SB 132-HUMAN RIGHTS COMMISSION  9:45:03 AM MR. SCOTT NORDSTRAND, deputy attorney general, Department of Law (DOL) presented SB 132. He explained SB 132 is similar to a bill that passed out of the Senate Judiciary Standing Committee in 2004. SB 132 would allow the Human Rights Commission to evaluate complaints of unlawful discrimination and allocate its resources to prosecuting those complaints that best serve the goal of eliminating unlawful discrimination. SB 132 improves the Commission procedures and enhances fairness. It clarifies remedies the Commission may award to remedy unlawful discrimination. Any person who believes they have been subjected to unlawful discrimination can file a complaint with the Human Rights Commission. If substantial evidence of unlawful discrimination is found, the case proceeds to conciliation. If that is unsuccessful the case evolves into a more formal adjudication process. 9:47:28 AM The case would go forward into a litigation-type process. SB 132 would put the process into a central panel. The hearing officer would make a recommended decision to the Commission to resolve the case. SB 132 addresses a problem created by the Department of Fish and Game in 1995. The Alaska Supreme Court said a case has to be completely lacking in merit otherwise it has to be heard. This created a workload problem for the Commission. 9:49:31 AM Most cases are subject to judicial review and are regularly overturned by the Superior Court. SB 132 provides some basis for the executive director to dismiss cases. Page 3 lists the basis the executive director can dismiss. This is putting the Commission in a more similar position with the Equal Opportunity Commission. They have the power to review the most egregious cases with the resources they have. 9:51:06 AM SB 132 also clarifies some of the processes. It allows employers to have a better understanding of what is being charged. Oftentimes complaints are very ambiguous and general. The complaint does not necessarily identify all areas of discrimination. Currently there is no requirement the Human Rights Commission inform either party they are changing the complaint to address other issues that have come up during the investigation. 9:52:44 AM SB 132 also gives the parties the opportunity to go through the conciliation process with benefit of all the information. If evidence reveals there is greater discrimination, it may be much easier to bring the parties to resolution. 9:53:47 AM At the point of failed conciliation a formal accusation by the Commission must be drafted against the charged party. SB 132 improves procedures because it allows agreements during the pre- hearing phase and it allows the compromise of damage claims. There has been past confusion regarding whether the Commission could compromise claims at the conciliation stage. The Administrative Procedure Act would now apply except as otherwise provided in statute AS 18.80. It allows summary judgment. 9:56:21 AM SB 132 clarifies the remedies section of the act and provides a list of remedies available. It also includes a prohibition of non-economic damages. It defines pay for the purposes of back pay and front pay and it also limits front pay to one year. 9:58:46 AM SB 132 specifically says people have an obligation in an employment discrimination case to use reasonably diligent efforts to find other employment. In terms of housekeeping, the regulatory statute of limitations (180 days) is put in the statute. This makes it consistent with federal law. It also incorporates the federal fund rate plus 3 percent as an interest rate. 10:00:02 AM SENATOR GENE THERRIAULT said there was concern from the Commission regarding the verbiage on Page 2 lines 27-31. People from the Commission have expressed they did not want the discretion. He asked Mr. Nordstrand whether he has discussed that with them. MR. NORDSTRAND responded they have had discussions. Their concern was it would require the Commission to review all of the cases. SB 132 uses the word "may" for the specific reason that it allows them to implement discretion if they want. However it is enough discretion that they could pass a regulation saying, "we won't". He said as a matter of public policy, there should be some review by the actual Commission that is charged with the responsibility. There may be the case where an investigator interviews people to determine whether there is substantial evidence of discrimination and that is reviewed by the executive director. 10:02:45 AM SENATOR THERRIAULT stated part of the concern expressed by the Commission is in their effort to focus their attention to resources they are going to have to review all of the cases to see which ones they need to take up. MR. NORDSTRAND said it does not need to be more complicated than an executive investigation. If there is a close call case, the Human Rights Commission should consider it. SENATOR HOLLIS FRENCH asked how the Commission gets notice of case dismissals. MR. NORDSTRAND replied he does not know. CHAIR RALPH SEEKINS advised two people from the Human Rights Commission were online waiting to testify. 