discriminatory in Washington Water Power” than to the other factor of holding a policy while living with the named insured. Edwards, 111 Wn.2d at 719-20.

BFT invites us to apply the ostensibly narrower definition of "marital status” found in Edwards and cases like Cybyske, arguing this is more consistent with the intent of the Legislature in its 1993 amendment to RCW 49.60.040. We decline to do so. The parties in Edwards did not argue and the Court did not consider the applicability of WAC 162-16-150. Thus, Edwards has no effect whatsoever on the vitality of our holding in Washington Water Power with respect to the regulation. While the 1993 amendment to RCW 49.60.040 may apply to cases arising after the effective date of the amendments and may alter the administrative definition of WAC 162-16-150, that issue is not now before us. Our precedents constrain us to employ WAC 162-16-150 to define marital status discrimination, just as we have done twice before. Kastanis, 122 Wn.2d at 488; Washington Water Power Co., 91 Wn.2d at 68.⁴

While the parties have referenced the 1993 legislative amendment to RCW 49.60.040(7), which defined marital status as "the legal status of being married, single, separated, divorced, or widowed,” Laws of 1993, ch. 510, § 4, they have not adequately discussed the applicability of the 1993 amendment to the events in this case, which occurred in 1991. Generally, an amendment applies prospectively only. In re F.D. Processing, Inc., 119 Wn.2d 452, 832 P.2d 1303 (1992); Landgraf v. USI Film, 511 U.S. 244, 114 S. Ct. 1483, 128 L. Ed. 2d 229 (1994). However, an amendment may apply retroactively if it is curative or remedial and intended to clarify rather than change the law. Tomlinson v. Clarke, 118 Wn.2d 498, 510-11, 825 P.2d 706 (1992). An amendment is curative if it clarifies or technically corrects an ambiguous, older statute, without changing prior case law. F.D. Processing, 119 Wn.2d at 461; Washington Waste Sys., Inc. v. Clark County, 115 Wn.2d 74, 78, 794 P.2d 508 (1990). Any attempt by the Legislature to contravene retroactively this Court’s construction of a statute "is disturbing in that it would effectively be giving license to the [Legislature to overrule this [C]ourt, raising separation of powers problems.” Johnson v. Morris, 87 Wn.2d 922, 926, 557 P.2d 1229 (1976). Accord Overton v. Economic Assistance Auth., 96 Wn.2d 552, 558, 637 P.2d 652 (1981). The Legislature did not expressly make the 1993 amendment retroactive. The 1993 amendment must be applied only prospectively because if the change is substantive, the general rule of prospective application applies; if the change is merely curative, prior Washington law is unaffected.

In summary, under Washington law prior to the 1993 legislative amendment to RCW 49.60.040, marital status discrimination was not confined to discrimination involving the institution of marriage itself, but more broadly related to marital status and spousal conduct. That definition encompasses the facts here.

B. Was Summary Judgment Proper?

In a summary judgment motion, the moving party bears the burden of demonstrating an absence of any genuine issue of material fact and entitlement to judgment as a matter of law. Young v. Key Pharm., Inc., 112 Wn.2d 216, 225, 770 P.2d 182 (1989). Thereafter, the non-moving party must set forth specific facts evidencing a genuine issue of material fact. The trial court considers the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. The appellate court reviews the trial court’s decision de novo. Fell v. Spokane Transit Auth., 128 Wn.2d 618, 625, 911 P.2d 1319 (1996); Mountain Park Homeowners Ass’n v. Tyd-ings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994). Viewing facts and inferences in a light most favorable to Maguía, we find an issue of fact as to whether BFT’s discharge of Kathryn Maguía was related to her marital status.

