PUBLISHED
OPINION
COURT OF
APPEALS
DECISION
DATED AND FILED
February
22, 2000
Cornelia G. Clark
Acting Clerk, Court of Appeals
of
Wisconsin
NOTICE
This opinion is subject to further editing. If published, the official version will
appear in the bound volume of the Official Reports.
A party may file with
the Supreme Court a petition to review an adverse decision by the Court of Appeals.
See Wis. Stat. § 808.10 and Rule 809.62.
No. 97-3542
STATE OF
WISCONSIN IN COURT OF APPEALS
DISTRICT
I
Jerold J. Mackenzie,
Plaintiff-Respondent-
Cross-Appellant,
v.
Miller Brewing Company
and
Robert L. Smith,
Defendants-Appellants-
Cross-Respondents,
Patricia G. Best,
Defendant-Cross-Respondent.
APPEAL and CROSS-APPEAL from a judgment and orders of the circuit court for
Milwaukee County: LOUISE TESMER, Judge. Judgment reversed; orders affirmed in
part and reversed in part.
Before Wedemeyer, P.J., Fine and Schudson, JJ.
¶1. SCHUDSON, J.After years of litigation, including a three week jury trial,
this case comes here with a record of more than ten thousand pages, briefs from the parties
totaling more than three hundred pages, and amicus curiae briefs from: the
Human Resources Management Association, the Wisconsin Academy of Trial Lawyers, the
Wisconsin Employment Lawyers Association, Wisconsin Manufacturers and Commerce, and
the United States Equal Employment Opportunity Commission. The issues are many and the
arguments, at times, are intricate. In this decision, we concentrate on the most significant,
dispositive issues. We do so, however, only after carefully considering the entire record, all
the briefs, the oral arguments to this court,1 and the supplemental letter briefs following oral
argument.
I. Introduction-Status On Appeal And Cross-Appeal
¶2. The Miller Brewing Company and Robert L. Smith (collectively,
"Miller") appeal from the judgment, following a jury trial, awarding Jerold J.
Mackenzie more than twenty-five million dollars for what he alleged was intentional
misrepresentation leading him to continue his employment at Miller Brewing. Miller argues
that, under established legal principles, as most recently reiterated in Tatge v.
Chambers & Owen, Inc., 219 Wis.2d 99, 579 N.W.2d 217 (1998)-a case
decided subsequent to the trial court litigation in the instant case-Mackenzie's claims could
not be maintained in tort and, even if they could, Mackenzie failed to prove any of the
elements of intentional misrepresentation. Miller also argues that Mackenzie failed to
establish any basis for the jury's award of punitive damages and, even if he did, the punitive
damages were excessive.
¶3. We need not consider Miller's several substantial arguments challenging
the punitive damages because, we conclude, under Tatge, Mackenzie's
claim for intentional misrepresentation was not actionable in tort. Further, we conclude that
even if Tatge does not preclude Mackenzie's claim as a matter of law,
Mackenzie failed to prove: that Miller misrepresented or concealed anything it had a duty to
disclose; that Miller intended to deceive him; that he relied on any alleged misrepresentation;
or that he was financially damaged as a result of misrepresentation. Accordingly, on the
primary issues on which Miller appeals, we reverse.
¶4. Miller also appeals from the judgment against Smith, following the
same jury trial, awarding Mackenzie $100,000 for tortious interference with a prospective
contract, resulting from what Mackenzie alleged was Smith's effort to prevent him from
being promoted. Miller argues that Smith's conduct-commenting on why he believed
Mackenzie should not be promoted-was privileged and, further, that regardless of any
arguable privilege, Mackenzie failed to prove any interference. Miller is correct and,
therefore, we also reverse the judgment against Smith.
¶5. Mackenzie cross-appeals from two trial court orders. He presents several
arguments challenging the trial court's conclusion that the jury's award of $1,500,000
punitive damages against Patricia G. Best, a Miller Brewing employee, for tortious
interference with his employment relationship, could not be sustained because the jury failed
to award compensatory damages against Best. Mackenzie contends that, given what he views
as the undisputed evidence of compensatory damages caused by Best, the trial court should
have changed the jury's answer on compensatory damages to conform to the proof.
Alternatively, he contends that the inconsistency of the compensatory and punitive damages
verdicts requires a new trial on the issue of compensatory damages against Best.
¶6. Additionally, and alternatively, Mackenzie maintains that, given the
overlapping evidence supporting his claims against Miller and Best, and under the trial
court's jury instruction on punitive damages regarding his claim against Best, the
compensatory damages the jury awarded against Miller Brewing and Smith
support the punitive damages the jury awarded against Best. Finally, Mackenzie
maintains that even if, generally, punitive damages cannot stand in the absence of
compensatory damages, an exception should exist to allow punitive damages here because of
the "inherently damaging" nature of a false complaint of sexual
harassment.
¶7. Concluding that Mackenzie's recoveries against Miller Brewing and Smith
must be reversed, we have left him without any compensatory damages
against Miller Brewing, Smith, or Best. Thus, even if Mackenzie's arguments
about the interplay of the Miller/Best compensatory/punitive damages verdicts otherwise
could have prevailed, the absence of any compensatory damages precludes the
punitive damage award against Best. Therefore, we need not address all of Mackenzie's
arguments challenging the trial court's decision regarding the punitive damages verdict
against Best; some of them simply are not viable given our reversal of the judgments against
Miller Brewing and Smith. Nevertheless, a number of Mackenzie's intriguing theories
survive and still must be addressed. For reasons we will explain, we reject them also and,
therefore, on this aspect of Mackenzie's cross-appeal, we affirm the dismissal of the claim
against Best.
¶8. Mackenzie also cross-appeals from the trial court's order, granting
partial summary judgment to Miller, dismissing his claim for wrongful termination. He
argues that even though he was an "at-will" employee, Miller Brewing could not
terminate him based on allegations of sexual harassment because, he maintains, public policy
precludes the dismissal of an employee unless the sexual harassment allegations are
substantiated. We conclude, however, that Mackenzie failed to establish that he would fall
within the public policy exception for termination of "at-will" employees
articulated in Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561,
573, 335 N.W.2d 834 (1983) ("A wrongful discharge is actionable when the
termination clearly contravenes the public welfare and gravely violates paramount
requirements of public interest.... An employee cannot be fired for refusing to violate the
constitution or a statute."). Indeed, he failed to even allege that he was
"discharged for refusing to violate a constitutional or statutory provision,"
see Bushko v. Miller Brewing Co., 134 Wis.2d 136, 141, 396 N.W.2d
167 (1986), or that he was terminated for complying with a "fundamental and
well-defined" legal duty," see Hausman v. St. Croix Care
Ctr., 214 Wis.2d 655, 669, 571 N.W.2d 393 (1997). Thus, partial summary
judgment was appropriate and, therefore, on this aspect of the cross-appeal, we also
affirm.
II. Factual Background
¶9. Although many additional facts will emerge in our discussion of each issue,
a brief synopsis will help to frame this appeal and cross-appeal.
¶10. Mackenzie worked for Miller Brewing from 1974 until his termination in
1993. Moving up the corporate ladder of what were termed "grade level"
positions, he relocated to Milwaukee for a second time in 1982 when he was promoted to a
grade level 14 position. In 1987, he held a grade level 14 position under the supervision of
Robert Smith.
¶11. In October 1987, Miller Brewing, in the course of reorganizing various
aspects of its distribution and sales services, hired William Glickert who became Mackenzie's
immediate supervisor and took over many of his responsibilities. As a result, Mackenzie
asked Smith whether the reorganization affected his (Mackenzie's) grade level. Mackenzie
testified that Smith assured him that his grade level 14 status was unaffected by the
reorganization. Smith acknowledged that such a conversation may well have occurred and
that he would have so advised Mackenzie because, in fact, the reorganization had not altered
Mackenzie's grade level, salary, or benefits.
¶12. In May 1989, Miller Brewing evaluated the grade levels of hundreds of
employees. As a result, certain job classifications were assigned a higher grade level, others
a lower one, and still others were left unchanged. Ultimately, 835 employees were in job
classifications assigned lower grade levels. Mackenzie was one of them. He and these other
employees were not "downgraded," however, because the reclassifications were
prospective, taking effect only upon the hiring of successors. The current employees were
"grandfathered," thus retaining their grade levels, salaries and benefits.
Mackenzie remained at grade level 14.
¶13. In August 1989, Mackenzie received a memorandum informing him of the
reclassifications of positions under his supervision. He did not, however, receive any
communication informing him that his position was among the many others that had been
downgraded. And he did not ask. Mackenzie testified that he did not inquire whether his
position had been reevaluated because he "didn't see any need" to do so. He
explained, "[I]f I would have been affected I would think that Mr. Smith would have
advised me."
¶14. In August 1992, Miller Brewing decided to modify the
"grandfathered" status of employees who had remained in job classifications that
had been downgraded in 1989. Thus, in an August 17, 1992 memo, Mackenzie was
informed that, effective January 1, 1993, he would be reduced to grade level 13-the grade
level to which his position had been reclassified in 1989. Mackenzie, however, despite being
downgraded to grade level 13, was to retain his salary and benefits, except that he no longer
would be eligible for the stock option program.
¶15. During the period encompassing Mackenzie's intentional misrepresentation
claim-from November 1987 when some of Mackenzie's responsibilities shifted to Glickert, to
January 1993 when Mackenzie's status shifted to grade level 13-two other events occurred
that, at trial, came to be intertwined with each other and with the misrepresentation
claim.
¶16. First, in 1989 and 1990, Mackenzie's secretary, Linda Braun,
complained, first to Miller personnel and, later, in an equal rights legal action, that
Mackenzie had sexually harassed her. Mackenzie testified that he denied most of Braun's
allegations and, when informed that Miller Brewing had settled Braun's claim for $16,000,
said: "I'm sorry you settled. I didn't do anything." Smith, however, testified
that Mackenzie "admitted that his behavior had been inappropriate." And Smith
testified that he warned Mackenzie that any repetition of such conduct would result in
termination; Mackenzie testified that he did not recall any such warning.
¶17. Second, in October 1992, a Miller Brewing task force studying the
performance of its distributors recommended the creation of a new department in the sales
division, the establishment of which would have substantially reduced Smith's
responsibilities. When Smith learned that Mackenzie, who had served on the task force, was
being considered for the position of director of the new department, he advised Tom
Koehler, Vice-President of Sales, and Tom Cardella, the leader of the task force, of what he
deemed to be Mackenzie's management deficiencies. Smith recommended that the new
directorship go to another individual-the one who ultimately received the appointment.
¶18. Finally, later, a third event, ultimately leading to Mackenzie's
termination, played prominently in the trial and, even more prominently, in the media reports
of what came to be known as "the Seinfeld case." In March 1993, Patricia Best,
a Miller distributor services manager who had previously been under Mackenzie's
supervision, reported that Mackenzie had engaged her in inappropriate conversations about
an episode of the Seinfeld television show. She said she was offended when
Mackenzie commented on and later continued to discuss the show's thinly veiled references
to female sexual anatomy. Miller Brewing investigated her report and, shortly thereafter,
fired Mackenzie for "poor management judgment."
¶19. After he was fired, Mackenzie brought four claims: (1) intentional
misrepresentation against Miller Brewing and Smith for failing to inform him that his
position had been downgraded, and for representing that his grade level had not been affected
by the 1987 reorganization; (2) tortious interference with a prospective contract against Smith
for opposing his promotion to the new directorship; (3) tortious interference with contract
against Best for "fraudulently misrepresenting" feeling harassed by their
communication regarding the Seinfeld episode; and (4) wrongful termination, in
violation of public policy, against Miller Brewing for firing him in response to Best's
report.
¶20. Granting Miller Brewing partial summary judgment, the trial court
dismissed with prejudice Mackenzie's wrongful termination claim. The other claims,
however, proceeded to trial and the jury returned verdicts: (1) finding that Miller Brewing
and Smith intentionally made misrepresentations to Mackenzie, and awarding, against Miller
Brewing, $6,501,500 compensatory and $18,000,000 punitive damages, and against Smith,
$1500 compensatory and $500,000 punitive damages (later reduced by the trial court to
$100,000, which Mackenzie accepted); (2) finding that Smith intentionally interfered with
Mackenzie's promotion, and awarding $100,000 compensatory damages; and (3) finding that
Best intentionally interfered with Mackenzie's contract, and awarding $0 compensatory
damages and $1,500,000 punitive damages (later set aside by the trial court).
MILLER'S APPEAL
I. Intentional Misrepresentation
A. Tatge and the duty to disclose
¶21. Mackenzie's intentional misrepresentation claim presented two theories: (1)
that in 1987 Miller misinformed him that the reorganization did not affect his
status; and (2) that in 1989 Miller failed to inform him that his position had been
downgraded.2 Whether a cause of
action flowing from an employment relationship is actionable in tort for misrepresentation
presents a question of law. See Tatge, 219 Wis.2d at 105. We decide
questions of law independently of the trial court's determinations. See Gloudeman v.
City of St. Francis, 143 Wis.2d 780, 784, 422 N.W.2d 864 (Ct. App.
1988).
¶22. Miller, relying on Tatge, first argues that "[a]s a
matter of law, neither Miller [Brewing Company] nor Smith can be liable for intentional
misrepresentation for the alleged 1987 misrepresentation as to Mackenzie's job status or for
not disclosing to Mackenzie that the grade level of his job classification had been changed in
1989."3 Miller is
correct.
¶23. In Tatge, Tatge, an "at-will" employee, had
objected to the non-disclosure/non-compete provisions of a "management
agreement" that modified his job duties and compensation arrangements.
See Tatge, 219 Wis.2d at 102-03. He refused to sign the
agreement only after being assured that his refusal would not affect his employment.
See id. at 103. Ultimately, however, he was fired for refusing to sign.
See id. He brought several claims against his employer and, in a jury
trial, prevailed on his tort claim of negligent misrepresentation. See id. at
104-05. On post-verdict motions, however, the trial court dismissed his claim. See
id. at 105. Tatge appealed, challenging not only the dismissal of the negligent
misrepresentation claim, but also the trial court's dismissal, on summary judgment, of his
wrongful discharge claim. See id. at 101, 105. This court affirmed,
concluding that "a breach of an employment contract is not actionable in tort."
Id. at 105 (quoting Tatge v. Chambers & Owen,
Inc., 210 Wis.2d 51, 53, 565 N.W.2d 150 (Ct. App. 1997)).
¶24. Appealing this court's decision, Tatge contended that the supreme court
should "address his misrepresentation claim under tort law-not as a wrongful discharge
or breach of contract claim under contract law." Id. at 107. As the
supreme court explained, Tatge "advocate[d] this approach by arguing that employers
have an independent duty to their employees to refrain from misrepresentation."
Id. The supreme court, however, refused to take that approach.
Rejecting Tatge's argument, the court declared, "We decline to give our blessing to
such an irreverent marriage of tort and contract law." Id. The
court reiterated that there "`must be a duty existing independently of the performance
of the contract for a cause of action in tort to exist.'" Id. (quoting
Landwehr v. Citizens Trust Co., 110 Wis.2d 716, 723, 329 N.W. 2d 411
(1983)).
¶25. Therefore, as Miller argues, it would seem that Tatge
precludes Mackenzie's intentional misrepresentation claim. After all, the supreme court
explicitly rejected the proposition that, exclusive of the employment contract,
"employers have an independent duty to their employees to refrain from
misrepresentation." Id. Mackenzie argues,
however, that the supreme court's rejection of that proposition was based on the fact that
Tatge's tort claim of negligent misrepresentation was connected to his contract claim of
wrongful termination. He points out that, in Tatge, the supreme court
stated that, under Brockmeyer, "any claim which is dependent
upon a wrongful termination from at-will employment is not actionable in tort."
Tatge, 219 Wis.2d at 108 n.3 (emphasis added). Moreover, in
Tatge, the supreme court declared, "Because it is tied
inextricably to his termination from employment, [the plaintiff's] misrepresentation
claim was properly dismissed by the circuit court." Id. at 108
(emphasis added). And, finally, the supreme court distinguished a case in which "the
alleged misrepresentation was not dependent upon a breach of [the employees'] employment
contract." Id. at 109 n.5.
