McCORMICK, Justice (dissenting).

I believe judicial review is governed by the Iowa Administrative Procedure Act. Because the employer did not allege a basis for reversal of the Commission's decision under the IAPA, I would reverse the district court and remand for an order enforcing the agency's decision. Even if the IAPA did not apply, I would reach the same conclusion as the Commission through de novo review.

I. Applicability of the IAPA. This case was submitted twice in district court. The first submission, to Vietor, J., resulted in an order of remand to the Commission for addition of employee time records to the evidence, clarification of a hearing officer finding, and review of the amended record. In its order of remand the court characterized the case as "a judicial review proceeding under the authority of Iowa Code section 17A.19." Authority for the remand was found in section 17A.19(8) of the IAPA. After amendment of the record, the Commission affirmed its prior order, and the case was submitted again in district court.

It was only in the second submission, to Schultz, J., that the court held the IAPA was inapplicable and reviewed the evidence de novo. On the merits, the court found the Commission failed to sustain its burden of proof on the discrimination charge. As a result, the court reversed the Commission and dismissed Quigley's complaint. In this appeal, the Commission contends the court erred in the second submission in holding that judicial review was not governed by the IAPA.

The question of the applicability of the IAPA is addressed in the statute itself. In relevant part, section 17A.23 provides:

The Iowa Administrative Procedure Act shall be construed broadly to effectuate its purposes. This chapter shall also be construed to apply to all agencies not expressly exempted by this chapter or by another statute specifically referring to this chapter by name; and except as to proceedings in process on July 1, 1975, this chapter shall be construed to apply to all covered agency proceedings and all agency action not expressly exempted by this chapter or by another statute specifically referring to this chapter by name.

(emphasis added). Under this provision, the present action was subject to the IAPA unless it was a "proceeding in process on July 1, 1975."

Because the polestar in statutory interpretation is legislative intent, the issue is what the legislature intended these words in the IAPA to mean. No definition of proceeding in process is given. Thus section 4.1 is applicable:

In the construction of statutes, the following rules shall be observed, unless such construction would be inconsistent with the manifest intent of the general assembly, or repugnant to the context of the statute: . . .

2. Words and phrases. Words and phrases shall be construed according to the context and the approved usage of the language; but technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in law, shall be construed according to such meaning.

The word "proceeding" is not technical, nor has it acquired a peculiar meaning in law. See Eldridge City Utilities v. Iowa State Commerce Commission, 303 N.W.2d 167 (Iowa 1981). Our task, therefore, is to construe proceedings in process "according to the context and approved usage of the language." The inquiry is not what "proceedings in process" might mean in some other context but what the term means as used in section 17A.23 of the IAPA. See Hanover Insurance Co. v. Alamo Motel, 264 N.W.2d 774, 778 (Iowa 1978) ("Issues of statutory construction cannot be resolved from isolated words taken out of context.").

In section 17A.23 the legislature directed a broad construction of the statute to effectuate its purposes. The remedial and beneficial purposes of the IAPA are stated in section 17A.1(2). Independent of the mandated broad construction of the statute, we have recognized that "[a]n ameliorative change should be extended to every case in which it properly can apply." State v. Wiese, 201 N.W.2d 734, 737 (Iowa 1972). Section 17A.23 makes the IAPA applicable in all cases, with tightly-drawn exceptions. Proceedings in process are among the exceptions. Because the exceptions must be construed narrowly, proceedings in process must be construed narrowly.

This issue was analyzed in Bonfield, The Iowa Administrative Procedure Act: Background, Construction, Applicability, Public Access to Agency Law, The Rulemaking Process, 60 Iowa Law Rev. 731, 758 (1975):

[W]here such an exemption from the IAPA is found to exist, it should be construed narrowly by the agencies and the courts. Exemptions from a comprehensive code like the IAPA implementing very important public policies should always be read narrowly in order to maximize the underlying general legislative purposes. This is particularly so where those basic purposes are to secure as much uniformity of minimum administrative procedure as is feasible, and as much fairness in all administrative proceedings as is feasible, consistent with other important conflicting values. In light of prior discussion, the section 23 exemption for "proceedings in process on [the IAPA's] effective date," which is July 1, 1975, should also be read narrowly. It should, therefore, exclude from the IAPA only those particular rulemaking proceedings actually commenced prior to that date by submission of the rule under current Chapter 17A to the Legislative Rules Review Committee and Attorney General, or actually commenced by taking the first prescribed formal step under another statute specifying additional or substitute rulemaking procedures for an agency. Similarly, that section 23 phrase should be read narrowly to cover only those particular contested case proceedings actually commenced prior to July 1, 1975, by filing the equivalent of the section 12(1) notice; and only those judicial review proceedings actually commenced prior to July 1, 1975, by the filing of notice adequate for that purpose under prior law.

