Prince George's County v. Zayre Corp.

BISHOP, Judge. Betty Roberts filed a complaint with Prince George’s County Human Relations Commission (HRC or Commission) against Zayre Corporation on April 3, 1980. In that complaint, Roberts alleged discrimination based on race and sex when Zayre discharged her from her job as a security guard. On December 7, 1982, after a hearing, an HRC employment panel found that Zayre discriminated against Roberts based on her race in violation of sections 2-185, 2-186, 2-222 of the Prince George’s County Code.

Based on these findings, the Commission ordered Zayre to reinstate Roberts with back pay. When Zayre refused to comply with this order, HRC filed a complaint in the Circuit Court for Prince George’s County to enforce the order. Pursuant to section 2-197 of the Prince George’s County Code, Zayre presented two days of additional testimony, which indicated that Roberts’ dismissal was not racially motivated. After hearing this additional testimony, the judge concluded that “this case comes down to an issue of credibility ... [and] the only thing a trier of fact has to do is to decide which witnesses the trier of fact is going to believe.” Since the judge had the opportunity to hear only the new testimony introduced by Zayre, he found it to be an impossible task to balance that live testimony against the written transcript upon which the Commission based its original determination of discrimination.

Accordingly, the court remanded the case to HRC so that the original finder of fact could reevaluate its conclusions “in light of all the evidence as may be before it, including the evidence originally presented to said Commission and the evidence presented to this court at the hearing on this matter.” In most cases, the Commission could handle this matter in a routine manner: the original panel would reassemble to hear the additional testimony and then modify or reaffirm their findings as the new evidence warrants. In this case, however, the composition of the panel had changed entirely ³⁹⁵ since the first hearing, so that none of the panel members on remand had heard the original testimony. The panel again determined that Zayre discriminated against Betty Roberts and recommended that the HRC reaffirm the original order, the conclusion that the Commission ultimately adopted. In reaching its conclusions, the second panel relied on the written transcript of the testimony introduced both before the first panel and the circuit court.

Although the panel offered to the parties the opportunity to adduce additional testimony, not yet heard before either the first panel or the circuit court, it explicitly declined Zayre’s request to conduct a de novo hearing. When Zayre refused to comply with its second order, the Commission again sought to enforce the order in the circuit court. This time, the court took exception to the fact that the new panel reached its conclusion without having heard either the live testimony produced before the original HRC hearing or that heard by the court, precisely what the court had stated it could not do. Accordingly, the court remanded the case with the express instructions that the HRC conduct a de novo hearing so that an entire panel would have the opportunity to hear and evaluate the testimony and thus be in the position to assess fully credibility.

On appeal, the Commission raises the following issues: I. Whether the court erred when it remanded the case to the Commission for a de novo hearing; II. Whether the Commission’s decision is supported by substantial evidence; III. Whether the doctrine of preclusion bars further litigation of this matter; and IV. Whether Zayre waived its right to further litigation of this case.

FACTS Zayre Corporation hired Betty Roberts as a security guard in November of 1975. For over four years, Roberts ³⁹⁶ maintained a good working relationship with Zayre, earned a good work record and, after her first two years, received a promotion to the position of security manager. During this latter period, complainant began to bring her daughter with her to help with minor tasks at the store. This practice continued for over three years until Roberts’ termination on April 20, 1980.

In October of 1979 Roberts was transferred to Zayre’s Branch Avenue store, as a security manager. After several months at her new position, problems began to arise between Roberts and her immediate supervisor, Mr. Angelo, the store manager. In January of 1980, Mr. Angelo issued a written notice of poor work performance to Roberts. Less than one month later, she received a second notice of her failure to improve sufficiently her job performance.

At no time during her employment with Zayre, however, was complainant reprimanded for allowing her daughter to assist her with minor work duties. On April 2, 1983, Angelo fired Roberts because she breached company policy by permitting her daughter to work “off-the-clock.” 1 Zayre management had given no prior notice to the complainant that she was violating company policy by having her daughter assist her in her work. Zayre contends that it had no prior knowledge of Roberts’ daughter accompanying and assisting her mother on the job and dismissed Roberts immediately upon discovering that fact. Roberts vigorously contends that Zayre had prior knowledge of her daughter’s, as well as other employees’ children, working off the clock.

It is undisputed that Roberts’ work performance, other than this specific breach of company policy, was never mentioned as grounds for her dismissal. In her complaint filed with the Prince George’s County Human Relations Commission one day after her discharge, ³⁹⁷ Roberts alleged that Zayre had treated her differently than the similarly situated white employees, who were not discharged because they had their children assist them on the job. 2 I. Remand for a De Novo Hearing The HRC brought this action pursuant to section 2-197 of the Prince George’s County Code, which provides: Enforcement of orders by Court. If any complainant or respondent refuses to comply with an order of the Commission made within the scope of this Division, the County, on behalf of the Commission, may initiate a suit in equity in the Circuit Court to enforce compliance with any of the provisions of this Division. The Court, in hearing the case shall be governed by the judicial review standards as set forth in the Administrative Procedure Act (Sections 255-56 of Article 41 of the Annotated Code of Maryland) except that additional evidence if otherwise admissible under the law of evidence, may be presented to the Court without the necessity of an application or without the necessity of showing reasons for the failure to present it at the hearing before the Commission.

Whenever the Commission invokes this right of enforcement, the statute accords to the party against whom the HRC has filed to enforce its order, a correlative right to contest the Commission’s order and to present additional evidence to the circuit court “without the necessity of an application or without the necessity of showing reasons for the failure to present it at the hearing before the Commission.” PRINCE GEORGE’S COUNTY CODE § 2-197 (1979). ³⁹⁸ Section 2-197 incorporates by reference several sections of the Administrative Procedure Act as the standard of review to be employed by the circuit court, including article 41, Section 255 3 of the Maryland Code, which provides in pertinent part: (a) Right to review—Any party aggrieved by a final decision in a contested case, whether such decision is affirmative or negative in form, is entitled to judicial review thereof under this subtitle. (b) Additional evidence—If, before the date set for hearing, application is made to the court for leave to present additional evidence on the issues in the case and it is shown to the satisfaction of the court that the additional evidence is material and that there were good reasons for failure to present it in the proceeding before the agency, the court may order that the additional evidence be taken in open court or before the agency upon such conditions as the court deems proper. In cases in which the additional evidence is taken before the agency, it may modify its findings and decision by reason of the additional evidence and shall file with the reviewing court, to become a part of the record, the additional evidence, together with any modifications or new findings or decision. * * * * * * (g) Affirmance, remand, reversal or modification of decision—The court may affirm the decision of the ³⁹⁹ agency or remand the case for further proceeding; or it may reverse or modify the decision if the substantial rights of the petitioners had been prejudiced because the administrative findings, inferences, conclusions, or decisions are: * Jfí ?¡c $ 41 (5) Unsupported by competent, material, and substantial evidence in view of the entire record as submitted; or (6) Against the weight of competent, material and substantial evidence in view of the entire record, as submitted by the agency and including de novo evidence taken in open court; ... Pursuant to this statute, the circuit court has the option of receiving the additional evidence “in open court” or