¶26. Thus, Mackenzie contends, Tatge does not preclude
his intentional misrepresentation claim. After all, he reminds us, his tort claim derives not
from breach of contract/employment termination, but from employment
continuation. So, he argues, Tatge, by repeatedly
emphasizing the inextricable connection between Tatge's tort and contract claims, offers
implicit support for the proposition that where tort and contract claims are separate, both
survive. We conclude, however, that although these Tatge passages,
standing alone, could support Mackenzie's theory, when read in full context they do not save
his claim. We hold that Tatge precludes an employee's tort claim against
an employer for alleged intentional misrepresentation that allegedly induced
continuation of employment.
¶27. Although the supreme court emphasized that, in Tatge,
the misrepresentation was connected to the plaintiff's termination, it did not
otherwise qualify its explicit rejection of the proposition that "employers have an
independent duty to their employees to refrain from misrepresentation."
Id. at 107. Emphatically, and almost as if to anticipate Mackenzie's
argument, the supreme court clarified, "We do not mean to suggest that litigants may
circumvent the holding of this court simply by pleading damages which somehow do not
arise solely from one's termination of employment." Id. at 108 n.4.
And although, obviously, employment termination is distinguishable from
employment continuation, each tort claim connects to an employment contract.
That is, whether, as in Tatge, an employee is claiming that negligent
misrepresentation caused the termination of employment, or, as in the instant
case, that intentional misrepresentation caused the continuation of employment,
each "misrepresentation claim finds its lifeline in the improper performance of an
employment contract." Id. at 107.
¶28. Thus, while in some respects Mackenzie's claim for intentional
misrepresentation may be viewed independently of his claims for wrongful discharge, tortious
interference with prospective contract, and tortious interference with contract, the
independence of his misrepresentation claim is not as absolute as Mackenzie suggests. In
fact, in the trial court, Miller, not Mackenzie, vigorously argued for severance of the three
claims surviving summary judgment and, on appeal, continues to argue that the trial court
improperly joined what actually were divisible claims. Ironically, in the trial court,
Mackenzie successfully responded, in effect, that the claims should be joined because of their
common facts and overlapping themes. Indeed, throughout the trial, and in closing
argument, counsel for Mackenzie not only blended the evidence on the three surviving
claims, but repeatedly and emphatically connected those claims to Mackenzie's termination.
Despite the summary judgment dismissal of the wrongful termination claim, Mackenzie's
counsel continued to pursue the connections among the remaining claims and the termination.
Thus, as actually litigated, all Mackenzie's claims breathed through only one
"lifeline"-Miller's alleged "improper performance of [his] employment
contract." See id.
¶29. Therefore, reduced to its essence, the question simply is whether Miller,
aside from any contractual obligations it may have had, also had "an independent duty
... to refrain from misrepresentation" that induced Mackenzie to continue employment.
See id. We conclude that, under Tatge, the answer is
no.
¶30. Mackenzie, citing numerous cases, maintains that courts have allowed
claims for fraudulent inducement to continue employment.4 Miller responds that "[e]very case
recognizing a tort claim for misrepresentation against an employer and cited by Mackenzie is
premised on misrepresentations made to induce acceptance, rather than
continuance, of employment." Miller is incorrect. Although some of the cases
Mackenzie cited considered circumstances involving inducements to accept employment,
most dealt with circumstances involving inducements to continue employment.5
¶31. Still, a review of the numerous cases cited by Mackenzie, Miller, and the
amicus briefs reveals that while some courts have recognized the tort Mackenzie
proposes,6 others have declined to
do so. Some reason that, absent a special, confidential or fiduciary employer-employee
relationship, employers have no duty, outside their contractual obligations, to disclose
information to at-will employees that could conceivably affect the employees' decisions to
continue employment. See Piekarski v. Home Owners Sav.
Bank, 956 F.2d 1484, 1495 (8th Cir. 1992) ("employer has no duty to
disclose to an employee that he has placed items in his [personnel] file"); Sabet v.
Eastern Va. Med. Auth., 775 F.2d 1266, 1270 (4th Cir. 1985) ("[S]ilence
cannot give rise to liability for fraud in the absence of a duty of disclosure.");
Wilson v. Sysco Food Servs. of Dallas, Inc., 940 F. Supp. 1003, 1014
(N.D. Tex. 1996) ("In the absence of an agreement to disclose, a duty to disclose
arises only where there is some special relationship between the parties, such as a fiduciary
or confidential relationship."); Lehner v. Crane Co., 448 F. Supp.
1127, 1131 (E.D. Pa. 1978) ("[A]n employer-employee relationship does not, in and of
itself, give rise to a fiduciary relationship from which a duty to disclose could be
derived."); see also White v. National Steel Corp., 938
F.2d 474, 490 (4th Cir. 1991) ("[A]ny court-imposed affirmative duty to inform
employees of conditions of employment ... may lead to diminution of West Virginia's at will
doctrine."); Holloway v. Doug Fisher, Inc., 865 F. Supp. 412, 421
(E.D. Mich. 1994) (plaintiff failed to establish that employer-employee relationship
constituted "confidential relationship" giving rise to duty to disclose); Berda
v. CBS Inc., 800 F. Supp. 1272, 1278 (W.D. Pa. 1992) (employer had no duty
to disclose to employees "significant corporate plans," including possibility of
layoffs). For reasons we will explain, we find more persuasive the reasoning reflected in
those decisions declining to recognize the tort Mackenzie proposes.
¶32. The fact that Wisconsin courts have not recognized the duty to disclose on
which Mackenzie premises his intentional misrepresentation claim does not mean that we
could not do so. After all, if Tatge does not preclude Mackenzie's
misrepresentation theory, then the policy rationale he offers, if meritorious, could bring legal
life to his claim. See Ollerman v. O'Rourke Co., 94 Wis.2d 17, 30, 288
N.W.2d 95 (1980) ("Courts have departed from or relaxed the `no duty to disclose'
rule by carving out exceptions to the rule and by refusing to adhere to the rule when it works
an injustice."). We conclude, however, that while at first glance Mackenzie's policy
arguments sail smoothly, they ultimately crash on the reef of reality.
B. Duty to disclose-"a policy
determination"
¶33. No tort liability arises from a failure to disclose information absent a duty
to disclose. See Lecic v. Lane Co., 104 Wis.2d 592, 604, 312 N.W.2d
773 (1981) ("The general rule is that silence, a failure to disclose a fact, is not
misrepresentation unless the nondisclosing party has a duty to disclose that fact.");
see also Ollerman, 94 Wis.2d at 26 (no tort liability arises
from failure to disclose, absent duty to disclose). Whether a duty to disclose exists presents
a question of law. See Ollerman, 94 Wis.2d at 27.
¶34. "[W]hen a court resolves a question of legal duty the court is
making a policy determination." Id. at 27. Quoting Dean Prosser,
the supreme court explained:
"In the decision whether or not
there is a duty, many factors interplay: The hand of history, our ideas of morals and justice,
the convenience of administration of the rule, and our social ideas as to where the loss
should fall. In the end the court will decide whether there is a duty on the basis of the
mores of the community, `always keeping in mind the fact that we endeavor to make a rule
in each case that will be practical and in keeping with the general understanding of
mankind.'"
Id. at 28
(quoted sources omitted). "Whether one has a duty to disclose a fact in a particular set
of circumstances is essentially a policy decision, and it is, therefore, properly decided as a
question of law." Hennig v. Ahearn, 230 Wis.2d 149, 167, 601
N.W.2d 14 (Ct. App. 1999). Thus, resolving the "question of legal duty" in the
instant case, we must examine Tatge not in isolation, but in consideration
of this "interplay" of law and policy.
¶35. Mackenzie, the Wisconsin Academy of Trial Lawyers, and the Wisconsin
Employment Lawyers Association warn against any preclusion of misrepresentation claims.
Understandably, they resist any rule of law that would seem to allow anything less than open
and honest communication between employers and employees. We acknowledge their
legitimate concerns. And yet, while it may seem counterintuitive to ever foreclose a claim
for misrepresentation, we take pains to explain why employers dare not read this decision as
permission to deceive their employees, and why, in this case, the preclusion of Mackenzie's
tort claim for misrepresentation is consistent with sound public policy.
¶36. First, despite the preclusion of such tort claims, most
misrepresentation will meet its match. Depending on the circumstances, criminal
prosecutions and contract claims may be possible. Moreover, market forces remain powerful
and, in some ways, provide protective deterrents to deceit. After all, employers who mislead
their employees risk embarrassing exposure that, ultimately, will reduce their reputations and
profits. Clear economic analysis should lead employers to understand that misrepresentation
will motivate their best employees to resign, and jeopardize their ability to attract qualified
personnel.7
¶37. Second, because of the preclusion of such tort claims, the
at-will employment relationship will retain flexibility that, in a free-market economy,
provides critical advantages to both employers and employees. Emphasizing the
employers' concerns, Miller explains:
Employers cannot possibly anticipate all
the employment-related information that an employee may rely on in deciding to continue
employment; it would be extraordinarily unfair to employers to create a duty to disclose,
where this element of "reliance" arises with hindsight, after the employee has
been discharged. Creating a duty to disclose would cause massive disruption in the
workplace, spawning claims with no reasonable stopping point-there are a whole myriad of
things that employees could argue should have been disclosed, such as a failed merger,
acquisition attempts, falling sales, the CEO's health, and the like. The list is virtually
endless and to impose a duty to disclose on employers would be an intolerable burden.
But employers are not the only
ones who have an interest in flexible, unencumbered at-will relationships. As Wisconsin
Manufacturers and Commerce argues in its amicus curiae brief, "notions of
fundamental fairness" would require an employer-employee duty to disclose to become
"a two-way street":
[W]ould not employees be under a duty
to disclose to employers whenever they were considering quitting, or were interviewing for
other positions? Had it known that an employee was considering leaving, an employer often
would have taken other action, such as shifting job duties. Under such circumstances, are
employees liable to their employers?
¶38. Mackenzie attempts
to deflect Miller's predictions of "massive disruption in the workplace" and
"myriad of things that employees could argue should have been disclosed." He
trims his duty to disclose theory to "the narrow proposition that when an employee asks
an employer for information which the employer knows may affect the employee's decision
to exercise his at-will freedom to quit, the employer conceals the information from the
employee at its peril." Interestingly enough, however, the impracticality-indeed, the
virtual impossibility-of imposing a duty to disclose is apparent from the very scenario
Mackenzie attempted to establish in this case.
¶39. After all, if we accept Mackenzie's "narrow proposition": (1)
the "employer" (that is, the actual person an employee asks for information)
would have to determine which answers to a subordinate's many inquiries "may affect
the employee's decision to exercise his at-will freedom to quit"; (2) the
"employer" would have to remember those inquiries and answers and be
responsible for updating the answers for the duration of the employee's employment; and (3)
the "employer," if transferred, retired, or terminated, would have to record or
pass on that information to any successor who, in turn, would be responsible for updating the
employee. No employee could reasonably expect such continuing disclosure.
See Hennig, 230 Wis.2d at 166 ("[U]nder the [Restatement (Second)
of Torts §551(2)(e) (1977)] approach adopted in Ollerman, the
crucial element in determining whether a duty of disclosure exists is whether the
mistaken party would reasonably expect disclosure.") (emphasis added).
Thus, Mackenzie's "narrow proposition" does not begin to account
for reality-particularly in large businesses, with hundreds or even thousands of at-will
employees, and with employer-employee communication encompassing countless subjects
affecting an employee's decision to continue employment.
¶40. Mackenzie maintains, nonetheless, that at-will employment relationships
thrive in a free market economy only when both employer and employee make their
employment decisions based on accurate and complete information. Once again, with
support from both the Wisconsin Academy of Trial Lawyers and the Wisconsin Employment
Lawyers Association, he proclaims the value of honesty in employer-employee
communication. We echo that proclamation. And yet, once again, as counterintuitive as any
compromise of candor may seem, the analysis of the duty to disclose is not as simple as
Mackenzie suggests.
¶41. For any number of valid reasons, employees, in furtherance
of their personal or professional interests, may choose to conceal
information-illness, pregnancy, disability, job search-from their employers even though their
employers may suffer as a result. And employers, for any number of valid reasons, may
choose to conceal important information from employees. As the Human Resources
Management Association illustrates in its amicus brief:
[A]ssume a company that is in an
extremely dire financial position determines that it will have to layoff approximately twenty
percent of its workforce in order to remain a viable concern. At the same time, the company
is very close to securing a large amount of new business that will help ensure the company's
continued viability. Management believes that without the new business, the company would
cease to exist and all of its employees would lose their jobs.
Management determines that announcing the layoff at that particular time could
jeopardize its ability to secure the new business. It decides to wait a couple of months
before it announces the layoff decision to ensure that the layoff announcement will not
jeopardize the business transaction. Management's decision helps to ensure its continued
operation and the continued employment of a majority of its workforce.
And, as Wisconsin Manufacturers
and Commerce points out, "information which might be of greatest interest to an
employer's competitors would also be that which might arguably be considered material to its
employees' decision to continue to work for the employer (e.g., financial
reversals)."8 Thus,
unquestionably, while honesty is a virtue rewarding both employers and
employees, the nature, timing, and duty of disclosure remain complicated.
¶42. We do not suggest that courts will countenance an employer's
misrepresentations regardless of the contract or circumstances. We recognize that deceit may
set deadly traps, and we are loath to let innocent victims be snared. But the resulting legal
action-whether for breach9 or some
other violation of an employment contract-lies not in tort, but in contract. See
Tatge, 219 Wis.2d at 105-09;10 see also White, 938 F.2d
at 491 ("Broken promises are the substance of contract law and are not to be
shoehorned into an ill-fitting suit of fraud."). The distinction is more than academic.
At the very least, available remedies and potential damages turn on whether the
misrepresentation claim is recognized in contract or in tort. See Dvorak v. Pluswood
Wis., Inc., 121 Wis.2d 218, 220-21, 358 N.W.2d 544 (Ct. App. 1984) (breach
of employment contract is actionable in contract, not tort; therefore, backpay and
reinstatement, not punitive damages, are recoverable).
¶43. Accordingly, we conclude that the creation of an employer's duty to
disclose information potentially affecting an employee's decision to continue employment
would undermine sound public policy. It would reduce the at-will employment flexibility
that is so valuable to both employers and employees. It would be virtually impossible to
implement and enforce. It would leave both employers and employees forever guessing at
the limits of their responsibility and potential liability. See generally Kelli
T-G. v. Charland, 198 Wis.2d 123, 130, 542 N.W.2d 175 (Ct. App. 1995)
("virtual impossibility of defining a sensible starting or stopping point" precludes
tort cause of action on public policy grounds).11
C. Mackenzie's evidence
¶44. Miller also argues that Mackenzie failed to prove any of the elements of
intentional misrepresentation. Our conclusion, under Tatge, could obviate
the need to address this argument. Here, however, while we have rejected Mackenzie's
Tatge interpretation, we also have acknowledged the three passages in
Tatge that, arguably, may allow more latitude than we have recognized,
as well as the case law that does recognize the tort of fraudulent inducement to continue
employment. Thus, we go on to explain that even if Mackenzie's misrepresentation claim,
by virtue of being independent of his wrongful discharge claim, were not precluded by
Tatge, it still would fail-for lack of evidence of any of the elements of
intentional misrepresentation.
¶45. The supreme court has articulated the elements of intentional
misrepresentation: "[F]irst, there must be a false representation of fact; second, it must
be made with intent to defraud and for the purpose of inducing another to act upon it; third,
such other person must rely on it and thereby be induced to act, to his own injury or
damage." Lundin v. Shimanski, 124 Wis.2d 175, 184, 368 N.W.2d
676 (1985).