(emphasis added). A "section 12(1) notice" is the written notice of hearing, whose delivery constitutes "commencement of the contested case proceeding." § 17A.12(1) (emphasis added). I agree with Professor Bonfield's analysis of legislative intent in section 17A.23.

We have recognized that the investigative stage which follows the filing of a complaint under chapter 601A is not a contested case. Estabrook v. Iowa Civil Rights Commission, 283 N.W.2d 306, 311 (Iowa 1979) ("The commission's probable cause function is not a section 17A.12 contested case because the Constitution does not require an evidentiary hearing."). In the present situation, the section 17A.12(1) notice was not served upon the employer until November 1977. Because the contested case proceeding did not commence until then, it was not "in process" on July 1, 1975. Thus the IAPA governed the proceeding.

This conclusion is supported by the legislature's indication in other provisions of chapter 17A as to what constitutes a "proceeding." These provisions constitute part of the context in which section 17A.23 must be construed. See Osborne v. Edison, 211 N.W.2d 696, 697 (Iowa 1973). The term "proceeding" in the IAPA is used to embrace the formally-initiated rulemaking process and cases which have reached the adversary stage. In section 17A.1(2), the statute provides: "This chapter is meant to apply to all rulemaking and contested case proceedings and all suits for the judicial review of agency action that are not specifically excluded from this chapter or some portion thereof by its express terms or by the express terms of another chapter." (emphasis added). In addition, one of the purposes of the act is "to increase the fairness of agencies in their conduct of contested case proceedings. . . ." Id. (emphasis added). Furthermore the statute provides: "`Contested case' means a proceeding including but not restricted to ratemaking, price fixing, and licensing in which the legal rights, duties or privileges of a party are required by Constitution or statute to be determined by an agency after an opportunity for an evidentiary hearing." § 17A.2(2) (emphasis added).

Because the IAPA was applicable to the contested case proceeding, the judicial review provisions of section 17A.19 were the exclusive means for obtaining review of the Commission's order. See Jackson County Public Hospital v. Public Employment Relations Board, 280 N.W.2d 426, 428-29 (Iowa 1979); Salsbury Laboratories v. Iowa Department of Environmental Quality, 276 N.W.2d 830, 833-35 (Iowa 1979); Kerr v. Iowa Public Service Co., 274 N.W.2d 283, 287-88 (Iowa 1979).

This, of course, does not end the inquiry. We have recognized that the label attached to the district court petition is not determinative "if the instrument, its filing and other procedural steps met section 17A.19 requirements." Neumeister v. City Development Board, 291 N.W.2d 11, 13 (Iowa 1980). Under Neumeister, the district court does not acquire jurisdiction of a petition for judicial review unless file-stamped copies of the petition are mailed by the petitioner to all parties named in the petition within ten days of the petition's filing as required by section 17A.19R.. The record in this case shows copies of the petition were personally served rather than mailed. This in itself would require reversal of the district court. For present purposes, however, I will assume the district court had jurisdiction of the employer's petition.

The fact remains that the petition did not attack the Commission's order on a ground specified in section 17A.19(8). See § 17A.19(4)(d). The employer merely sought a different result based on de novo review. The sufficiency of the evidence ground in section 17A.19(8)(f) was not urged. Therefore no basis was alleged upon which relief could be obtained under the IAPA. Furthermore, no claim can be made that any ground provided in section 17A.19(8) was tried by consent of the parties. Instead, the employer rested entirely on its contention it was entitled to a de novo trial pursuant to section 601A.10(6). I would conclude that the employer's petition did not meet section 17A.19 requirements. Therefore I would not decide whether the substantial evidence test was satisfied in this case. Instead I would reverse the district court and remand for an order enforcing the Commission's decision pursuant to its petition for such an order under section 601A.15, The Code 1975.

II. The result upon de novo review. Even if our review were de novo, I could not concur in the findings of the court. I would hold that the employer discriminated against Quigley on the basis of her sex in violation of section 601A.7(1)(a), The Code 1973.