10:05:09 AM MS. GRACE MERKES, commissioner, Alaska State Commission for Human Rights, answered Senator French's question. She said summaries of cases are given to the Commission during the regular quarterly meetings. She is not sure whether the Commission gets a summary of every complaint. MS. PAULA HALEY, executive director, Alaska State Commission for Human Rights, answered Senator French's question regarding how the Commission informs the commissioner on the "no substantial evidence findings" (NSE) cases. She said they do not provide them with a list. They are involved in cases where there is a substantial evidence finding. Until a repeal of the regulation regarding review and reconsideration, there is no other format to review the NSE findings. 10:06:50 AM MS. HALEY continued the decision was the threshold prosecutorial decision whether the Commission goes further to conciliation and ultimately to the public hearing that Mr. Nordstrand was describing. SENATOR FRENCH asked Ms. Haley how the Commission would in its discretion review the executive director's order of dismissal. MS. HALEY responded it was the commissioner's belief that perceived errors would create petitions from individuals or their attorneys. The Commission would need to devise regulations to look at them. Concern has been expressed that in time there would be limited resources and low return on investment. 10:09:03 AM SENATOR GRETCHEN GUESS asked Mr. Nordstrand to explain how the limitations on front and back pay work. She expressed concern over whether a person could readily find other employment. MR. NORDSTRAND said it was essentially a description of the current legal standard of a requirement that anyone who claims damages in an employment discrimination case has an obligation to attempt to mitigate their damages. This is continuing along the line of full disclosure for people who are in the process. People know this is a requirement. There is no doubt that mitigation is required for those who seek damages. However, if a person is shown not to have searched hard enough for other employment, they may not get all of their front pay. 10:11:27 AM SENATOR GUESS advised Mr. Nordstrand that Page 5, line 15 says "must be reduced" and not "may". MR. NORDSTRAND responded SB 132 was talking about the intangible. The "must" is there because under current law, it must be reduced. If through reasonably diligent efforts, a person could have earned some money, then it must be reduced. That is not optional under the law. CHAIR SEEKINS stated when no reasonable effort is put forth damages could be reduced. MR. NORDSTRAND answered correct. CHAIR SEEKINS commented a person who has shown a reasonably diligent effort would not be penalized. 10:14:05 AM SENATOR GUESS asked Mr. Nordstrand the reason the Legislature was not tackling the definition of substantial. MR. NORDSTRAND said it would be a much more difficult and dangerous thing to do in terms of protecting the rights of the people suffering from discrimination. He said there are cases where witnesses are not credible, or where the case is not enough money to worry about. Tinkering with substantial evidence is like tinkering with air. It is a legal standard known when seen. The Supreme Court determined any factual disputes could not be settled without a hearing. The ultimate outcome would create an opportunity for abuse. There are cases that are not worth the time and money. At the end of the day everybody still has a right to take the case to court. 10:17:22 AM CHAIR SEEKINS commented currently a factual dispute has to go to hearing. MR. NORDSTRAND agreed. CHAIR SEEKINS commented SB 132 was now giving the executive director prosecutorial discretion. MR. NORDSTRAND added SB 132 allows the use of state resources to achieve a very important government purpose. The question is how to best use the resources. There will be marginal cases that do not merit pursuing. For those cases a person can hire a lawyer or file a complaint on their own. The remedies are still there; the question is whether to use government resources when there are more important cases to deal with. 10:18:49 AM CHAIR SEEKINS commented currently an employer gets dragged into a hearing simply based on allegations. MR. NORDSTRAND agreed. He said the government essentially provides a lawyer to a claimant while requiring an employer or landlord to respond. There is no provision for the employer to recoup money spent on unnecessary legal representation. CHAIR SEEKINS commented a disingenuous employee has the advantage. MR. NORDSTRAND agreed and stated currently the Human Rights Commission is without power to stop unfounded claims. The Alaska Superior Court forces a hearing and it puts financial pressure on the person bearing the burden. 10:21:10 AM MR. NORDSTRAND added employers often choose to settle the case because the cost to settle would be substantially less than the cost to challenge the claim. SENATOR GUESS said she believes there is a better way to structure the language because SB 132 as currently written gives the executive director an incredible amount of power. CHAIR SEEKINS commented district attorneys are given an incredible amount of power. SENATOR GUESS agreed but stated she has issues with Section 4, paragraphs 1,5,6 & 7, which are all very subjective decisions. She expressed concern about the breadth of the language and offered there should be another way to deal with the situation. 