¶46. "When reviewing jury verdicts on appeal, we view the evidence
most favorable to the verdict and affirm if there is any credible evidence upon which the jury
could have based its decision." Id.12 Deference to the jury's verdict is even
greater when it has been approved by the trial court. See Staehler v.
Beuthin, 206 Wis.2d 610, 617, 557 N.W.2d 487 (Ct. App. 1996). Here, after
a thorough review of the parties' briefs and their specific record references, after extensive
questioning of counsel at oral argument, and after a painstaking review of the trial record
(based on the oral arguments and supplemental briefs), we conclude that Mackenzie failed to
present evidence establishing any of the elements of intentional misrepresentation.
¶47. As we have explained, Mackenzie's theory is that, in 1987, Smith
misinformed him that the reorganization that had occurred after Glickert was hired did not
affect his job status and that, in 1989, Smith failed to inform him that his position had been
downgraded. At oral argument, Mackenzie's counsel clarified that even though Mackenzie
had not proven that Smith misinformed him of anything in 1987, and even though Mackenzie
never asked Smith or anyone else about his job status in 1989, the jury still could have
"believed": (1) Mackenzie's position had been downgraded in 1987;
(2) Smith knew that, and misinformed Mackenzie in 1987; and/or (3) even if
Mackenzie's position had not been downgraded in 1987,
and even if Smith had not misinformed him in 1987, Smith intentionally
deceived him, in 1989, by not informing him that his position had been
downgraded in 1989.
¶48. Throughout Mackenzie's questioning of trial witnesses, closing
arguments, briefs, and oral arguments to this court, his theory, tenuous at best, slips and
slides between the events of 1987 and 1989. Although one might expect that such a lengthy
trial transcript would reveal countless passages from which Mackenzie's purported proof
would emerge and, therefore, that an earnest review of the record would inevitably lead to
evidence that, even if slight, was sufficient, such is not the case. Indeed, as implicitly
conceded in his briefs, and explicitly conceded at oral argument, Mackenzie can point to only
a few portions of testimony that give even a hint of support to his theory. And even those
fail under careful analysis. Like a shaky swingdancer searching for the right step,
Mackenzie stumbles between the events of 1987 and 1989 and, ultimately, provides no
evidence proving intentional misrepresentation.
1. False representation of fact
¶49. The record provides absolutely no evidence that Mackenzie's position was
downgraded in 1987. It establishes only that, in 1987, Mackenzie's
responsibilities were affected after Glickert was hired. Mackenzie testified that, in 1987, he
asked Smith: "Does [the reorganization] affect my Grade Level? It's half my area. Is
this going to get me downgraded?" Smith, Mackenzie testified, answered
"no," that "it's not going to affect you at all."
¶50. The only evidence on which Mackenzie's appellate brief relies
to suggest that Smith's response was false is Smith's answer to a written interrogatory,
utilized by Mackenzie's counsel in examining Smith at trial. Smith acknowledged, at trial,
that in answering the interrogatory, he stated that "at the time Glickert joined
Miller," he (Smith) "informed Mr. Mackenzie that his position had been
grandfathered," thus implying that the downgrading of Mackenzie's position actually
occurred in 1987. Mackenzie's appellate brief, however, neglects to quote
Smith's undisputed trial testimony surrounding that exchange, clarifying that, in answering
the interrogatory, he simply had been mistaken about the chronology; he had mixed up the
events of 1987, "when Glickert came to Miller," and 1989, when "[t]he
grandfathering issue came into play."
¶51. The only other passage on which Mackenzie relies is, at best, utterly
ambiguous and, under careful analysis, it provides absolutely no support for Mackenzie's
theory. Referring to a 1992 conversation in which Smith informed him that his position had
been downgraded years before, Mackenzie testified:
A: Mr. Smith told me that this
[downgrading] was due to when Mr. Glickert came in to his area, and they transferred a
large number of my people to his responsibility. That that caused my rating to be
downgraded.
Q: And that would have been what year?
A: 1987.
(Emphasis added.) What does
that italicized "that" refer to-when Glickert came into Smith's area; when
Mackenzie's rating was downgraded? Contextually and grammatically, there seems to be no
way to tell. But logically, and most importantly, nothing in this portion of Mackenzie's
testimony, or any other evidence, connects the italicized "that" to anything Smith
did or said to misrepresent or conceal anything.
¶52. Indeed, the only logical reading of this passage precludes any connection
to what Smith did or said and, therefore, counters Mackenzie's theory. After
all, in answering, "1987," Mackenzie obviously was not suggesting that Smith
informed him in 1987 of the downgrading; Mackenzie's theory was that Smith
failed to do so. And if, in answering, "1987," all Mackenzie was
saying was that that was the year Glickert came into Smith's area, the testimony would be of
no consequence; the year of Glickert's arrival was never in dispute. Thus, this apparently
ambiguous testimony, logically analyzed, is either Mackenzie's inconsequential statement of
Glickert's year of arrival, or nothing more than Mackenzie's opinion, supported by no
evidence, that he had been downgraded in 1987.
¶53. Notably, nothing else, anywhere in the trial record,
established that any downgrading occurred until 1989 when, it is undisputed, Mackenzie's
position and those of hundreds of other employees were downgraded. Indeed, Mackenzie
testified that he "learned that [his position] had been reevaluated in 1989, and that Mr.
Smith had signed off on it in 1989 that it would be a 13 not a 14." Miller Brewing
records confirmed that Mackenzie's position was downgraded, effective May 17, 1989. In
closing argument, Mackenzie's counsel referred to "1989, when [Mackenzie] was
downgraded on the books to a 13," and to Mackenzie being "grandfathered in
'89." And on appeal, Mackenzie concedes that "the downgrade ... was
formalized" not in 1987, but in 1989, and that "[i]ndisputably Smith knew
Mackenzie was downgraded in 1989."
¶54. Mackenzie fully concedes that, in 1989, he never asked Smith or anyone
else whether his position had been downgraded as a result of the reevaluation of hundreds of
positions. Noting that he was asked to advise his subordinates of their downgrading,
Mackenzie never suggests that Miller was attempting to conceal the downgrading, generally,
or that, had he inquired, Miller would have denied him the information, specifically.
See McCoy v. Spelman Mem'l Hosp., 845 S.W.2d 727, 732 (Mo. Ct.
App. 1993) (regarding employee's fraud allegation, employer had no duty to inform
employee of reasonably ascertainable facts concerning his employment)
(emphasis added); see also Null v. K & P Precast, Inc.,
882 S.W.2d 705, 708 (Mo. Ct. App. 1994). Mackenzie also acknowledges that, even after
the downgrading of his position in 1989, he was grandfathered so that he retained his grade
level, salary and all benefits until, as he was notified in an August 1992 memo, effective
January 1, 1993, he would be reduced to grade level 13 and would lose his eligibility for
stock options. Thus, according to the evidence, Smith's answer to Mackenzie in 1987-that
while Mackenzie's responsibilities had been affected, his grade level status was unaffected by
the reorganization-was true in 1987 and remained true in 1989, even after the downgrading
of Mackenzie's position.
¶55. Therefore, at most, Mackenzie may be correct in believing that, in 1989,
his position, among others, may have been downgraded due, at least in part, to the altered
responsibilities brought about by the reorganization of 1987. But that simply does not
constitute any evidence that Smith lied to him in 1987, or concealed anything
from him in 1989. See Chitwood v. A.O. Smith Harvestore Prods., Inc.,
170 Wis.2d 622, 631, 489 N.W.2d 697 (Ct. App. 1992) (Regarding intentional
misrepresentation, "[g]enerally, the false representation must relate to present or
preexisting facts and cannot be merely unfulfilled promises or statements of future
events.").
2. Intent to deceive
¶56. Even assuming Smith misinformed him in 1987 (that the
reorganization did not affect his job status) or failed to inform him in 1989 (that his position
had been downgraded), Mackenzie offered no evidence that Smith or anyone else at Miller
Brewing did so in an effort to induce him to continue employment. In fact, in closing
argument, Mackenzie's counsel contended that while Smith "made a horrible
mistake" in his communication with and treatment of Mackenzie, he was a
"decent enough fella." As Miller argues:
There was no evidence that Smith or
Miller believed, or had reason to believe, that Mackenzie ever considered leaving Miller or
needed an inducement to remain. To the contrary, Mackenzie admits that at no time did he
consider leaving Miller, including after he admittedly learned of the grade level change.
There also was no evidence that Smith or Miller believed, or had reason to believe, that
Mackenzie would choose to leave Miller if he knew that his successor would be a grade level
13, rather than a grade level 14.
Mackenzie maintains, however,
that "the jury could draw the common sense conclusion that a demotion would prompt
a reasonable person in Mackenzie's position with his ambition and talents, to look for work
elsewhere, and that Smith feared this." But Mackenzie provides no evidentiary basis
for this fear. In fact, as we will explain, a "common sense" assessment of the
evidence refutes even the most speculative sense that Miller intended to deceive
Mackenzie.
¶57. Mackenzie offered evidence establishing that he was a valuable employee
with exceptional computer skills and, therefore, that Miller Brewing certainly would have
wanted his continued employment. But his evidence also belies the notion that Miller,
starting in 1987 and continuing through 1989 and until August 1992, somehow managed to
make a series of intentional misrepresentations in order to induce Mackenzie to stay. The
contradictions are obvious:
(1) On the one hand, Mackenzie maintains that he was virtually irreplaceable; on the
other hand, he contends that Miller downgraded his position (and grandfathered him, thus
gaining no financial benefit from the downgrading as long as he remained in his position),
despite knowing that if he found out his position had been downgraded, he would
leave.
(2) On the one hand, Mackenzie maintains that the downgrading was the "kiss
of death" that destroyed his potential for advancement-at Miller or elsewhere; on the
other hand he contends that, despite the downgrading, he was in line for a significant
promotion, torpedoed only by Smith's opposition.
(3) On the one hand, Mackenzie maintains that Miller singled him out, from among
hundreds of downgraded employees, in order to deceptively induce him to continue
employment; on the other hand, as his attorney ultimately argued to the jury, "[t]hey
were out to get this guy," subsequently terminating him based on unsubstantiated
complaints of sexual harassment.
"Common sense," based on the evidence, confirms that Mackenzie failed
to prove any intent to deceive.
3. Reliance
¶58. Mackenzie offered no evidence that he relied, to his detriment, on any
misrepresentation. His theory, simply, was that in 1987 or 1989, had he known his position
had been downgraded, he could have sought other employment but, by 1992, having aged
and occupied a downgraded position for several years, he was less marketable. Mackenzie,
however, never stated that he would have sought other employment. He testified that he
"never considered leaving Miller Brewing Company for another job." He offered
no evidence of a job opportunity ignored or an offer declined due to his misconception of his
grade level status.
¶59. To prevail on his intentional misrepresentation claim, Mackenzie would
have had to have shown that he justifiably relied on a misrepresentation of fact. See
Williams v. Rank & Son Buick, Inc., 44 Wis.2d 239, 245-46, 170
N.W.2d 807 (1969). Once again, Mackenzie failed to prove anything; his evidence was
speculative at best. Speculation is not a proper basis for a jury decision. See Foseid v.
State Bank of Cross Plains, 197 Wis.2d 772, 791, 541 N.W.2d 203 (Ct. App.
1995) (verdict cannot be based on "conjecture and speculation"); Cudd v.
Crownhart, 122 Wis.2d 656, 662, 364 N.W.2d 158 (Ct. App. 1985) (verdict
cannot be based on "mere speculation").
4. Damages
¶60. Mackenzie offered no evidence of any other employment he might
have obtained between 1987 and 1993. In fact, his damages evidence consisted entirely of
what he summarized in a trial exhibit titled, "Lost Salary and Benefits Due to
Termination." (Emphasis added.) He offered nothing providing any causal
connection between Miller's alleged misrepresentations and the termination
damages he introduced at trial.
¶61. Thus, at oral argument, Miller pounded away at Mackenzie's failure to
prove misrepresentation damages-the difference between what Mackenzie earned
at Miller Brewing between 1987 or 1989 and 1993, and what he would have earned
elsewhere during the same period. At oral argument, Mackenzie barely responded. Even
more telling, in his supplemental letter brief to this court, Mackenzie, while first attempting
to tie termination damages to his misrepresentation claim, ultimately contended only that
"[t]he jury reasonably could have inferred that but for Miller's deceit, [he] would have
secured employment elsewhere at a marketable age and received wages and benefits
comparable to those provided by Miller." (Emphasis added.) Obviously,
if what Mackenzie would have received elsewhere would have been comparable
to what he actually did receive at Miller Brewing, he suffered no financial loss prior to his
termination. Essentially, therefore, Mackenzie has offered nothing to counter Miller's
contention that he proved no misrepresentation damages. See Charolais Breeding
Ranches, Ltd. v. FPC Sec. Corp., 90 Wis.2d 97, 109, 279 N.W.2d 493 (Ct.
App. 1979) (unrefuted arguments deemed admitted).13
II. Tortious Interference With Prospective Contract
¶62. Regarding Mackenzie's second cause of action, Miller argues that
"Smith cannot be liable for tortious interference with Mackenzie's hoped for promotion
because there was no proof of interference," and that "Smith's conduct was
privileged as a matter of law." Miller is correct.
¶63. "There can be tort liability for interference with a contract terminable
at will," id. at 104, and our courts do recognize "a cause of
action for the intentional interference with a prospective contractual relation,"
Cudd, 122 Wis.2d at 657-58. Interference alone, however, does not
establish the tort; the interference must be "improper." See Liebe v. City
Fin. Co., 98 Wis.2d 10, 15, 295 N.W.2d 16 (Ct. App. 1980). Further,
"the transmission of truthful information is privileged, does not constitute improper
interference with a contract, and cannot subject one to liability for tortious interference with
a contract" or prospective contract. See id. at
13.
¶64. Generally, in the context of discussing whether one is
"privileged" to communicate information that interferes with a prospective
contract, we "substitute[] a concept of `propriety' for privilege and provide[] that `one
who "intentionally and improperly" interferes with the performance of a
[prospective] contract is liable.'" See Hale v. Stoughton Hosp.
Ass'n, 126 Wis.2d 267, 281, 376 N.W.2d 89 (Ct. App. 1985) (quoted source
omitted). Thus, in this opinion, in evaluating Miller's claim of "privilege," we
write in terms of whether Smith's conduct was proper or improper. Determining whether
interference is "improper," we consider:
(a) The nature of the actor's
conduct;
(b) The actor's motive;
(c) The interests of the other with which the actor's conduct interferes;
(d) The interest sought to be advanced by the actor;
(e) The social interests in protecting the freedom of action of the actor and the
contractual interest of the other;
(f) The proximity or remoteness of the actor's conduct to the interference; and
(g) The relations between the parties.
Cudd, 122
Wis.2d at 660-61. Here, we focus on these seven criteria by logically arranging them in two
groups: (A) Smith's conduct, motive, intent, and relation to Mackenzie, and the proximity of
Smith's conduct to the decision not to promote Mackenzie; and (B) Mackenzie's interest in
being promoted, and the social interests in protecting the freedom of action of Smith and the
contractual interest of Mackenzie. We conclude that Mackenzie failed to provide any
evidence of improper conduct that would constitute tortious interference with his prospective
contract.
A. Smith's conduct, motive, intent, and relation to Mackenzie, and
the proximity of Smith's conduct to the decision not to promote Mackenzie
¶65. In 1992, Mackenzie served on a Miller Brewing task force which, he
explained, was established "to evaluate the efficiency of Miller's distributors, and see if
they could determine ways of increasing [their] performance." Tom Cardella headed
the task force and presented its recommendations to Miller's president and executive steering
committee, comprised of three vice-presidents: Dick Strup, Tom Koehler, and Robert Smith.
