March 15, 2011 – The exclusive remedy provision of Wisconsin’s Workers Compensation Act (WCA) does not bar the defamation claims of a former employee who alleges defamation occurred shortly after he resigned, the District III Wisconsin Court of Appeals recently ruled.
Gene Anderson served as Barron County’s highway patrol superintendent through November 2007. But he resigned after the county conducted an audit that revealed Anderson’s unit was overcharging the state for routine maintenance and snow removal on state roads.
Two of Anderson’s subordinates prompted the audit after alleging Anderson instructed them to falsely report using equipment that generated a higher reimbursement rate from the state.
After Anderson resigned, Duane Hebert, the county administrator, made statements to local media which served as the basis for Anderson’s defamation claim against Hebert and Barron County (Barron County). For example, Hebert stated Anderson “allegedly cheated the state.”
Wis. Stat. section 102.03(2), the exclusive remedy provision, provides that an employee’s exclusive remedy against an employer is the right to recovery under the WCA.
The county relied on the recent case of Farady-Sultze v. Aurora Medical Center, 2010 WI App 99, 327 Wis. 2d 110, 787 N.W.2d 433 to argue the WCA is the exclusive remedy for defamation claims even if the defamation occurs after termination.
Based on Farady-Sultze, the circuit court granted summary judgment to Barron County, ruling the WCA was Anderson’s exclusive remedy for alleged defamation.
But in Anderson v. Hebert, 2010AP1992 (March 15, 2011), the appeals court reversed, ruling the exclusive remedy provision does not bar Anderson’s defamation claim because the claims arose after Anderson resigned.
In an opinion written by Judge Gregory Peterson, the appeals court rejected Barron County’s argument under Farady-Sultze, concluding the case “does not compel us to conclude the Act’s exclusive remedy provision bars post-termination defamation claims.” The court noted the dismissal in Farady-Sultze was based on lack of evidence that defamation occurred.
Substantial truth and actual malice
The appeals court rejected Barron County’s argument that Hebert’s statements about Anderson were substantially true, and truth is an absolute defense to a defamation claim.
“Anderson admitted it was true that the County began investigating him after discovering discrepancies in maintenance fees charged to the state,” Judge Peterson wrote. “However, Hebert made other allegedly defamatory statements whose truth Anderson has not admitted.”
Finally, the appeals court struck down Barron County’s argument that summary judgment was warranted because Anderson could not prove Hebert made the statements with actual malice.
Although Hebert conceded his status as a limited purpose public figure, which requires the plaintiff to prove the defendant acted with actual malice in making the defamatory statements, the appeals court agreed that genuine issues of material fact still exist.
Noting that a defendant acts with actual malice “when he or she either knows a statement is false or makes the statement with reckless disregard for its truth or falsity,” the court explained that a jury could conclude Hebert acted with actual malice based on the facts in the record.
By Joe Forward, Legal Writer, State Bar of Wisconsin