The Plaintiffs' Perspective
Hausman Eliminates Wrongful Discharge for Protecting Public
Policy
by Carol N. Skinner
Employer advocates may argue that Hausman was decided the
way it was merely because the facts of the case were so egregious that a
remedy had to be fashioned to address the plaintiffs' specific problem.
This is an over-simplistic view. What happened to Jane Hausman and Karen
Wright was not a blip on the screen. Many would-be reporters of abuse or
neglect of vulnerable persons, whether they be the elderly, infirm,
incompetent, or children, face a Hobson's choice. They can come forward
with their concerns and risk retaliation, or remain silent and thus
share in the blame for the unlawful conduct. These reporters may be
employees (including employees from temporary agencies) of facilities
caring for the vulnerable person, the vulnerable person him or herself,
or a friend or relative of that person. Retaliation can take the form of
loss of job and professional standing, as occurred in Hausman,
further abuse, loss of privileges, demotion, ostracization, and
isolation.
Wisconsin Employment Law Includes Chapter on Employment-at-will
At-will employment, including public policy limitations to the
at-will doctrine, is discussed at length in Wisconsin Employment
Law (State Bar of Wisconsin CLE Books, second edition, 1998). The
1999 supplement to Chapter 1 of the book specifically addresses the
Wisconsin Supreme Court's decision in Hausman v. St. Croix Care
Center.
For more information or to order Wisconsin Employment Law
(which includes the 1999 supplement), call the State Bar at (800)
728-7788 or visit the online CLE Books catalog.
Hausman was decided as it was because the case illustrated
the real-life problems resulting from the overly restrictive
interpretation of the public policy exception to the employment-at-will
rule adopted by the Wisconsin Supreme Court in 1986 in Bushko v.
Miller Brewing Co.5 Following a
well-reasoned opinion in Brockmeyer v. Dun & Bradstreet,
which held 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," the
Bushko court retreated. The plaintiff in Bushko claimed he was
fired for making internal complaints about plant safety, hazardous
waste, and honesty. The employer argued that it had every right to
discharge its employee, as he had no contract of employment. Obviously
troubled by the prospect of every adverse employment decision being open
to court scrutiny, and thus swallowing up the employment-at-will rule,
the Bushko court sought to balance the employer's and
employees' interests. It opted to limit the public policy exception (and
thus an actionable claim for wrongful discharge) to those employees
fired for refusing a command, instruction, or request of the employer to
violate public policy as established in existing law.6
The stated impetus for the Bushko court's restriction of the
public policy exception was to preserve an employer's right to make
personnel decisions unfettered by the possibility of frivolous lawsuits
by disgruntled employees who could seemingly challenge any adverse
employment action merely because they had engaged in "praiseworthy
conduct." The fallacy of this reasoning stems from a misinterpretation
of the balancing act language of Brockmeyer, which was
reiterated by the supreme court in Hausman:
"We believe that the adoption of a narrowly circumscribed public
policy exception properly balances the interests of employees,
employers, and the public. Employee job security interests are
safeguarded against employer actions that undermine fundamental policy
preferences. Employers retain sufficient flexibility to make needed
personnel decisions. ... Finally, the public is protected against
frivolous lawsuits, since courts will be able to screen cases on motions
to dismiss for failure to state a claim or for summary judgment if the
discharged employee cannot allege a clear expression of public
policy."7
The problem with Bushko's "balancing act" is that it goes
far beyond the concern of Brockmeyer, which was that discharged
employees be able to allege a clear expression of public policy or face
dismissal of their claim. In fact, Bushko eliminates many
claims where employees can allege a clear expression of public policy,
in favor of employers "retaining sufficient flexibility to make needed
personnel decisions." This was never the intent of Brockmeyer.
Allowing employers to retain "flexibility to make personnel decisions"
at what cost? Yes, an employer's power to discipline and discharge
employees must certainly be protected, but not at the cost of public
safety. As the concurring opinion in Bushko pointed out, "The
unifying principle of the Brockmeyer doctrine is that an
employer may not use the power to discharge to undermine a fundamental
and well-defined public policy embodied in the literal language or in
the spirit of a statute or constitutional provision. Not only employees
but also the public would suffer if the discharge power enhanced the
abilities of employers to violate public policy."8
The facts of the Hausman case clearly illustrated that the
Bushko limits were unworkable. Two reporters of suspected elder
abuse were fired for reporting, and yet without remedy. The tail was now
wagging the dog, and many meritorious claims were falling through the
enormous chasms left in the wake of Bushko. Rather than
overruling Bushko, however, the supreme court carved out an
exception to its restrictive language. Because the plaintiffs in
Hausman were bound by law to take action such as reporting
suspected abuse, the court used that fact to extend protection to the
plaintiffs. It concluded that the public policy exception to the
employment-at-will doctrine may apply beyond the four corners of
Bushko:
"The public policy of protecting nursing home residents from abuse is
fundamental and well-defined. Where the law imposes an affirmative
obligation upon an employee 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."9
The Effects of Hausman
While Hausman was working its way through the court system,
various elder advocacy groups were lobbying for legislative amendments
to existing law to protect vulnerable adults and children by protecting
those who were in a position to ensure their safety, the prospective
reporters. Those efforts were largely successful, and three statutes
were changed to increase that protection. (Please see the accompanying
sidebar.)