Among other things, the task force proposed a new department, the creation of which would
transfer personnel and responsibilities from Smith to Koehler. Koehler, with the assistance
of Robert Schmitz, Personnel Services Manager, had primary responsibility for selecting the
director of the new department.14
¶66. Smith was upset-with the proposed shift of his personnel and
responsibilities to the new department and, he emphasized, with the fact that he had not been
consulted before the task force presented its recommendations. Additionally, Smith
disagreed with the task force recommendation of Mackenzie as director of the new
department. Smith, however, voiced his most vigorous protests on the former subjects, not
on Mackenzie's possible selection. Schmitz testified that "[Smith] was upset with the
fact that he wasn't aware of the recommendations [that part of his area of responsibility
would have been transferred to Mr. Koehler's area of responsibility]." Smith
confirmed Schmitz's account, testifying: "I certainly had a discussion with Tom
Cardella. ... I chewed him out because I felt that the way that [the task force] presented this
was unprofessional, and inappropriate, and really irritated me, because it had a major impact
on my organization and people who worked for me."
¶67. While Smith acknowledged his irritation with the task force process and
recommendations, he disclaimed comparable ire over Mackenzie's possible promotion.
Smith testified:
Q: Wasn't it a fact that you were very
upset that Jerry Mackenzie was going to be appointed, at least it was recommended that he
be appointed to the level of director, and that would have taken him completely away from
you? And that he would have been out of your area of control? Isn't that what you didn't
like, the fact that Mackenzie was recommended for that position?
A: No.
Q: Did you support Mackenzie getting the job?
A: I don't know that I did.
Q: Well, if you were so upset that you made an issue about it, as you have told
us, whichever way you want to say it, what did you do about it? Did you just get upset and
that was it?
A: I had nothing to do with it.
Q: Did you support somebody who had worked for you for as long as Mr.
Mackenzie worked for you, and that is, from 1984 [until] 1992, when you heard that that
task force was recommending him to become a director, did you say, good, Jerry's got his
chance now of being director? Did you not do that or not? [sic]
A: I didn't have any comment on it.
Q: But you certainly had a comment that you were upset with the way it was
reported though.
A: Yes, I was.
Q: And part of what you were upset [about] was not only the way it was reported,
but also the fact that Jerry Mackenzie was recommended to take over a new division as a
director, correct?
A: I don't think that's accurate.
¶68. Notwithstanding Smith's
disclaimer, however, Mackenzie points to evidence establishing that Smith opposed his
appointment. Schmitz testified:
Q: One of the
recommendations made to the committee was that Mr. Mackenzie head up the new
department as director, would that be correct?
A: That was a suggestion that was made in the context of the formal
recommendations.
Q: Did Mr. Smith object to you? Did Mr. Smith discuss with you, at any time,
any reservations he had regarding Mr. Mackenzie assuming such a position?
A: Yes.
Q: When did he do that?
A: I think he brought it up briefly in our [en]counter directly after the board
meeting, but we just -
Q: Go ahead.
A: We discussed it at that point.
Q: What did he say, if anything, about Mr. Mackenzie, at that time?
A: I believe, if I remember correctly, he was upset that I made a recommendation
on staffing the structure that we recommended, and that I was out of line making that type of
recommendation without specifically talking to other senior members, and human resources,
and that maybe Jerry wasn't the best candidate for that position.
Q: Did he explain why he thought that?
A: Not in that meeting.
Q: Did he subsequently explain that?
A: Yes.
Q: And when did he do that?
A: I believe it was within a couple of days of the day we had the recommendation
meeting.
Q: What did he say to you, at that time?
A: He basically re-expressed his displeasure at the way we expressed the
recommendations.
Q: What did he express about Mr. Mackenzie two days later,
approximately?
A: That he felt Jerry was not the right person to run the entire structure that we
recommended.
Q: Did he give a reason for that belief or opinion?
A: Yes, he did.
Q: What was that reason?
A: He felt that Jerry was not a strong enough manager.
Q: Did Mr. Smith give any explanation for that statement?
A: He didn't go into detail.
Additionally, Schmitz testified that
Cardella told him that Smith opposed Mackenzie's appointment. So, clearly, the record
includes testimony to support Mackenzie's premise that Smith opposed his appointment and
communicated that opposition to others. The record, however, contains absolutely no
evidence that Smith, in so communicating, did anything improper.
¶69. Smith had been Mackenzie's supervisor; he was in a legitimate position
to comment on Mackenzie's managerial abilities. See Singleton v. Itson,
383 S.E.2d 598, 600 (Ga. Ct. App. 1989) ("Divulging truthful information and
expressing critical personal opinions about a co-employee's work are not wrongful or
unlawful acts and those acts cannot, therefore, give rise to liability for tortious interference
with contractual relations ...."). Smith was not alone in opposing Mackenzie's
promotion. Paul Zielinski, Director of Distribution Management at the time in question,
testified at length about what he perceived to be Mackenzie's serious management style
deficiencies. When Zielinski learned that Mackenzie was being considered for the
directorship, he conveyed his concerns to Smith and Cardella. Additionally, Schmitz
testified that he (Schmitz) told Cardella and Koehler that he "didn't think that
[Mackenzie] was a good selection." Schmitz explained that although he recommended
Mackenzie to head a division under the new director, he "didn't believe
that Jerry Mackenzie had sufficient management skills to be able to form and manage"
the new department. And Schmitz also testified that although Koehler had indicated that he
"felt that, technically, Jerry was qualified for that position," Koehler was
"not overly comfortable with [Mackenzie's] managerial style and
skills."15 Finally, Schmitz
testified:
Q: As far as you know, Mr.
Schmitz, was Bob Smith instrumental, in any way, in Jerry Mackenzie's not getting the
director level position?
A: Not as far as I know.
Nor is that surprising. After all,
according to the undisputed evidence, Smith was but one of several expressing reservations
about Mackenzie's appointment and Smith, unlike Koehler and Schmitz, who both had
misgivings about Mackenzie, was not in a position to make the final selection. Thus,
Mackenzie's assertion, in his brief to this court, that he "would have routinely become
the new director but for Smith's objection" is baseless.
¶70. At trial, Mackenzie conceded that he was "never present at any
meeting or discussion when Mr. Smith made any statements about whether or not [he] should
be the director of this newly created department." Thus, Smith's conduct, established
by the evidence, reduces to little more than saying, according to Schmitz's testimony, that
Mackenzie "was not a strong enough manager." Therefore, while Mackenzie
points to evidence disputing what others viewed as his management deficiencies, he utterly
fails to establish that Smith communicated anything that was false. See
Liebe, 98 Wis.2d at 13 ("[T]ransmission of truthful information ... does
not constitute improper interference with a contract ...."). He barely responds to
Miller's assertion that he "has not challenged the honesty of Smith's limited
comments." See Charolais, 90 Wis.2d at 109 (unrefuted arguments
deemed admitted). And while Mackenzie may believe, as his counsel ultimately argued to
the jury, that Smith and others were "out to get him," he fails to suggest any
possible motive for Smith to do so. After all, whether Mackenzie or someone else became
the new director, Smith's greater grievance would remain-either way, he stood to lose
personnel and responsibility. See Harman v. La Crosse Tribune, 117
Wis.2d 448, 455-57, 344 N.W.2d 536 (Ct. App. 1984) (determining whether defendant had
good faith privilege in defense against action for interference with employment relationship,
court considers defendant's intent and whether facts upon which plaintiff relies
"reasonably support the inferences he draws").
B. Mackenzie's interest in being promoted, and the social
interests in protecting the freedom of action of Smith and the contractual interest of
Mackenzie
¶71. Courts have been reluctant to recognize an at-will employee's interest in a
promotion and have protected a supervisor's freedom to comment on a subordinate's
qualifications for advancement. For example, based on public policy grounds, the Arizona
Court of Appeals refused to recognize the tort of wrongful failure-to-promote.
See Mintz v. Bell Atl. Sys. Leasing Int'l, Inc., 905 P.2d 559,
562 (Ariz. Ct. App. 1995). The court, quoting Ludwig v. C&A Wallcoverings,
Inc., 960 F.2d 40, 43 (7th Cir. 1992), echoed the federal court's
concerns:
Recognizing a retaliation tort for actions
short of termination could subject employers to torrents of unwarranted and vexatious suits
filed by disgruntled employees at every juncture in the employment process. And why stop
at demotions? If ... a demotion raises the same policy concerns as a termination, so too
would transfers, alterations in job duties, and perhaps even disciplinary proceedings. The
potential for expansion of this type of litigation is enormous.
Mintz, 905
P.2d at 562; see also Ramsey v. Rudd, 272 S.E.2d 162, 164
(N.C. Ct. App. 1980) (supervisor not liable for tort of malicious interference with
employment contract where his truthful report of subordinate's early departure from work led
to subordinate's discharge); Singleton, 383 S.E.2d at 600 (employee not
liable for tortious interference with employment contract where "[d]ivulging truthful
information and expressing critical personal opinions about a co-employee's work" led
to employer's independent determination that the information warranted discharge of the
co-employee).
¶72. Although, in this case, we need not determine whether Wisconsin
recognizes the tort of wrongful failure-to-promote, we do consider, under the
Cudd criteria, the "social interests" implicated by Mackenzie's
tortious interference claim. Accordingly, we observe, even if Mackenzie had offered
evidence that Smith's conduct was improper, he still would have faced a high hurdle.
Mackenzie failed to account for important, practical policy concerns, fairly expressed by
Wisconsin Manufacturers and Commerce:
An employee must have the
freedom to critique and honestly evaluate the performance of co-employees for promotions
and job positions in order to properly serve the employer. It is difficult enough for an
employer to receive honest, candid evaluations of co-employees without raising the risk of
personal exposure. The prospect of liability would create a chilling effect, intimidating
employees from giving accurate opinions, and would handicap many Wisconsin employers.
Moreover, it would open the door to challenges by disgruntled candidates and scrutiny of the
motives and good faith of the employee who gave the evaluation.
¶73. In an action for intentional
interference with a prospective contract, we will not allow a jury's verdict to stand where
there are "no facts or inferences from any facts that could lead a jury to reasonably
conclude" that the defendant's conduct was improper and where, ultimately, any such
conclusion "would be mere speculation." See Cudd, 122
Wis.2d at 662; see also Foseid, 197 Wis.2d at 778-91
(holding that trial court was correct in overturning jury verdict in action for intentional
interference with prospective contract where jury "`base[d] its findings on conjecture
and speculation'") (quoted source omitted).
¶74. Having reviewed the entire trial transcript and, in particular, having
fastidiously focused on every record reference Mackenzie cites in support of his response to
Miller's assertion that "there was no proof of interference," we can locate no
support for Mackenzie's claim. Smith, Mackenzie's former supervisor, opposed Mackenzie's
proposed promotion and said so. Koehler, with assistance from Schmitz, and apparently
based, in part, on what Smith told them, decided not to promote Mackenzie. That's it; the
rest is pure speculation. Once again, Mackenzie's proof proves to be no proof at
all.16
MACKENZIE'S CROSS-APPEAL
I. Tortious Interference With Contract-Punitive Damages
¶75. In his third cause of action, Mackenzie claimed that Best
"improperly induced" Miller Brewing to terminate him "by fraudulently
misrepresenting ... that she felt harassed by [his] ... conversation with her regarding the
Seinfeld program," and, further, that she "had no purpose or desire independent
of intentionally causing [his] termination ... by exerting moral pressure on Miller in
fraudulently misrepresenting ... that she felt harassed" by the conversation. On this
claim, although the jury awarded Mackenzie $0 compensatory damages, it did award him
$1,500,000 punitive damages. On post-verdict motions, however, the trial court denied
Mackenzie's request to change the jury's answer to the compensatory damages question,
concluding:
The jury heard a great amount of
evidence against Patricia Best. Clearly, it concluded in its award of punitive damages its
disapproval of her conduct toward Jerold Mackenzie.
Equally clear, however, is the fact that the jury did not believe that her conduct
contributed to the compensatory loss of Jerold Mackenzie.
The trial court then set aside the
punitive damage award because the jury had not awarded Mackenzie any compensatory
damages against Best. See Tucker v. Marcus, 142 Wis.2d 425, 439, 418
N.W.2d 818 (1988) ("[P]unitive damages are not available where there has been no
`award' of actual damages.").
¶76. On cross-appeal, Mackenzie presents several related, alternative
arguments: (1) the trial court erred in refusing to change the jury's answer to conform to
what he claims was the undisputed evidence that "Best caused [him] compensatory
damages in the amount of $4,771,056"; (2) the inconsistency of the compensatory and
punitive damages verdicts requires a new trial; (3) the compensatory damage awards
against Miller Brewing and Smith support the punitive damages award
against Best; and (4) the punitive damages should stand, even in the absence of
compensatory damages against Best, because of the "inherently damaging" nature
of Best's conduct. We reject Mackenzie's arguments.
A. The jury's answers / consistency of verdicts
¶77. This court will not disturb a damage award if there is a reasonable basis
for the fact finder's determination. See Cords v. Anderson, 80 Wis.2d
525, 552-53, 259 N.W.2d 672 (1977). Further, in reviewing such determinations, we view
the evidence in the light most favorable to support the verdict. See id. at
553. Moreover, making that review, we are "`aided by [the trial court's] analysis of
the evidence and appraisal of the award,'" id. (quoted source
omitted), but will review the entire record "as a matter of first impression" where
a trial court provides no reasons for its determination, see
id.17
¶78. Mackenzie first argues that "undisputed" evidence established
that Best's conduct caused him compensatory damages and, therefore, that the trial court
erred in refusing to change the jury's answer. Mackenzie maintains that while Best disputed
the amount of damages, she tacitly conceded a certified public accountant's
testimony that her conduct caused damages of at least $4,771,056, if not the $9,101,222 the
accountant said was Mackenzie's full loss of earning capacity as a result of his termination.
Best responds that "Mackenzie's assertion that it was undisputed that [she] caused [him]
damages in the amount of $4,771,056 is absurd." We agree.
¶79. As Best argues, the defendants contested all the damages
throughout the trial, "strenuously disput[ing] both Mackenzie's damages evidence and
Mackenzie's attempt to attribute any of those damages to any of the
defendants' conduct." (emphases added). In fact, the only evidence to which
Mackenzie refers to support his contention is out of context and, as a result, completely
misleading. Mackenzie cites the testimony of Fredric Kolb, the economics professor the
defense retained to review the analysis prepared by Ricky Steiner, the accountant Mackenzie
retained to calculate his economic damages. Mackenzie contends that Professor Kolb
challenged only the amount of damages calculated by Mr. Steiner. But what
Mackenzie fails to acknowledge, in his brief to this court, is that Professor Kolb essentially
disclaimed any knowledge of the underlying merits of any of Mackenzie's claims or theories.
Professor Kolb merely evaluated Mr. Steiner's analysis and, indeed, prefaced his testimony
by explaining that he "accept[ed], for purposes of [his (Kolb's)] evaluation, the
assumptions contained within the plaintiff's damages analysis."18
¶80. Thus, we must move on to consider whether a reasonable basis exists for
the jury's determination that while Best's conduct warranted punitive damages, her conduct
caused Mackenzie no compensatory damages. Carefully comparing Mackenzie's and Best's
theories, we see a reasonable basis.
¶81. Mackenzie argues, alternatively, that the compensatory/punitive damage
verdicts either cannot reasonably be reconciled, or that, when reconciled, they support the
punitive damages award. In support of the latter alternative, Mackenzie suggests a plausible
possibility: the jury, having already awarded compensatory damages on Mackenzie's
misrepresentation claims against Miller Brewing and Smith, might have simply concluded
that it need not award additional compensatory damages against Best in order to award
punitive damages against her. Thus, Mackenzie emphasizes, the jury might have believed it
was following the trial court's instructions:
In answering the damage questions, be
careful not to include or duplicate in any answer amounts included in any other answer made
by you.... Punitive damages may be awarded in addition to compensatory damages if you
find that the defendant's conduct was outrageous.... You may not, however, award
punitive damages unless you have awarded compensatory damages.
(Emphasis added.) The
instructions, Mackenzie correctly notes, did not delineate whether the compensatory damages
the jury had "awarded" had to have been pegged specifically to Best. He argues,
therefore, that the jury must have concluded that it could award him punitive damages
against Best based on its compensatory damages verdicts against Miller Brewing and
Smith.