When BFT terminated her employment, it indicated Kathryn Maguía was not accused of misconduct. The trial court specifically found no misconduct by Kathryn Maguía in its order on summary judgment. Nothing in Greg Bowers’ journal suggested Kathryn Maguía engaged in any misconduct prior to her December 10, 1991 termination. Linda Hendler did not accuse her of misconduct. Moreover, nothing in Bowers’ journal indicated Maguía performed her duties at BFT at less than an acceptable level. She was not disciplined by BFT. Accordingly, it would appear her being married to Pat Maguía, who engaged in alleged misconduct with Linda Hendler and other female BFT staff, was the basis for BFT’s action. BFT made no effort to assess the conduct or performance of Kathryn Maguía as an individual. Taking the facts and inferences from the facts in a light most favorable to Kathryn Maguía, her discharge occurred because of the conduct of her spouse, and thus, it is for the trier of fact to determine whether BFT’s action was marital status discrimination for purposes of a prima facie case under RCW 49.60.020.

At trial, Maguía retains the burden of proving her discharge was not the result of a business necessity. BFT may argue the immediate motivating factor for its decision was the apparent inability of Kathryn Maguía and Linda Hendler to work with each other. BFT may also argue the dismissal was based on the disruption in BFT’s workplace, and that, in an evenhanded fashion, it also terminated the employment of the person involved in the animosity who was not married to Pat Maguía. Such contentions are appropriately addressed to whether Maguía presented a prima facie case that business necessity was not the basis for her firing.

CONCLUSION

Our Law Against Discrimination is designed to forestall invidious treatment of employees on the basis of race, sex, marital status, national origin, or disability without consideration of individual conduct and performance; this is the essence of discrimination.

There is sufficient evidence that a discharge based not upon Kathryn Magula’s individual merits or demerits, but rather upon Kathryn Maguía "the wife of Pat Maguía,” may give rise to a claim of marital status discrimination under RCW 49.60 as it existed prior to 1993. We affirm the Court of Appeals’ decision and remand the case for further proceedings consistent with this opinion.

Dolliver, Smith, Guy, and Johnson, JJ., concur.

1 The parties did not petition for review on any issue but the definition of marital status under ROW 49.60, and our review is confined to that issue. RAP 13.7(b).

2 Under WAC 162-16-150, an employer may discriminate based on marital status if it is necessitated by "business necessity.” WAC 162-16-150 states:

"It may also be an unfair practice because of sex, where it burdens women much more than men, or men much more than women. However, there are certain circumstances where business necessity may justify action on the basis of what the spouse does, and where this is so the action will be considered to come within the bona fide occupational qualification exception to the general rule of nondiscrimination. 'Business necessity’ for purposes of this section includes those circumstances where an employer’s actions are based upon a compelling and essential need to avoid business-related conflicts of interest, or to avoid the reality or appearance of improper influence or favor.”

3 The broad approach is taken in Thompson v. Board of Trustees, 192 Mont. 266, 627 P.2d 1229 (1981); Kraft, Inc. v. Department of Human Rights, 284 N.W.2d 386 (Minn. 1979); Ross v. Stouffer Hotel Co. (Haw.) Ltd., Inc., 76 Haw. 454, 879 P.2d 1037 (1994). A narrow approach, holding antinepotism policies are not discriminatory, is taken in Whirlpool Corp. v. Civil Rights Comm’n, 425 Mich. 527, 390 N.W.2d 625 (1986); Manhattan Pizza Hut, Inc. v. Human Rights Appeal Bd., 51 N.Y.2d 506, 415 N.E.2d 950, 434 N.Y.S.2d 961 (1980); Boaden v. Department of Law Enforcement, 267 Ill. App. 3d 645, 642 N.E.2d 1330 (1994), aff’d, 171 Ill. 2d 230, 664 N.E.2d 61 (1996). These latter cases confine marital status discrimination to cases where the adverse action is premised solely on marital status as single or married.

4 We adhere in this case to our clear precedents, rather than "reflecting personal policy preferences of the individual justices,” as the dissent imputes. The dissent does not contradict our analysis of Washington Water Power or Kastanis. Perhaps revelatory of a personal preference of an individual justice is the dissent’s reference to Richard A. Epstein, Forbidden Grounds: The Case Against Employment Discrimination Laws (1992). In his introduction, Professor Epstein states, "employment discrimination laws were an unjustified limitation on the principle of freedom of contract . . . There is no adequate theoretical foundation or practical justification for the employment discrimination laws.” Epstein at xii.