Although Hausman involved nursing home employees, there is
no reason to limit its holding to this group. Hausman can be
read to protect any employee who is legally obligated to take action in
the public interest, and is fired for doing so. As the Hausman
court pointed out, "The employer's personnel decisions are not
impermissibly interfered with by a requirement that the employer not
retaliate against an employee complying with the dictates of a
fundamental public policy statement."10
Examples include those employees legally mandated to report not only
abuse, but fraudulent practices, disease control issues, child
endangerment, and ethics violations.
Yet, one must ask, did the Hausman court go far enough in
protecting employees who come forward? If an airline employee is not
legally required to report falsified aircraft maintenance
reports, do we want to let his employer fire him for doing so? How about
the meat packer employee who is aware that her employer is using unsafe
handling practices in order to cut costs? The interest in retaining an
employer's "flexibility to make needed personnel decisions" pales in
comparison to public health and safety issues such as these.
The "floodgate" argument often discussed in the public policy cases,
that every termination will be open to scrutiny,11 is overblown. Courts routinely screen cases in
many areas of law, particularly in the employment arena. And an
employer's intent, that is, whether the adverse decision was based on
the employee's sex, race, age, or other protected status, is always at
issue. Despite this, employers' motions for summary judgment are granted
quite often. Courts can be trusted to intelligently distinguish between
issues of public health and safety, and issues internal to an employer
that do not affect the public's health or safety. The line of
demarcation should be whether an employee was truly acting in the
interest of public health or safety, not whether there is some
little-known law requiring the employee to take a particular action.
Interestingly, there is a statute that protects whistle-blowing
employees in the public sector, but not those in the private sector. Section
230.83 of the Wisconsin Statutes prohibits the state from
retaliating or threatening to retaliate against an employee who
discloses certain information to persons such as his/her supervisor,
attorney, collective bargaining agent, or a legislator. The information
disclosed may include information the employee reasonably believes
demonstrates a violation of any state or federal law, rule, or
regulation, as well as mismanagement or abuse of authority in state or
local government, a substantial waste of public funds, or a danger to
public health and safety.
But where are most of the issues concerning public health and safety
going to arise? It is the private sector that is responsible
for producing our automobiles, airplanes, buses, trains, machines,
medical supplies and equipment, pharmaceuticals, foods, and health care
products, as well as providing many services affecting the public. Section
230.83 is a good start. While it is laudable to protect state
employees who report mismanagement or abuse of authority, there really
are more pressing issues at hand, namely, public safety in the vast
majority of settings, the private sector.
Changes in Practice Resulting from Hausman
Carol N.
Skinner, Indiana University - Bloomington 1984, has been a
shareholder with Bakke Norman S.C., New Richmond, since 1990. She limits
her practice almost exclusively to employment law, representing
employees and employers. She also serves on the board of the State Bar's
Labor and Employment Law Section, has presented programs to employers'
associations and the State Bar on employment topics, and is a member of
the Wisconsin and National Employment Lawyers' Associations.
Employment law practitioners must consider this expansion of the
public policy exception to the employment-at-will doctrine, as well as
the statutory changes protecting employees and others, whether
representing prospective plaintiffs or employers. Employers need to be
advised that nonemployees who report abuse also are protected from
retaliation. This includes individuals from temporary employment
agencies and independent contractors. Agencies administering
discrimination claims (the Equal Rights Division and the Personnel
Commission) must be aware that their jurisdictions have been increased.
Obviously, more employees will have wrongful discharge claims, at least
until employers become aware that they may not retaliate against an
employee for doing something he or she is legally obliged to do.
The result does not have to be a win for employees and a loss for
employers. Adequately educating employers about common law wrongful
discharge, as well as the statutory changes relating to retaliation for
reporting, can bring about the desired outcome for everyone. Eliminating
wrongful discharges of employees for protecting public policy is a
win-win situation. The public policy is promoted, not thwarted; the
employee is not fired; and the employer is not sued. The
Hausman decision is just one step closer to justice for
all.
Endnotes
1 Hausman and Wright v.
LIRC, Case Nos. 96-CV-797 and 798, (Dane County Cir. Ct., May 6,
1997) affirming LIRC's March 7, 1996, decision.
2 Brockmeyer v. Dun &
Bradstreet, 113 Wis. 2d 561, 335 N.W.2d 834 (1983).
3 Jane Hausman and Karen Wright
v. St. Croix Care Center, 207 Wis. 2d 400, 558 N.W.2d 893 (Ct. App.
1996).
4 Jane Hausman and Karen Wright v. St. Croix Care
Center, 214 Wis. 2d 655, 571 N.W.2d 393 (1997).
5 Bushko v. Miller Brewing
Co., 134 Wis. 2d 136, 396 N.W.2d 167 (1986).
6 Id. at 142, 396 N.W.2d
at 171.
7 Brockmeyer, 113 Wis. 2d
at 574, 335 N.W.2d at 841; Hausman, 214 Wis. 2d at 667, 571 N.W.2d
at 398. (Emphasis added.)
8 Bushko, 134 Wis. 2d at
157, 396 N.W.2d at 177 (Abrahamson, S., concurring, joined by Bablitch,
W. and Heffernan, N.).
9 Hausman, 214 Wis. 2d at 669, 571 N.W.2d
at 399.
10 Id. at 668, 571 N.W.2d at 399.
11 See, e.g.,
Brockmeyer, 113 Wis. 2d at 569, 335 N.W.2d at 839; Bushko,
134 Wis. 2d at 146, 396 N.W.2d at 173; Hausman, 214 Wis. 2d at 667, 571 N.W.2d
at 399; Wandry v. Bulls Eye Credit Union, 129 Wis. 2d 37,
54-55, 384 N.W.2d 167,179 (1986) (Steinmetz, J. dissenting).
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