¶82. While possible, Mackenzie's theory is not the only plausible one. The
jury, for all we know, might have viewed things differently. Reasonably, it could have
distinguished Best's conduct from Miller Brewing's response to her complaint. Indeed, such
a distinction would have been consistent with Mackenzie's original claim-that
although his conduct was inappropriate, Best had not really felt as offended as she claimed,
and she and Miller Brewing overreacted. After all, as we have observed, Mackenzie's cause
of action against Best was not that she had falsely accused him of having inappropriate
conversations about the Seinfeld episode, but rather, that she "fraudulently
misrepresented ... that she felt harassed" by their conversations. In the jury's
estimation, therefore, any resulting compensatory damages may have come from
Miller Brewing's conduct in terminating Mackenzie, not from Best's conduct in reporting the
incident.
¶83. Was the jury drawing this distinction? We do not know. Clearly, the
trial court could have refined the instructions or submitted clarifying questions. See
Westfall v. Kottke, 110 Wis.2d 86, 97, 328 N.W.2d 481 (1983) ("`When
a jury returns a verdict containing errors, inconsistencies or lack of compliance with the
directions of the special verdict and instructions, the trial court may direct the jury's attention
generally to the prospective error and require it to deliberate further to correct any errors
that may exist.'") (quoting John A. Decker & John R. Decker, Special
Verdict Formulation in Wisconsin, 60 Marq. L. Rev. 201, 272 (1977)). But
Mackenzie's insistence that a new trial on compensatory damages is required, based on
Westfall's declaration that "when a verdict is inconsistent, such
verdict, if not timely remedied by reconsideration by the jury, must result in a new
trial," id. at 98, misses the mark.
¶84. In Westfall, the supreme court held that "the
inconsistency on the face of the verdict was irreconcilable."
Id. at 100 (emphasis added). Here, by contrast, as we explained, verdicts
that may at first seem inconsistent can be reconciled. In Westfall, counsel
moved for a new trial based, inter alia, on the inconsistency of the verdicts.
See id. at 92. Here, by contrast, although Mackenzie seeks a
new trial on compensatory damages now, he did not do so in the trial court. See
id. at 99 (Waiver of claims arising out of allegedly inconsistent verdicts may be
appropriate where "the waiver does not result in a change of the prevailing party as
found by the jury."). We also note that Mackenzie did not object to the instructions
which, he now asserts, formed the basis for what he contends were the jury's inconsistent
verdicts. See Wis. Stat. §805.13(3) (1997-98) ("Counsel may object
to the proposed instructions or verdict on the grounds of incompleteness or other error,
stating the grounds for objection with particularity on the record. Failure to object at the
[instruction and verdict] conference constitutes a waiver of any error in the proposed
instructions or verdict.").
¶85. We need not determine what the jury was thinking. It is enough to
recognize that the jury reasonably could have returned verdicts finding that Best's conduct
justified a punitive award, but that she did not cause Mackenzie any compensatory damages.
If so, the jury's punitive damages award against Best, while legally superfluous, was not
logically inconsistent with its compensatory damages verdict. See Frey v. Alldata
Corp., 895 F. Supp. 221, 224 (E.D. Wis. 1995) (although jury's answer
"assessing punitive damages after finding zero compensatory damages ... is
superfluous, it is legally impossible, not logically inconsistent"). Accordingly, we
conclude that the trial court did not err in refusing to change the jury's answer and, further,
that because the verdicts can be reconciled, no new trial on compensatory damages is
required.
B. Compensatory damages / punitive damages
¶86. Mackenzie argues that, even in the absence of a compensatory damage
award specifically denominated against Best, the punitive damage award against her can be
upheld because of the compensatory damages awards against Miller Brewing and Smith. In
support of his argument, Mackenzie has offered several intriguing theories based on the
interplay of the evidence and claims in this case. By reversing the compensatory damages
awards against Miller Brewing and Smith, however, we have effectively removed much of
the foundation for Mackenzie's theories.
¶87. In Tucker, the supreme court, in a 4-3 decision,
declared:
We hold today that punitive damages
are not available where there has been no "award" of actual damages. ... An
"award" represents a remedy recoverable in accordance with an order for
judgment. It is not enough that actual damages may have been "suffered" or
"sustained" in order for punitive damages to be awarded. This holding is firmly
rooted in long-standing principles of Wisconsin law.
Tucker, 142
Wis.2d at 439 (footnote omitted). The supreme court has carved out only one possible
exception, though even that involved an award of punitive damages accompanying other
"nominal" damages. See Jacque v. Steenberg Homes, Inc.,
209 Wis.2d 605, 613-14, 621, 563 N.W.2d 154 (1997) (concluding that "consider[ing]
the individual and societal interests implicated when an intentional trespass to land
occurs," nominal damages "may support a punitive damage award").
¶88. Mackenzie argues that the reasoning of Jacque should
extend to this case because the "individual and societal interests" just as strongly
support the availability of punitive damages for a false complaint of sexual harassment.
After all, he contends, "[b]oth individuals and society have significant interest in
deterring employees from making allegations of sexual harassment with the intent of
interfering with the accused's contractual relation with his or her employer." We
conclude, however, that notwithstanding society's obvious interest in deterring false
complaints of sexual harassment, Mackenzie's argument is overwhelmed by competing
considerations.
¶89. Nothing in Tucker or Jacque offers
the slightest indication that false complaints of sexual harassment should form the basis for
an exception to the "firmly rooted" principle precluding punitive damages in the
absence of compensatory damages. See Tucker, 142 Wis.2d at 439.
While Mackenzie, relying on Jacque, argues that such an exception would
be justified by the substantial consequences attending such a false complaint,
Jacque, if it suggests anything, suggests otherwise.
¶90. In Jacque, the supreme court concentrated very
specifically on the special nature of the harm caused by trespass to land-a harm, obviously,
wholly distinguishable from that resulting from a false complaint of sexual harassment.
See Jacque, 209 Wis.2d at 615-22. The supreme court also
focused on the societal response to trespass to land, commenting that "[p]unitive
damages have the effect of bringing to punishment types of conduct that, though oppressive
and hurtful to the individual, almost invariably go unpunished by the public
prosecutor." Id. at 620. Thus, the supreme court clearly was
influenced by the fact that, generally, trespass to land, despite the significant harm it causes,
is not prosecuted and, when it is (as it was in that case), the penalty is modest. See
id.
¶91. What, then, does Jacque imply about Mackenzie's
theory? It may imply very little. Drawing any meaningful conclusions from a comparison
between Jacque and the instant case is difficult, of course, because a
trespass to land and a false complaint of sexual harassment have almost nothing in common.
Nevertheless, Jacque may be very instructive because the supreme court,
in analyzing whether to carve out an exception to Tucker, was concerned
not only with the nature of the harm, but also with the nature of society's
response. While Mackenzie, understandably, would have us focus on the serious harm
that can come from a false complaint, the supreme court, it seems, would have us also
analyze how society responds. When we do so, we can only conclude that Jacque's
rationale does not extend to produce an exception to Tucker
for false complaints of sexual harassment.
¶92. Lawful use of land and trespass to land are almost always easy to
distinguish. Clearly, our laws seek to encourage the former and discourage the latter.
Moreover, deterring and punishing trespass certainly will not discourage lawful land use.
True and false complaints of sexual harassment, on the other hand, may be very difficult to
distinguish. And while our society would always want to discourage false complaints, our
laws have not located the certain means to do so without improperly discouraging citizens
from bringing true complaints. As the United States Equal Employment Opportunity
Commission emphasizes in its amicus curiae brief, American society, in a
succession of legislative actions and judicial decisions reflecting a growing sensitivity to the
powerful disincentives to complain of sexual harassment, has been providing progressively
greater protection for those who do. And although no Wisconsin statute or case law has
established an absolute privilege shielding complainants from lawsuits such as
Mackenzie's, a recent decision, establishing a conditional privilege, echoes the
EEOC's concerns.
¶93. In Wolf v. F & M Banks, 193 Wis.2d 439, 534
N.W.2d 877 (Ct. App. 1995), in which a bank president brought claims, including tortious
interference with contract, against two employees as a result of their respective roles in
bringing a sexual harassment complaint against him, this court declared that the plaintiff's
claim, to survive the "conditional privilege" accompanying such a complaint,
would have to be supported by evidence of "ill will or an improper motive towards the
plaintiff." See id. at 462. Further, we emphasized: "To not
recognize the conditional privilege in such a setting would frustrate an employer's attempt to
investigate and correct employee-related problems in the workplace. It would also chill an
employee's willingness to freely and openly discuss the matter in such a setting."
Id. at 460-61; see also Zinda v. Louisiana Pac. Corp.,
149 Wis.2d 913, 921-22, 440 N.W.2d 548 (1989) ("[C]ertain conduct which would
otherwise be actionable may escape liability because the defendant is acting in furtherance of
some interest of societal importance, which is entitled to protection even at the expense of
uncompensated harm to the plaintiff."); Liebe, 98 Wis.2d at 15
("Not all intentional interference with contract is actionable."). Even viewed
most sympathetically, Mackenzie's evidence falls short of establishing Best's "ill will
or an improper motive."
¶94. As the EEOC reminds us, "Mackenzie's real gripe is not with Best,
who simply reported an incident of sexual harassment (truthfully or otherwise), but with
Miller, which terminated Mackenzie's employment." In this regard, it is important to
keep in mind, once again, that although Mackenzie disputed certain details of Best's account
of their conversations about the Seinfeld episode, he did not disagree with her
essential story. And although Mackenzie maintained that Best had maliciously feigned
umbrage and subsequently embellished her allegations, his assertion that "Best
intentionally and without justification caused [him] to be escorted forever from the Miller
premises" is hyperbolic.
¶95. The undisputed evidence established that Best confronted Mackenzie about
her displeasure over their Seinfeld conversations, and that she discussed the
matter with her superior who, in turn, insisted that it be referred to the Miller officials
responsible for reviewing such incidents. The undisputed evidence also established,
however, that Best said she did not intend to file a sexual harassment complaint, and that she
attempted to dissuade Miller officials from pursuing the matter. No evidence supports
Mackenzie's assertion that Best intentionally caused his discharge.19 With no proof of "ill will" or
"improper motive," Mackenzie's proof fails to cross the Wolf
threshold. See Wolf, 193 Wis.2d at 462.
¶96. Finally, even if the jury reasonably inferred that Best was untruthful-both
in her account of her reaction to the Seinfeld conversations and in her other
allegations involving Mackenzie-the jury still awarded Mackenzie $0 compensatory damages
against her. Without compensatory damages, the punitive damages award could not stand.
And, in light of society's interest in encouraging complainants to report sexual harassment,
we do not carve out an exception to the Tucker preclusion of punitive
damages in the absence of compensatory damages. Accordingly, on this aspect of the
cross-appeal, we affirm the trial court's dismissal of Mackenzie's claim.
II. Wrongful Termination
¶97. In his fourth cause of action, Mackenzie claimed that Miller Brewing
wrongfully terminated his employment by discharging him "in response to the informal
complaint/charge of Best that she felt harassed by [his] March 19, 1993 conversation with
her regarding the Seinfeld program," even though "Miller did not believe that
[Best's complaint] ... was cause to terminate [him]." He claimed that Miller Brewing
terminated him because "Miller believed that the termination ... was necessary to avoid
or limit Miller from future liability for complaints/charges of harassment." Granting
partial summary judgment, the trial court dismissed with prejudice Mackenzie's wrongful
termination claim. Mackenzie cross-appeals the dismissal of his claim.
¶98. Summary judgment standards and methodology have been stated in
countless cases and need not be repeated here. See Caulfield v.
Caulfield, 183 Wis.2d 83, 91, 515 N.W.2d 278 (Ct. App. 1994). Our review
of a grant of summary judgment is de novo. See Green Spring Farms v.
Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816 (1987).
¶99. Mackenzie concedes that his wrongful termination cause of action is not
"currently recognized by Wisconsin law." In fact, even in his complaint,
Mackenzie candidly stated that "[t]his cause of action is supported by a good faith
argument for an extension, modification and/or reversal of existing law." We,
however, are not at liberty to extend, modify, or reverse existing law as Mackenzie desires,
particularly in light of the supreme court's decision in Bushko.
¶100. In Bushko, the plaintiff, an employee of Miller
Brewing Company, claimed that Miller fired him for complaining "about Miller's
policies in three areas-plant safety, hazardous wastes and `honesty.'"
Bushko, 134 Wis.2d at 138. The trial court granted summary judgment
to Miller Brewing, but we reversed in an unpublished decision, concluding, inter
alia, that terminating an employee-even an at-will employee-for exercising free speech
in support of employee safety contravened public policy as declared in
Brockmeyer. See Bushko, 134 Wis.2d at 140. The
supreme court reversed, explaining:
In Brockmeyer, 113
Wis.2d at 572-73, 335 N.W.2d 834, we held:
"We have concluded that in the interests of employees,
employers and the public, a narrow public policy exception should be adopted in Wisconsin.
Accordingly, we hold that an employee has a cause of action for wrongful discharge when
the discharge is contrary to a fundamental and well-defined public policy as evidenced by
existing law."
However, we went on to state with specificity in
Brockmeyer as follows:
"We intend to recognize an existing limited
public policy exception. An employer may not require an employee to violate a
constitutional or statutory provision with impunity. If an employee refuses to act in an
unlawful manner, the employer would be violating public policy by terminating the employee
for such behavior." Id. at 573, 335 N.W.2d 834. (Emphasis
added.)
The court of appeals incorrectly held that activity merely
consistent with a public policy provides a basis for a wrongful discharge cause of action.
Brockmeyer requires that the discharge be for refusing a command to
violate a public policy as established by a statutory or constitutional provision.
Bushko, 134
Wis.2d at 140-41. Additionally, the supreme court explained that "[t]he court of
appeals incorrectly made the employer's intent in the discharge a material fact in stating why
the motion for summary judgment should not have been granted."
Id. at 141.
¶101. In Bushko, the supreme court concluded that, under
Brockmeyer, in order to survive summary judgment, an employee must
"allege and attest that he was discharged for refusing to violate a constitutional or
statutory provision." Id.; cf. Winkelman v. Beloit
Mem'l Hosp., 168 Wis.2d 12, 15-16, 483 N.W.2d 211 (1992) ("Where a
fundamental and well-defined public policy is evidenced by an administrative rule, a
discharge for an employee's refusal to violate that public policy is actionable."). In
Hausman, the supreme court broadened the exception to also encompass
situations where an employee is terminated because he or she complies with a
"fundamental and well-defined" legal duty, Hausman, 214
Wis.2d at 669 (noting that "public policy of protecting nursing home residents from
abuse is fundamental and well-defined," and holding that where employee has
affirmative legal duty "to prevent abuse or neglect of nursing home residents and the
employee fulfills that obligation by reporting the abuse, an employer's termination of
employment for fulfillment of the legal obligation exposes the employer to a wrongful
termination action").
¶102. Mackenzie did not "allege [or] attest that he was discharged for
refusing to violate a constitutional or statutory provision," see
Bushko, 134 Wis.2d at 141, or that he was terminated for complying with a
"fundamental and well-defined" legal duty, see Hausman, 214
Wis.2d at 669. Thus, regardless of Miller Brewing's alleged intent, and regardless of the
public policy considerations Mackenzie invokes, the trial court correctly granted Miller
Brewing partial summary judgment dismissing Mackenzie's wrongful termination claim.
Accordingly, on this aspect of Mackenzie's cross-appeal, we also affirm.
By the Court.-Judgment reversed; orders affirmed in part and
reversed in part.
Recommended for publication in the official reports.
¶103. FINE, J. (concurring). Despite the length of the trial, the
submissions to this court, and the lead opinion, and despite the amount of money involved,
this is a simple case. I join in the decision announced by the lead opinion, and in those parts
of its rationale consistent with what follows.