10:24:00 AM CHAIR SEEKINS said he has seen cases where an investigator does not agree with the person's claim and yet it goes to public hearing. He pondered the level the state should go to protect an innocent employer when an investigator agrees there is no substantial evidence. An employer is put in the position of being publicly accused of discrimination whether or not it is substantiated. He expressed support for SB 132. He said he is willing to give discretion to the attorney, but currently the system is weighted so heavily in favor of the complainant that it creates abuse of the system. 10:26:00 AM SENATOR GUESS suggested unfounded claims should be dismissed up front. She said the problem should be fixed on the front end. MR. NORDSTRAND said the elements in Section 4 subsection (b) are an attempt to fix the problem on the front end. SB 132 would represent the best use of resources. Some employers carry on with the hearing on the basis of principle, which costs the state much money. Section 4, paragraph 1 addresses a refusal to compromise could be unreasonable. The Commission on the behalf of the aggrieved person brings the cases. The discretion and resources are those of the Human Rights Commission. 10:29:09 AM CHAIR SEEKINS clarified the employee pays nothing for the process. MR. NORDSTRAND responded correct. SENATOR THERRIAULT mentioned that sometimes the most unreasonable clients are the pro bono clients. SENATOR GUESS stated Section 4 paragraph (1) appears to be based on either side. She asked Mr. Nordstrand whether that was the case. MR. NORDSTRAND said no. It is about whether or not the complainant's case would be dismissed. The employer always has the right to be unreasonable. 10:31:37 AM SENATOR GUESS moved Amendment 1. 24G-1 11/3/2005 (10:23 AM)   A M E N D M E N T 1  Page 2, line 27: Delete "The commission, in its" Page 2, line 28, through page 3, line 1: Delete all material. Page 3, line 4: Delete ", in the executive director's discretion," Page 3, following line 15: Insert the following new material: "(c) The commission, in its discretion, may review the executive director's order of dismissal under (a) or (b) of this section and may affirm the order, remand the complaint for further investigation, or, if the commission concludes that substantial evidence supports the complaint of an unlawful discriminatory practice, refer the complaint for conference, conciliation, and persuasion as provided in AS 18.80.110, or for hearing." Page 3, line 16: Delete "(c)" Insert "(d)" Page 3, line 22: Delete ", in the executive director's discretion," CHAIR SEEKINS objected for discussion. SENATOR GUESS explained the proposed amendment would allow the Commission to review a dismissal under Section 4, subsection (a) and/or (b). 10:33:35 AM CHAIR SEEKINS asked whether Commission members were paid. MR. NORDSTRAND answered they receive per Diem. MS. MERKES stated they were unpaid except for per diem. She said if the Commission were to do what is being suggested, it would take up a lot of volunteer time. Per Diem consists of dinner and a plane ticket. MS. HALEY commented a modicum per Diem of $40 a day was revoked in the early 1990s. SENATOR GUESS offered the committee might consider changing Section 4 to a review under subsection (b) and not (a). 10:35:36 AM CHAIR SEEKINS stated a claimant has the option of a civil action if the claim was dismissed. MR. NORDSTRAND agreed that any dismissal is free to go to court so long as they are within the statute of limitations, which is two years. CHAIR SEEKINS asked Mr. Nordstrand the statute of limitations on an action with the Commission. MR. NORDSTRAND answered SB 132 places it in statute at 180 days. CHAIR SEEKINS commented that seemed like a reasonable amount of time. MR. NORDSTRAND agreed. He said the claimant could seek additional remedies in court based on the finding. CHAIR SEEKINS clarified a civil remedy would require a person to pay for their own defense. 10:37:47 AM MR. NORDSTRAND agreed. He referred to Amendment 1 and stated the practical consequence is a check and balance on the discretion to dismiss if the Commission chooses to allow it. The Commission could choose not to review cases based on lack of resources. CHAIR SEEKINS asked Ms. Haley the procedure for a dismissed case. MS. HALEY said it would not be burdensome. 10:40:03 AM CHAIR SEEKINS suggested using the wording "may by the request of the majority of the Commission." MS. HALEY recommended adding time constraints otherwise it could be unfair to the responding party. MR. NORDSTRAND said the proposed wording would essentially require the Commission to consider all of the cases. Roll call proved Amendment 1 failed 2-3 with Senators Huggins, Therriault, and Chair Seekins dissenting. 10:42:18 AM SENATOR GUESS voiced disappointment over not including subsection (b) in the review. She asked the committee members to consider possible consequences to the language of SB 132. MR. NORDSTRAND reiterated all decisions are subject to superior court review. SENATOR CHARLIE HUGGINS moved SB 132 from committee with individual recommendations and attached fiscal note(s). There being no objection, the motion carried.