It is difficult to discern what legal standard the district court or this court used in determining Quigley did not prove her case. This court has not delineated principles governing proof of an employment discrimination complaint under the Iowa Civil Rights Act. Because the court has given persuasive effect to federal cases interpreting comparable provisions of Title VII of the 1964 Civil Rights Act, I assume the court will adopt the federal principles governing proof of employment discrimination. See Cedar Rapids Community School District v. Parr, 227 N.W.2d 486, 492-93 (Iowa 1975); Wilson-Sinclair Co. v. Griggs, 211 N.W.2d 133, 139 (Iowa 1973).

Two types of employment discrimination cases have been recognized under the federal statute. One type is based on a theory of disparate treatment, and the other is based on a theory of disparate impact. Disparate treatment cases involve claims that the employer treats an employee or employees less favorably than others based on race, color, religion, sex or national origin. See International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335 n. 15, 97 S.Ct. 1843, 1954, 52 L.Ed.2d 396, 415 (1977). In contrast, disparate impact cases involve claims that facially neutral policies of the employer have a proscribed discriminatory effect. See Griggs v. Duke Power Co., 401 U.S. 424, 430-31, 91 S.Ct. 849, 853, 28 L.Ed.2d 158, 164 (1971). Different principles govern these two types of cases. Because the present case is based on allegations of disparate treatment, only the principles which govern that kind of case are relevant here.

The elements of a prima facie case of disparate treatment are listed in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). To establish a prima facie case of racial discrimination in hiring, the Court said a complainant is required to offer evidence:

(i) that he belongs to a racial minority;

(ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant's qualifications.

Id. at 802, 93 S.Ct. at 1824, 36 L.Ed.2d at 677.

Thus, in order to make a prima facie case of disparate treatment in discharge, a complainant is required to present evidence (1) that he belongs to a group protected by the statute; (2) that he was qualified for the job from which he was discharged; (3) that he was terminated; and (4) that, after his termination, the employer hired a person not in complainant's protected class or retained persons with comparable or lesser qualifications who are not in the protected group. See Lujan v. State of New Mexico Health and Social Services Department, 624 F.2d 968, 970 (10th Cir. 1980). Evidence supporting these elements creates an inference that the employer's acts, "if otherwise unexplained, are more likely than not based on the consideration of impermissible factors." Furnco Construction Co. v. Waters, 488 U.S. 567, 577, 98 S.Ct. 2943, 2949-50, 57 L.Ed.2d 957, 967 (1978).

The burden of persuasion does not leave the complainant. However, a prima facie case creates a "presumption" of discrimination which, if believed, will require a finding of discrimination. Texas Department of Community Affairs v. Burdine, ___ U.S. ___, 101 S.Ct. 1094, 67 L.Ed.2d 207 (1981). If the employer desires to dispel this presumption, he must produce evidence showing "some legitimate, nondiscriminatory reason" for the challenged action. McDonnell-Douglas Corp., 411 U.S. at 802, 93 S.Ct. at 1824, 36 L.Ed.2d at 668. Thus the distinction between burden of persuasion and burden of production becomes relevant. See McDonnell v. Town of Clarksville, 241 N.W.2d 904, 908 (Iowa 1976). We have no reason for finding that the hearing officer or Commission misunderstood this distinction in the present case. If Quigley established a credible prima facie case, it was incumbent on the employer to make a "showing," that is, to produce evidence, to refute it:

This evidentiary relationship between the presumption created by a prima facie case and the consequential burden of production placed on the defendant is a traditional feature of the common law. "The word `presumption' properly used refers only to a device for allocating the production burden". . . . Usually, assessing the burden of production helps the judge determine whether the litigants have created an issue of fact to be decided by the jury. In a title VII case, the allocations of burdens and the creation of a presumption by the establishment of a prima facie case is intended progressively to sharpen the inquiry into the elusive factual question of intentional discrimination.

Burdine, ___ U.S. at ___, n. 8, 101 S.Ct. at 1094, 67 L.Ed.2d at 207. See also Ligons v. Bechtel Power Corp., 625 F.2d 771, 773 (8th Cir.), cert. denied, ___ U.S. ___, 101 S.Ct. 400, 66 L.Ed.2d 246 (1980).

Once the employer has articulated a legitimate, nondiscriminatory reason for its action, the complainant has the burden of persuading the trier of fact that the reason was merely a pretext for discrimination. See McDonnell-Douglas Corp., 411 U.S. at 805, 93 S.Ct. at 1826, 36 L.Ed.2d at 679. Pretext can be shown through cross-examination or additional evidence. Burdine, ___ U.S. at ___, 101 S.Ct. at 1095, 67 L.Ed.2d at 207. This determination bears on the employer's motive. The complainant has the burden of ultimately establishing that the prohibited conduct was a factor in the challenged action. Satz v. ITT Financial Corp., 619 F.2d 738, 746 (8th Cir. 1980).