¶104. 1.Mackenzie's intentional-misrepresentation tort claim against
Miller. Jerold L. Mackenzie has no intentional-misrepresentation tort claim against
Miller Brewing Company. Tatge v. Chambers & Owen, Inc., 219
Wis.2d 99, 579 N.W.2d 217 (1998), recognizes that an employee complaining about
something arising out of or related to the employer/employee relationship is relegated to
whatever contract rights there might be between the parties-the employer has no tort duty to
the employee in connection with the employer/employee relationship. See
id., 219 Wis.2d at 107-108, 579 N.W.2d at 220-221. Stated another
way, an at-will employee, which Mackenzie concededly is, may not use tort-duty as a
surrogate contract. See ibid.; see also
Atkinson v. Everbrite, Inc., 224 Wis.2d 724, 728-730, 592 N.W.2d 299,
301-302 (Ct. App. 1999). Accordingly, I agree that we must reverse the judgment founded
upon Mackenzie's claim in tort.
¶105. 2.Mackenzie's tort claim against Smith. I join in the lead
opinion's decision and analysis of this issue.
¶106. 3.Mackenzie's tort claim against Best. I join in the lead
opinion's decision and analysis of this issue.
¶107. 4.Mackenzie's wrongful-termination claim against Miller. I
join in the lead opinion's decision and analysis of this issue.
¶108. WEDEMEYER, P.J. (concurring in part; dissenting in
part). I, respectfully dissent in part for reasons procedural, substantive and
fundamental from the lead opinion reversing the jury. I concur with the lead opinion's
conclusion that Mackenzie failed to provide any evidence of improper conduct that would
constitute tortious interference with his prospective contract with Miller and, even if he had,
Smith's conduct was privileged as a matter of law. I also concur with paragraph 8 of the
lead opinion, wherein we affirm the partial summary judgment dismissal of Mackenzie's
claim based on wrongful termination. Now, I set forth my reasons for dissenting.
A.Sufficiency of the Evidence to Support Intentional Misrepresentation
Claim.
¶109. I first address the procedural aspect of my dissent. When reviewing a
sufficiency of evidence issue post-verdict, we shall not reverse a trial court's decision on the
issue unless the court is clearly wrong in assessing the evidence. A trial court is
"clearly wrong" when there is no credible evidence supporting the jury's finding
or in overturning a jury verdict which is supported by any credible evidence. See
Weiss v. United Fire & Cas., 197 Wis. 2d 365, 389-90, 541 N.W.2d 753
(1995). Deference to the jury's verdict is even greater when it has been approved by the
trial court, which is the procedural posture in which we find this appeal. See Staehler
v. Beuthin, 206 Wis. 2d 610, 617, 557 N.W.2d 487 (Ct. App. 1996). When
applying this standard, we focus on the record evidence and any reasonable inferences that
may be drawn therefrom, not on arguments of counsel or their briefs, as helpful as these
items may be. We now apply this standard of review to the record.
¶110. Among the many issues raised on this appeal and cross-appeal, Miller
and Smith contend that the evidence is insufficient to prove any of the essential elements of
intentional misrepresentation.20
The lead opinion agrees with this contention. Therefore, a review of the basis for the lead
opinion, as compared to the content of the total record, is in order. Whether there is support
in the record for the jury's verdict, finding that intentional misrepresentation occurred, will
depend, in large part, on the existence of any credible evidence to support reasonable
inferences to uphold the verdict.
¶111. The lead opinion proffers four reasons to support its conclusion that
there was no false representation of fact: (1) the record provides absolutely no evidence that
Mackenzie's position was downgraded in 1987; (2) an admission by Smith to Mackenzie in
1992 that Glickert's hiring by Miller, the subsequent transfer of personnel from his
supervision to Glickert, and the assumption of some of Mackenzie's former responsibilities
caused his downgrading, was an ambiguous statement; (3) Mackenzie's grade-level status was
unaffected by the reorganization; and (4) Mackenzie's belief that his position may have been
downgraded due to altered responsibilities by the reorganization in 1987, does not constitute
"any" evidence that Smith lied to him in 1987 or concealed anything from him in
1989. Each posited basis will be addressed in turn.
¶112. The first basis for the lead opinion is the absence of any evidence that
Mackenzie's employment position was downgraded in 1987. Among the instructions given to
the jury was the definition of the evidence that they could consider. It consisted of the
testimony of the witnesses given in court, both on direct and cross-examination, deposition
testimony presented during trial, and exhibits received in the trial record. The court also
instructed the jury that it was not necessary that every fact in this trial be proved directly by
a witness or an exhibit. A fact may be proved indirectly by other facts or circumstances
from which it usually and reasonably follows according to human experience. We can
presume the jury followed these instructions. In question one of the verdict, the jury was
asked to answer, "Did Robert L. Smith make a representation of fact at any time, that
Jerold J. Mackenzie's grade level was not affected by the 1987 reorganization?" The
inquiry was open-ended timewise; i.e., did Smith at any time represent a fact
that Mackenzie's grade level was not affected by the 1987 reorganization.
¶113. The lead opinion claims that the only evidence which suggests that
Smith's response was false was Smith's answer to a written interrogatory cited during trial
wherein Smith stated that he informed Mackenzie that his position had been grandfathered,
implying that the downgrading had actually occurred in 1987. At trial, however, Smith
claimed that he was mistaken in his dates and the date should have been 1989, which is when
the grandfathering issue came into play. In the lead opinion's view, this corrected the
discrepancy. Maybe. Maybe not.
¶114. The jury heard from Mackenzie that, in 1987, Smith stopped by
Mackenzie's office to inform him that Glickert had been hired and what his responsibilities
would be. This reorganizational development concerned Mackenzie and he asked Smith:
"Does that affect my grade level? It's half my area. Is this going to get me
downgraded?" Mackenzie testified that Smith responded:
[I]t's not going to affect you at all.
Don't worry about it.... you're very important to the company. You're making a good
contribution. I really want you to help Mr. Glickert learn the Miller ways, to get
comfortable at Miller. You know the ropes. They're a little different over at Budweiser
probably, so I want you to spend some time with him and help him.... quite frankly ...
there's a lot of things that [need to] be done in distributor services and you haven't had the
attention or the time to focus on that. So you'll have time to focus on that now.
¶115. Smith had no specific
recollection of the 1987 meeting, but presumed he would have met with Mackenzie and
explained to him the impact of the reorganization. There is more in the record than a mere
implication as suggested by the lead opinion. Under cross-examination, Smith responded to
the following questions:
Q Did you have more than one meeting
or discussion with Mr. Mackenzie regarding the fact that he had been grandfathered?
I know we talked about the period of time around '87.
But now we're up to 92. Do you recall more than one meeting with Mr.
Mackenzie regarding grandfather status?
And your answer was, I don't recall a specific meeting or meeting dates.
Question: Do you recall more than one meeting?
Answer: Again, if I spoke to him, at this point in time, I'm presuming it was
likely I spoke to him back in 1987, at the time of that organization change. In both instances
my practice would be to tell him the impact on his Grade Level.
Contrary to the lead opinion's
contention, there is additional testimony in the record to place at issue precisely what
occurred in 1987 or in 1992. It was then for the jury to decide who should be believed and
whose testimony should be accorded more probative value. The jury's verdict supplies the
answer. There is a reasonable basis in the record for the answer.
¶116. The second basis for the lead opinion's conclusion that there was a lack
of proof is its belief that an admission by Smith to Mackenzie in 1992 that Glickert's hiring
by Miller, and the sequential transfer of personnel from his supervision to Glickert's, and the
assumption of some of Mackenzie's former responsibilities caused his downgrading, was an
ambiguous statement. The relevant testimony which Mackenzie argues supports his claim,
but which the majority debunks, reads:
A Mr. Smith told me that this
[downgrading] was due to when Mr. Glickert came in to his area, and they transferred a
large number of my people to his responsibility. That that caused my rating to
downgraded.
Q And that would have been what year?
A 1987.
¶117. The lead opinion totally
discounts this testimony maintaining that the word "that" is ambiguous because it
could either refer to 1987 and to when the downgrading occurred or, to when Glickert came
into Smith's area bringing about the reorganization that led to the downgrading in 1989.
Assuming ambiguity, the lead opinion then concludes that the latter reading is the most
logical and supported by the evidence. If one assumes the testimony was ambiguous, the
majority committed procedural error by arrogating to itself the role of the finder of fact, here
the jury. Once "ambiguity" is present, if at all, it is the task of the jury to
determine which inference it deems appropriate to draw from the testimony presented.
See RTE Corp. v. Maryland Cas. Co., 74 Wis. 2d 614, 621,
247 N.W.2d 171 (1976).
¶118. The third basis for the lead opinion's conclusion that the evidence was
insufficient is the fact that, although the position that Mackenzie occupied was downgraded to
level 13, he retained all the benefits of level 14. This conclusion is not entirely correct, and
is misleading as borne out by the record. The testimony clearly reflects that Mackenzie
made no secret about his career goal at Miller. Pure and simple, he aspired to be a
management director. He had slowly but consistently progressed to a grade level 14
employee. He was one level below his goal.21 Directors were level 15 and above. A level
14 employee was entitled to the pay range of the status, executive dining privileges,
first-class air travel, and eligibility for stock options in the parent company, Philip Morris.
Even though the grandfathering practice permitted Mackenzie to retain his salary and most
perks when Smith approved the level 13 downgrade, Mackenzie was removed from the grade
level which, in the natural progression of events, would have allowed him to achieve a
directorship. No individual who had ever been downgraded from a level 14 or higher had
ever returned to his or her original grade. On August 17, 1992, Mackenzie was informed by
an inter-office correspondence that "you were reclassified and `grandfathered' at the
grade level 14 in a job evaluated at grade level 13 due to an organizational realignment
and/or restructuring." The same day, Mackenzie spoke to his supervisor, Zielinski,
about the content of the letter. The questions and answers during Zielinski's testimony at
trial reveal the following:
Q Did not Jerry Mackenzie then come
and talk to you and was very upset about learning the information that was contained in the
letter ...?
A Yes, he was.
....
Q Sure. Because one of the things Mr. Mackenzie told you, when he said he was
really upset, was that -- ... Mackenzie said to you was he was upset about being
grandfathered, that the goal he had established for himself as director was now farther apart
than he realized ... and that he felt he was not aware that he had been grandfathered, and
that an opportunity to perhaps make a choice in his career earlier had not been allowed to
him. That's what he told you.
A Those are the sentiments he expressed, yes.
....
Q He told you that he lost an opportunity to make a choice in his career because
it had not been allowed to him since he didn't know about it, right?
A Yes.
Q He told you that he was now farther away from his goal of being a director
because now his position was a 13.
A Correct.
Q And that nobody had told him he had been grandfathered.
A Yes.
¶119. On August 19, 1992, Smith
summoned Mackenzie to his office to explain the notice Mackenzie had received on August
17, 1992. Smith informed Mackenzie that effective January 1, 1993, he would no longer be
grandfathered. It is for this reason that the jury heard the following testimony from
Mackenzie:
Q Now, in 1987 you testified that you
approached Mr. Smith about how the Glickert coming was going to affect you.
A Yes, I did.
Q Had you been told that your position was going to be reevaluated, just
reevaluated for a determination of an appropriate Grade Level, what would you have done if
you had been told that?
A I would have looked at my options for employment someplace else.
Q Why?
A Because if they were going to downgrade me in my position, that's a demotion.
And I wouldn't be in the front running, or in the running really at all for a promotion, so I
would be -- I would be stuck where I was. I would be sealed off. So I would look
somewhere else to be able to get my career back on track.
¶120. Thus, the jury had before it
evidence of the total effect of his job reclassification, not just the narrow view as portrayed
by the lead opinion of the same pay and perks. From this evidence, it is not unreasonable
for the jury to conclude that the job classification position Mackenzie occupied had, in fact,
been downgraded, even though he retained some of the advantages of the previous level
position.
¶121. Lastly, the lead opinion concludes that Mackenzie's belief that his
position may have been downgraded due to altered responsibilities by the reorganization in
1987, does not constitute "any" evidence that Smith lied to him in 1987 or
concealed anything from him in 1989. I disagree.
¶122. Mackenzie presented his evidence of intentional misrepresentation to the
jury. Whether he expressed what happened to him and the sequence of events in terms of a
"belief" or otherwise is not relevant. The judgment of the jury on the
misrepresentation claim, to a large extent, depended upon how the jury assessed Mackenzie's
or Smith's credibility, and their respective versions of what happened between 1987 and
1992. The essence of Mackenzie's misrepresentation claim can be encapsulated in his
testimony about his meeting with Smith in August 1992, after he had been informed about
his status:
A I learned that what I had believed
back in 1987, that I was not going to be affected, and for all of that time up until 1992 that
I'd been betrayed, I'd been lied to.
....
A Because he told me it would not affect me. It would not affect your Grade
Level. It's not going to affect you, Jerry, you're making a contribution, don't worry. He's
my boss. He's a vice-president.
¶123. Smith, on the other hand, on
cross-examination, displayed a very elusive memory. Although Mackenzie was one of only
five managers who reported directly to Smith, and whose work product reflected upon
Smith's own performance evaluation, Smith could not remember the number or content of
meetings that related, by his own admission, to matters of vital personal concern to one of
his managers. In addition, he found himself caught in a contradiction as to what he earlier
admitted telling Mackenzie but, at trial, he backtracked and claimed he was in error.
Mackenzie claimed that in 1989 he was never told about his reclassification, and did not
learn about it until August 17, 1992.
¶124. Smith, although he could not remember the specifics of any meeting
with Mackenzie, nevertheless insisted that Mackenzie was in error in claiming he had never
been informed in 1989. The first question on the verdict that the jury had to answer was not
time-specific as to when a misrepresentation of fact may have occurred. Because the jury
was instructed that it need not ignore matters of its common knowledge and its observations
and experiences in the affairs of life under the evidence, the affirmative answer to the first
question is readily understandable. The second question whether the "representation
was untrue" was a credibility call. From the above recitation, it was not unreasonable
if the jury did not believe Smith and chose rather to draw inferences from the record that
reasonably could be drawn; i.e., that Mackenzie's account of what happened was more
acceptable than that of Smith. Smith's statement to Mackenzie in 1987 "it's [the
reorganization] not going to affect you at all" has a broad sweep to it and is all
encompassing. Even the lead opinion admits that Mackenzie's responsibilities were affected
when Glickert was hired. It is not too attenuated to reasonably infer that reduced
responsibilities shall call for reevaluation, reclassification and downgrading. Further, the
jury heard testimony from both the chief executive officer of Miller, John MacDonough, and
Mackenzie's last immediate supervisor, Zielinski, that Mackenzie should have been told
about the downgrading.22 There
is sufficient evidence in the record to support the jury determination.
¶125. The lead opinion concludes that, even if Smith misinformed Mackenzie
in 1987 or failed to inform him in 1989, no evidence was offered that Smith did so in an
effort to induce him to continue his employment with Miller. According to the lead opinion,
Mackenzie maintains that the jury could draw the common sense conclusion that a demotion
would prompt a reasonable person in his position to look for work elsewhere, and that Smith
was concerned about losing well-qualified individuals, thereby supplying the reasonably
inferred motivation for intent to deceive for work continuation.
¶126. Mackenzie was extremely skilled in applying computer technology to the
sales marketing and distribution of Miller products. He conceived of and created a
computerized mapping project for distributors. He co-developed a project called
"AIMS" that involved the use of hand-held computers to conduct market surveys
of Miller distributors. His work on this project was the basis for being nominated to receive
the prestigious Chairman of the Board of Philip Morris award. The long hours he devoted to
his assignments were well-noted.
¶127. In annual evaluations from 1982 to 1990, he was rated "exceeds
performance." His job performance enhanced Smith's performance evaluation. Even
after his employment had been terminated, he was retained as a consultant, and Miller
refused to allow him to work for a Canadian competitor. As mentioned earlier, Smith
considered Mackenzie a very important contributor to the brewery. With all of this evidence
before it, plus Smith's questionable performance as a credible witness, it is not unreasonable
for the jury to infer the existence of the intent to deceive.
¶128. The lead opinion also sets forth three circumstances to demonstrate
contradictions in Mackenzie's claim that the misrepresentation was made with intent to
deceive. I quibble not with this analysis. But again, the error of the lead opinion's way is
stepping into the shoes of the finder of fact. It was for the jury to resolve any apparent
contradictions. It did so. An appeals court ought not retry the evidence, as I believe the
lead opinion has done. See Holz v. Busy Bees Contracting, Inc., 223
Wis. 2d 598, 600, 589 N.W.2d 633 (Ct. App. 1998). The author of the lead opinion writes
that Mackenzie offered no evidence that he relied to his detriment on any misrepresentation.
Earlier in this dissent, there is set forth excerpts of the evidence demonstrating what Smith
told Mackenzie after he specifically asked what impact Glickert's arrival and the
reorganization would have on his status. "It's not going to affect you at all. Don't
worry about it," responded Smith. Smith tells him he is important to the company.
He is making a contribution. Smith was his boss, and a vice-president. What more does a
person need, in order to reasonably rely, other than the affirmative assurances of his
vice-president. With these words of comfort, Mackenzie did not act unreasonably when
other people under him were being reclassified because he had been given the assurances of
his boss: "Don't worry!" As observed by the trial court, Mackenzie was
"lulled" into believing he was on an upward mobility tract. Mackenzie's
executive search expert supplied evidence regarding the effect the passage of five years had
on his marketability. Even his last immediate supervisor, Zielinski, was not aware that the
position Mackenzie occupied had been downgraded until 1992.
¶129. The lead opinion concludes that Mackenzie offered "nothing"
to prove misrepresentation damages. Mackenzie, on the other hand, argues that, based upon
the evidence, the jury reasonably could have decided:(1) being downgraded was the
"kiss of death" at Miller for promotion purposes; (2) had he truly known he was
downgraded, he would have had the opportunity to pursue his upward career with another
company, and would have earned upward to $6,000,000 until retirement age; and (3) he lost
that opportunity because of his age at the time he was finally told the truth.
¶130. Mackenzie presented evidence that he was not told the truth about his
employment status from 1987 through August 1992. There is evidence in the record that had
he been told the truth about information he specifically requested from Smith, he would have
known his future advancement was foreclosed and he would have sought other opportunities.
There is evidence in the record that no one who had been downgraded at Miller ever
returned to, or was promoted beyond, his or her original grade. There is evidence that
Mackenzie was unable to secure employment, even though he hired an executive recruiter
and was searching for a job. There is evidence as to what his salary and benefits would be
at levels 13, 14 and 17. There is expert testimony that, based upon his age range between
the years 1987-1992 and his executive level, his job marketability was imperiled by not being
able to pursue other career opportunities, and that he suffered a complete earning capacity
loss which would not have occurred had he been told the truth. Contrary to the lead
opinion's efforts to recast the evidence, there is more than enough evidence from which a
jury could reasonably conclude that had Mackenzie been given a truthful answer to his
inquiry in light of his superior's knowledge of his career goals, he would have sought
employment elsewhere and would have earned the equivalent compensation, testified to by
experts, that he would reasonably have earned at Miller had he stayed until
retirement.
B.Substantive Claim: Whether an Intentional Misrepresentation Claim
Exists.
¶131. I now address the substantive reasons for my dissent. The lead opinion
concludes that the Tatge case "precludes an employee's tort claim
against an employer for alleged intentional misrepresentation that allegedly induced
continuation of employment." Relying on public policy, the lead opinion
also concludes that no duty to disclose was required here. I disagree with both
conclusions.
¶132. In essence, the author of the lead opinion writes that Miller had no
independent duty to refrain from engaging in intentional misrepresentation. I cannot agree.
Tatge addressed a negligent misrepresentation claim that was inextricably
tied to termination. Tatge did not go so far as to abolish the tort of
intentional misrepresentation for an employee. Tatge was not an
intentional misrepresentation case. Rather, it is a very narrow decision declaring that a
breach of contract case was not actionable in tort. It should not be interpreted to preclude a
continuation of employment claim based on intentional misrepresentation, such as was
presented here. Contrary to the lead opinion's rationale as to how Mackenzie tried and
argued the case, it did not relate to a misrepresentation made with respect to his termination.
There is no inextricable tie between the intentional misrepresentation and the performance of
the contract. Mackenzie did not have to establish a duty independent of the performance of
the contract because his claim did not relate to misrepresentations made with respect to his
termination. See Landwehr v. Citizens Trust Co., 10 Wis. 2d 716, 723,
329 N.W.2d 411 (1983). The misrepresentations he complains about related to inducing him
to continue his employment. Tatge does not specifically address this
issue, nor can I conclude we should read Tatge to preclude this type of
claim. In fact, the lead opinion admits and cites cases across the country that support
Mackenzie's claim. See Majority at ¶30-31 & n.6. For example,
New York "has long held that an action for fraudulent misrepresentation, independently
pleaded, can constitute a cause of action which may be pleaded in addition to, or as an
alternative to, an action for breach of contract." Shaitelman v. Phoenix Mut.
Life Ins. Co., 517 F. Supp. 21, 22 (S.D. N.Y. 1980).
¶133. These cases have recognized that an employer who lies to an employee
to induce the employee to continue with the company cannot escape the liability that may be
associated with intentional deceit. Cases dealing with the unilateral volunteering of corporate
strategy and insider information are distinct from affirmatively being untruthful about the
answer to a specific request. This case is not about a duty to disclose. It is about the
absolute duty not to lie!23 It
may, however, entail a duty to disclose facts upon which the requester may rely, after a
specific request is made. See Wis JI-Civil 2401 ("A duty to speak may
arise when information is asked for."). Having concluded that
Tatge does not bar the claim presented here, I also am persuaded by the
reasoning espoused in several of the cases the majority dismisses. For example, in
Marketing West, Inc.v. Sanyo Fisher, Corp., 7 Cal. Rptr. 2d 859 (Ct.
App. 1992), the court reiterated that when a employer decides to speak, "`either
voluntarily or in response to inquiries, he is bound not only to state truly what he tells but
also not to suppress or conceal any facts within his knowledge which materially qualify those
stated. If he speaks at all he must make a full and fair disclosure.'"
Id. at 865 (citation omitted).
¶134. It is undisputed that under Wisconsin case law Smith and Miller can be
found liable for intentional misrepresentation to induce one to work. How then can we
conclude that the sanction disappears when the employee steps over the doorstep of the
workplace? There is no legal basis to support this position. The cases supporting
Mackenzie's claim recognize that fraudulent inducement to continue employment "is
separate from a claim based on termination of employment which is not available to at-will
employees." Franz v. Iolab, Inc., 801 F. Supp. 1537, 1542 (E.D.
La. 1992). Although the at-will employment doctrine adhered to in this state permits
employers to dismiss employees for any reason, this doctrine does not, and cannot, permit an
employer to lie and deceive an employee to continue employment. The at-will employment
doctrine does not bar a claim for intentional misrepresentation against an employer.
See Offshore Petroleum Divers, Inc. v. Cromp, 952 S.W.2d 954 (Tex.
Ct. App. 1997). Here, Smith knew Mackenzie's career goals and, when specifically
questioned as to whether the reorganization would affect him (Mackenzie), Smith
affirmatively represented that it would not.
¶135. The appellants and the lead opinion fail to address the question that goes
to the heart of the employer-employee relationship and its stability: does the employer have
a right to do a wrong? They cite no cases that allow an employer to engage in intentional
misrepresentation with impunity. This case involved a fact-specific request, not a request to
divulge every detail of the boardroom. An employer can withhold any information it wants
as long as it is not done fraudulently. When Mackenzie questioned Smith, Smith could have
refused to answer. Once Smith spoke, he assumed the duty to speak truthfully. As the
WELA brief succinctly points out, there is no basis in law, equity or public policy for this
court to endorse the granting of employers the license to lie. Without exception, employees
are expected to be honest in their work performance and there is no reason that a different
standard should only apply to employers. Truthfulness and integrity in an
employee-employer relationship form a foundation that allow all to thrive.
¶136. Here, the jury found that Mackenzie proved the elements of intentional
misrepresentation: that Smith made a representation of fact that was untrue, Smith knew it
was untrue, and made it with the intent to deceive and to induce Mackenzie to stay employed
at Miller to Mackenzie's detriment.
¶137. The lead opinion further concludes that public policy precludes allowing
Mackenzie to maintain the intentional misrepresentation claim. The lead opinion provides
five reasons to reject Mackenzie's claim: (1) market forces are a good enough deterrent; (2)
at-will relationship will retain its desired flexibility; (3)duty to disclose is not simple; (4) the
action should be in contract and not in tort; and (5)there is no sensible just stopping point. I
disagree with the lead opinion's analysis in each respect.
¶138. Market Forces. The lead opinion suggests that market
forces will be sufficient to deter fraudulent practices. I cannot agree. As evidenced by
Mackenzie's case, market forces did not preclude the deceit that the jury found was
committed here.
¶139. Flexibility of At-Will Employment. The lead opinion
suggests that preclusion of tort claims in the employment context will result in the at-will
employment relationship retaining the flexibility that is so advantageous to both employers
and employees. Recognizing that an employee may present an intentional misrepresentation
claim to a jury in an attempt to prove that the employer lied to him to prevent him from
seeking employment elsewhere, will not interfere with the flexibility of employment at-will.
These types of claims are few and far between, as evidenced by the limited number of cases
reported across the country. Intentional misrepresentation actions are fact-specific and
difficult to prove.
¶140. Complexity of Duty to Disclose. The lead opinion
concludes that recognizing this cause of action would create difficulties in defining what an
employer may be required to disclose. This is an insufficient policy reason to foreclose
Mackenzie's claim. This type of complex question involves issues that lawyers, who accept
cases, and courts, who preside over cases, have been deciding day after day. The fact
scenarios cited in the lead opinion as hypothesized by HRMA and WMC do not constitute
sufficient reason to foreclose the claim altogether. The fact scenarios presented are distinct
from the very specific facts the jury was presented with here.
¶141. Contract not Tort. The lead opinion suggests that
foreclosing this claim will not permit an employer to commit fraudulent acts because
employees still have a contract remedy. Unless an employee has a contract with a term that
requires the employer to be truthful in response to an inquiry about the employee's job
status, if asked, and prohibits an employer from lying in order to prevent the employee from
seeking employment elsewhere, it is hard to imagine contract law providing an adequate
remedy for the fact scenario presented to the jury in Mackenzie's case.
¶142. No Sensible Stopping Point. Finally, the lead opinion
suggests that recognizing this claim would result in "employers and employees forever
guessing at the limits of their responsibility and potential liability." I cannot agree that
"no sensible stopping point" public policy precludes Mackenzie's claim. Again,
as evidenced by the relatively limited reported case law across the country addressing this
issue, specifically in the states where this claim has been recognized, there has not been a
stampede to the courthouse steps. The bottom line is that, in this case, the jury found that
Smith, when directly asked by Mackenzie whether his status was affected by the
reorganization, lied. He told Mackenzie that he would not be affected at all, that Miller
needed him, he was a valued employee, etc. When an employee directly asks the question of
an employer, and the employer chooses to answer the question, fairness and adherence to
fundamental principles of society demand that the employer provide the employee with a
truthful answer to the question.
C.Fundamental Reasons.
¶143. Lastly, I conclude that there are very fundamental reasons to reject the
majority's reversal of the jury's intentional misrepresentation finding. That Miller and Smith
may have had the greater right under the "at-will" doctrine to discharge
Mackenzie, for any reason or no reason, does not entail the lesser right to lie to him because
one has a fundamental duty not to lie.24
¶144. We, as humans, are social beings by nature and destined to communicate
with our fellow human beings. One of the means that we possess for communicating is the
faculty of speech. Speech is an instrument by which a mind is brought into contact with
another mind, by which the thoughts of one are conveyed to another. To use speech to
convey a thought of the mind, which is not truly a thought of the mind, is to use the faculty
of speech contrary to its primary purpose. Therefore, the right use of speech, as determined
by its very nature, is to make known the thoughts of the mind to signify what one thinks is
true. When one intentionally uses words or actions which belie one's inner convictions, one
misuses the faculty of speech. To do so, is then to signify what is not true. It is the absence
of conformity between the mind and speech which constitutes a lie.
¶145. More germane to the issue before us, an intentional misrepresentation
which the jury found to have occurred, is a lie because Smith's speech and subsequent
actions did not conform to the true thoughts of his mind, and were performed without
justification. He had a fundamental duty not to lie or intentionally misrepresent because it
was contrary to his nature. From a societal standpoint, Smith's actions have a pernicious
effect because they tend to destroy mutual confidence and weaken the bonds fundamental to
an orderly and peaceful society.25
Whether the Kantian "Categorical Imperative" or a general Thomistic orientation
(both of which served as partial foundation stones in the development of our common law
and constitutional tradition) are a basis for analysis, it is fundamentally wrong to lie without
a justification.26
¶146. On the surface, this appeal may seemingly concern itself with whether a
cause of action was appropriately pleaded but, in reality, it focuses upon a more fundamental
value necessarily contemplated by our Wisconsin Constitution. Article I, section 22
acknowledges: "The blessings of a free government can only be maintained by a firm
adherence to justice, moderation, temperance, frugality and virtue, and by frequent
recurrence to fundamental principles." Wis. Const. art. I, sec. 22 (emphasis
added). To even dare suggest, much less conclude, that the wrong of intentional
misrepresentation should be excused, qualified, or suspended from sanction because of the
circumstances in which it is found to have been executed; i.e., it occurred in an employment
setting, is the apogee of moral relativism or utilitarianism. Such a resolution ought not be
condoned.
¶147. There is a time or times for every fundamental principle forming a basis
for our society to be acknowledged or reinforced. This appeal presents that occasion. Our
state has a well-respected tradition for preserving fundamental individual and societal rights,
euphemistic rationalizations notwithstanding. Time and again, our judicial system has risen
to the occasion. To resolve this appeal on the basis of situational morality, as perhaps
unconsciously proposed by the majority, would be a disservice to our citizens, our state and
our society.
¶148. In sum, I would affirm the jury's verdict on the intentional
misrepresentation claim, but reverse on the interference with contract claim.27
1 As the parties have learned, this court's tape recording system malfunctioned at oral
argument. Fortunately, however, we were able to obtain a nearly complete recording of the
arguments from WTMJ News, whose reporter was covering the case. Thus, with
appreciation to WTMJ, we have been able to review the oral arguments.
2 Neither at trial nor on appeal have Mackenzie's theories drawn any legally significant
distinction between misinforming and failing to inform. Therefore, although in other
circumstances such possible distinctions could be significant, in this case, for the most part,
we will simply use the term "misrepresentation" to encompass both of
Mackenzie's theories and the conduct he alleged-misinforming, and failing to
inform/concealing information.
3 Preliminarily, we note that Miller vigorously challenges the trial court's post-verdict
motion determination that Miller had stipulated that it had a legal duty to disclose, therefore
waiving the very issue that has become the primary issue on appeal. Nor does Mackenzie
embrace the trial court's conclusion; he never contends that Miller stipulated that it had such
a duty. Mackenzie does argue, however, that Miller "stipulated that the jury should
decide this very point." The record, however, refutes both the trial court and
Mackenzie.
Miller consistently argued that, as a matter of law, because it had no duty to
disclose, Mackenzie's misrepresentation claim must be dismissed. Having failed to prevail
on that point, however, Miller participated in the preparation of the jury instructions. But
Miller did so without ever abandoning its argument. For example, at the instructions
conference, counsel for Miller stated:
I believe that plaintiff's claim against
Miller and Smith for failure to disclose a fact requires first a finding that there is a duty to
disclose, and although after the court rejected our request that the court decide this as a
matter of law, I think it then became necessary to have a question in the special verdict with
respect to duty to disclose.