Against this background, I believe a de novo review of the record in this case requires findings that Quigley met her burden to make a prima facie case, the employer articulated a legitimate, nondiscriminatory reason for discharging her, and Quigley demonstrated that this reason was pretextual. As a result, I would hold that the Commission was correct in its sex discrimination finding and order.

Because sex discrimination is prohibited by the statute, Quigley was in a protected group. She adduced substantial evidence that she was qualified for and performing her job. She was discharged, and after her discharge her job was filled by a male. Moreover, she offered testimony that another part-time employee with similar qualifications was retained. Thus, she established a prima facie case of discrimination.

The employer articulated two reasons for the discharge. The first was an annual slackening of sales. The other was poor job performance and misconduct. Although the first reason is a questionable basis for discharge as opposed to layoff, the second reason is a legitimate, nondiscriminatory reason for discharge.

The fighting issue is whether, under the whole record, the reasons for Quigley's discharge were pretextual. More particularly, the issue is whether she met her burden to prove her sex was a factor in her firing.

Quigley was selected and hired by Kenver Scott, the station manager, as a part-time station attendant. During her tenure, the station was staffed in the evening by Scott, Mark Fishel, the assistant manager, and two other part-time employees, Mike Lange and Mike Hay. Scott drew up the work schedule. Two part-time employees worked each evening, usually under Fishel. After 7 p.m. rush hour, one part-time employee would help clean up the station, including the restrooms, and then leave. The other part-time employee remained until closing.

The first articulated reason for Quigley's discharge, a seasonal slackening of business, was admittedly advanced by Scott to avoid a confrontation with her in the presence of a customer. Moreover, it was a basis for layoff rather than discharge, and her position was filled approximately one and one-half months later.

As to the second reason, the record shows she was guilty of poor job performance and misconduct. The employer's problem is that no basis exists for differentiating Quigley's poor performance from that of the other station personnel. No formal workrules or disciplinary policies existed. All employees, including Scott and Fishel, engaged in misconduct which affected their performance. It included bickering and arguing, throwing each other over a railing behind the station, putting each other's cigarettes out, and playing waiting games to stall going out on the drive to assist customers. The part-time employees all had to be reminded to perform their assigned duties. Moreover, neither Scott nor Fishel remembered complaining to Quigley concerning her job performance. Scott admitted he had no first-hand knowledge of her performance.

The events which actually led to Quigley's discharge do not seem to be in dispute. Scott was concerned about the constant bickering and arguing. Fishel, an active participant in those events, recommended Quigley be fired. Without further inquiry, Scott prepared a work schedule omitting her. She happened to see the schedule. When she asked Scott about it in the presence of a customer, he told her she was being laid off because of slow sales. Later he admitted he was firing her, alleging poor job performance. Both Scott and Fishel acknowledged that the arguing and bickering may have resulted from friction based on the male employees' reluctance to work with a female. Neither had any reason to believe Quigley initiated the arguments.

Despite a record which shows Quigley's job performance and conduct could not be differentiated from that of other employees, she was singled out for discharge. Even though misconduct is a proper basis for discharge, a discharge for misconduct cannot be discriminatory. McDonald v. Santa Fe Transportation Co., 427 U.S. 273, 283, 96 S.Ct. 2574, 2580, 49 L.Ed.2d 493, 502 (1976) ("The Act prohibits all . . . discrimination in employment, without exception for any group of particular employees, and while crime or other misconduct may be a legitimate basis for discharge, it is hardly one for . . . discrimination."). Discipline must be meted out equally to employees who engage in misconduct. Worthy v. United States Steel Corp., 616 F.2d 698, 702-03 (3d Cir. 1980).

Principles governing proof of discrimination are based on recognition that discriminatory motive will rarely be boldly announced or readily apparent. See Wilson-Sinclair Co., 211 N.W.2d at 140. Based upon the circumstances surrounding Quigley's discharge, Scott's failure to investigate her performance, and the absence of any disciplinary action against the other employees engaging in similar conduct, I would find Quigley proved that her sex was a factor in the employer's singling her out for discharge.

UHLENHOPP, J., joins division I of this dissent.