Throughout the instructions
conference, Miller's counsel continued to make the same point, sometimes referring to the
trial court's rejection of its motion for summary judgment. Ultimately, Miller stipulated to
the question: "[D]id Miller Brewing Company have a duty to disclose the fact that
Mackenzie's position was downgraded to a Grade Level 13, and that he was grandfathered at
Grade Level 14?" Clearly, however, Miller neither waived its primary challenge nor
agreed that the issue was for the jury to decide. See Milwaukee & Suburban
Transp. Corp. v. Milwaukee County, 82 Wis.2d 420, 442, 263 N.W.2d 503
(1978) ("stipulation should not be construed so as to effect the waiver of a right not
plainly intended to be relinquished").
4 Mackenzie cites: Stewart v. Jackson & Nash, 976 F.2d 86 (2d Cir.
1992); Marfia v. T.C. Ziraat Bankasi, 903 F. Supp. 463 (S.D.N.Y.
1995), judgment vacated and cause remanded, 100 F.3d 243 (2d Cir. 1996);
Tolbert v. United Insurance Co. of America, 853 F. Supp. 1374 (M.D.
Ala. 1994); Franz v. Iolab, Inc., 801 F. Supp. 1537 (E.D. La. 1992);
Shaitelman v. Phoenix Mutual Life Insurance Co., 517 F. Supp. 21
(S.D.N.Y. 1980); Lazar v. Superior Court, 909 P.2d 981 (Cal. 1996);
Marketing West, Inc. v. Sanyo Fisher (USA) Corp., 7 Cal. Rptr. 2d 859
(Ct. App. 1992); Gardner v. Celanese Corp. of America, 76 S.E.2d 817
(Ga. Ct. App. 1953); Hanlon v. Macfadden Publications, Inc., 99 N.E.2d
546 (N.Y. 1951); and Offshore Petroleum Divers, Inc. v. Cromp, 952
S.W.2d 954 (Tex. App. 1997).
5 Mackenzie also argues that even those cases involving inducements to
commence employment are supportive of his theory regarding inducements to
continue employment. We are not convinced. For the most part, courts
reviewing actions for fraudulent inducements to commence employment have focused on the
employees' circumstances preceding the at-will employment relationships, and on the
inducements and decisions leading to employment. Generally, these factors, such as current
employment status and salary, competing offers or opportunities, and relocation costs,
specifically relate to inducements to commence, not continue, employment. See
Sandra J. Mullings, Truth-In-Hiring Claims and the At-Will Rule: Should an Employer
Have a License to Lie?, 1997 Colum. Bus. L. Rev. 105; see also
Palmer v. Beverly Enters., 823 F.2d 1105, 1113 (7th Cir. 1987)
("`It is well settled that a "promise made with no intention of performing is
actionable fraud where the other party relies upon it as an inducement to enter into an
agreement."'") (quoted sources omitted); Tolbert, 853 F.
Supp. at 1377 (holding that "state court could find that [employee] has suffered
actionable injury in that [misrepresentations made to induce acceptance of employment] were
collateral to his status as an employee at will"); Lazar, 909 P.2d at
988 (holding that claim for fraudulent inducement to accept employment was actionable
where "[employer's] misrepresentations were made before the employment relationship
was formed, when [employer] had no coercive power over [prospective employee] and
[prospective employee] was free to decline the offered position"); see also
Berger v. Security Pac. Info. Sys., Inc., 795 P.2d 1380, 1384 (Colo. Ct.
App. 1990) ("An employer's right to terminate an at-will employee without cause does
not protect the employer from liability for fraud in inducing the employee to accept
employment."); cf. Redies v. Nationwide Mut. Ins.
Co., 711 F. Supp. 570, 572 (D. Colo. 1989) ("This Court concludes that
plaintiff's claims for fraud, false representation, non-disclosure or concealment, and negligent
misrepresentation may be maintained based on representations regarding future conditions of
employment.").
6 See Stewart, 976 F.2d at 87, 90 (misrepresentation of present fact is
actionable under theory of fraudulent inducement to enter into and continue employment);
Marfia, 903 F. Supp. at 466, 470 (promise made with
"preconceived and undisclosed intention of not performing it" constitutes
misrepresentation of present fact and is actionable under theory of fraudulent inducement to
reject job offer from different employer and continue present employment);
Franz, 801 F. Supp. at 1542-43 (at-will employee may maintain action for
fraudulent inducement to accept or continue employment); Shaitelman,
517 F. Supp. at 22-23 (claim for fraudulent misrepresentation regarding inducement to
continue employment is actionable); Hanlon, 99 N.E.2d at 549-51
(employer's intentional misrepresentation of material facts in order to fraudulently induce
continuance of employment is actionable); cf. Marketing
West, 7 Cal. Rptr. 2d at 865 (Even if there is no duty to disclose, when a
person chooses to speak, "`either voluntarily or in response to inquiries, he is bound
not only to state truly what he tells but also not to suppress or conceal any facts within his
knowledge which materially qualify those stated. If he speaks at all he must make a full and
fair disclosure.'") (quoted source omitted); Gardner, 76 S.E.2d at
818-19 (cause of action exists against any employer who fraudulently misrepresents
employee's employment status, interfering with employee's right to earn a living).
7 As Butler and Chauvin explain:
In many instances, employers are
prevented from abusing the discretion of the employment-at-will doctrine because market
forces constrain arbitrary behavior. Consider the following proposition. An employer who
develops a reputation for unjustly firing her employees will have a difficult time attracting
good employees. Employees who take the risk of working for such an employer are usually
being compensated in the form of higher wages. This proposition may not be immediately
obvious. The initial reaction is that such an abusive employer would be unlikely to offer
higher wages to her employees. Workers with alternative employment opportunities will
choose to not work for this employer; instead they will work for other employers who are
not as prone to fire employees without cause. This will leave our "firing"
employer with a choice of workers who are unable to find jobs with other employers at a
comparable wage. Accordingly, the lower quality employees are paid higher wages to work
in the job where they have a greater likelihood of being fired. Thus, our hypothetical
employer pays higher wages not out of choice, but through the natural selection process from
the available pool of workers choosing where they want to work. Of course, this analysis
does not apply to all employment situations, but it does serve to point out that profit
maximizing businesses do not exercise their right to fire at will lightly.
Henry N. Butler and Keith
W. Chauvin, Economic Analysis of Labor Markets: A Framework for Analyzing
Employment Law Issues, 8 Kan. J.L. & Pub. Pol'y 1, 10-11 (1999) (footnotes
omitted). Although Butler and Chauvin are focusing on the economic consequences of unjust
terminations, their reasoning applies with equal force to employers whose misrepresentations
would motivate an employee exodus.
8 See Berda v. CBS Inc., 800 F. Supp. 1272, 1278 (W.D. Pa.
1992):
Plaintiffs' argument that because someone in
CBS, Inc. had knowledge of the proposed format change, CBS, Inc. is guilty of fraud for
failing to disclose the prospect of possible layoffs to Berda rests on the notion that upper
management of a large corporation has a duty to discuss significant corporate plans with the
employees who may ultimately be affected. Appealingly populist as this is, it is simply not
the law.
9 "[G]ood faith is often called an implied condition in every contract."
Hale v. Stoughton Hosp. Ass'n, 126 Wis.2d 267, 274, 376 N.W.2d 89
(Ct. App. 1985); see also Crown Life Ins. Co. v. LaBonte, 111 Wis.2d
26, 44, 330 N.W.2d 201 (1983). Thus, although the supreme court, in Brockmeyer v.
Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834 (1983),
"refuse[d] to impose a duty to terminate in good faith into employment
contracts," id. at 569 (emphasis added), the court did not reduce the
good faith obligations of an employer toward an employee in a continuing, at-will
employment relationship, see Hale, 126 Wis.2d at 274
("Brockmeyer does not relieve an employer of contractual
obligations it has undertaken.").
10 Exceptions exist, however, so that in addition to contract claims, tort actions based on a
"special duty" may arise "[b]y virtue of the relationship between the parties
created by the contract." Anderson v. Continental Ins. Co., 85
Wis.2d 675, 686, 271 N.W.2d 368 (1978) (involving the special fiduciary relationship
between insurer and insured giving rise to both contract claim for breach and tort claim for
bad faith).
11 Once again, Butler and Chauvin provide helpful analysis:
In recent years, state courts have been
moving away from a "strict" application of the employment-at-will doctrine.
Recent opinions have limited the "at will" doctrine through an extension of
contract law doctrine and an implied "good faith" contract term that prevents
termination without cause. This approach limits the discharge of employees for malicious
purposes, such as resisting sexual advances or to avoid paying an employee commissions
earned but not vested. Other cases alter the doctrine on the grounds that the employee's
firing violated some "public policy," such as discharge for serving jury duty or
filing a complaint with a regulatory agency. Almost one-half of the states have modified the
doctrine in some manner. The typical justification for judicial or statutory modification of
the employment-at-will doctrine is that society has become more complex and thus complex
legal rules are necessary to deal with complicated interdependencies. Such a conclusion,
however, does not necessarily follow. For example, it seems just as plausible that simple
rules are more appropriate for dealing with complex fact patterns. In general, the more
complicated the facts and the more "sophisticated" the legal rule, then the less
likely that contracting parties will understand the legal consequences of their actions and the
less likely that the bargain will encompass all foreseeable consequences. The abandonment
of a simple rule like the employment-at-will doctrine is as likely to frustrate peoples'
expectations as it is to facilitate their realization.
Butler & Chauvin,
supra, at 11 (footnotes omitted). This is not to suggest that those courts
qualifying the employment-at-will doctrine on public policy grounds have not been warranted
in doing so. But, as Butler and Chauvin imply, courts carving out exceptions to the doctrine
must do so carefully, and with economically astute appreciation of real economic
consequences-for both employer and employee-that, at first glance, might not be
apparent.
12 See Wis. Stat. §805.14(1) (1997-98):
No motion challenging the sufficiency of the
evidence as a matter of law to support a verdict, or an answer in a verdict, shall be granted
unless the court is satisfied that, considering all credible evidence and reasonable inferences
therefrom in the light most favorable to the party against whom the motion is made, there is
no credible evidence to sustain a finding in favor of such
party.
13 We should clarify that, to accept Miller's argument that Mackenzie proved no
misrepresentation damages, we need not reject Mackenzie's theory that,
depending on the circumstances, one could detrimentally rely on a misrepresentation,
continue employment, miss out on more lucrative opportunities and, as a result, sustain
damages. Here, however, even if we were to accept that theory, and even if we were to
conclude that the evidence supported Mackenzie's misrepresentation claim in all other
respects, we still would conclude that Mackenzie, having utterly failed to introduce any
evidence of misrepresentation damages, would be entitled to recover nothing.
14 Schmitz explained: "[T]he primary reason for the reorganization was to create a
group to finish the design, and implementation, administration of what they called the map
program, which is the market share achievement plan. And that was the nucleus of a new
structure that would be in the sales organization." He confirmed that "a
substantial portion of the workers that were to perform that work had previously functioned
under Mr. Robert Smith's division, or his umbrella" and that the reorganization
"was going to involve the shifting of certain employees from ... vice-president Smith to
vice-president Koehler."
15 Read carefully, Schmitz's account of Koehler's opinion of Mackenzie allows for a
different interpretation: that Koehler believed that Mackenzie was "not overly
comfortable with [his, i.e., Mackenzie's own] managerial style and skills."
Whichever interpretation one would adopt, however, it is clear that, according to
Schmitz, Koehler had misgivings about Mackenzie's managerial readiness for
promotion to a directorship.
16 Having concluded that Mackenzie provided no evidence of improper conduct constituting
tortious interference, we need not address the additional, intriguing argument presented by
Miller and Wisconsin Manufacturers and Commerce: that because tortious interference
requires interference with a prospective contract by a third party, and because a party cannot
interfere with its own contract, and because Mackenzie pursued his action against Smith on a
respondeat superior theory tying Smith to Miller Brewing, Mackenzie failed to
even allege an actionable tortious interference. See Wausau Med. Ctr., S.C. v.
Asplund, 182 Wis.2d 274, 297, 514 N.W.2d 34 (Ct. App. 1994); see also
Piekarski v. Home Owners Sav. Bank, 956 F.2d 1484, 1495 (8th Cir. 1992);
Mintz v. Bell Atl. Sys. Leasing Int'l, Inc., 905 P.2d 559, 564-65 (Ariz.
Ct. App. 1995).
17 In this case, Mackenzie contends that "because the trial court did not provide an
analysis of the evidence supporting the verdict in question," this court should examine
the evidence de novo. Best, on the other hand, believes we should show
deference to the trial court's determination by "view[ing] the evidence in the light most
favorable to that award of $0." Regardless of whether the trial court's brief comments
constitute "an analysis of the evidence," we need not resolve the parties' dispute
over our standard of review. The trial court's comments provide little guidance and, in any
event, we have reviewed the entire record so that, in effect, we have analyzed the evidence
as if being presented with "a matter of first impression." See Cords v.
Anderson, 80 Wis.2d 525, 553, 259 N.W.2d 672 (1977).
18 Professor Kolb also testified that he was asked to review Mr. Steiner's reports "for
the purpose of checking for the quality of the logic, checking for mathematical mistakes, and
for the implications of some of the assumptions that were made." Ultimately,
Professor Kolb challenged Mr. Steiner's logic and use of double counting
methodology.
19 Mackenzie maintains, nonetheless, that "[t]he jury could reasonably infer that Best
wanted [him] fired so she could continue reporting directly to her friend, [David] Goulet, as
opposed to Mackenzie, to whom it was anticipated she would report [when some anticipated
transfers would occur]." But in support of that assertion, Mackenzie provides only
three record references-two to testimony of Best and one to testimony of
Goulet-none of which supports his theory, and two of which flatly dispute it.
While it is true that the jury could have doubted or disbelieved that testimony, Mackenzie
still is stuck without any support in the record for his contentions about Best's motive.
20 Because the lead opinion adequately sets forth the elements of intentional
misrepresentation and the burden of proof, I eschew unnecessary repetition.
21 This factor is further supported by the fact that had Mackenzie been given the position
recommended by the Boston Consulting Group task force, he would have been elevated to
level 15 and a directorship.
22 MacDonough testified via deposition, which was read to the jury:
Q As the chief executive officer of
Miller Brewing Company, do you believe that an employee is entitled to know when his
position is downgraded by the company?
....
A Yes, I would want them to know.
Zielinski testified:
Q And if ... he [Mackenzie] was your
direct report ... you would have called him in and told him [that he had been downgraded],
correct?
A Possibility, yes.
Q Well, in your deposition you didn't say possibility, you would have said it was
your obligation to do so, and you would have done it.
A I believe I would have, yes.
Q Yes. Because it was your obligation.
A Personally the way I manage,
yes.
23 I also note that the trial court ruled that Miller had waived its right to contest "duty
to disclose." The trial court pointed out that Miller stipulated that it had a duty to
disclose. The lead opinion disagrees with the trial court's conclusion in this regard. But
having reviewed the trial court's ruling on this issue, where it points out the pertinent
discussion between the parties on the subject, I would defer to the trial court's decision as to
this matter.
24 John H. Garvey, What are Freedoms For? 195-206 (Harv. Univ. Press 1996).
25 Jos. Sullivan, Special Ethics 17-28 (Holy Cross College Press 1949).
26 Hadley Arkes, First Things, An Inquiry into the First Principles of Morals and Justice
85-115 (Princeton Univ. Press 1986); Leibel, Readings in Ethics 529-565 (Loyola Univ.
Press 1926); Peter Kreeft, A Refutation of Moral Relativism 101-123 (Ignatius Press 1999).
27 In so concluding, it would be necessary for me to address the issues raised regarding
punitive damages. Having reviewed the trial court's decision in this regard, I agree with the
analysis set forth and would affirm the judgment in that regard. The trial court concluded
that there was credible evidence to support the punitive damage award against Miller. The
trial court made this determination after having the opportunity to hear and see the witnesses
and other evidence. It concluded that there was sufficient evidence to allow the jury to
conclude that Miller's conduct was outrageous. I adopt the reasoning of the trial
court.
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