Tortious Interference with At-will Employment

by Mark R. Hinkston

erformance-based firings or financially motivated layoffs are facts of corporate life. While the majority of at-will employee terminations are legitimate, sometimes supervisors or colleagues induce employee terminations (or thwart promotions) out of malice with no corporate benefit. When this happens, some employees have sought relief via a claim for tortious interference with contract - a claim long-recognized in Wisconsin, generally to salve the tortious usurpation of a valuable deal.

The most recent high-profile example of tortious interference claims in the at-will employment context is Mackenzie v. Miller Brewing Co.,1 more commonly known as the "Seinfeld case." Mackenzie, after his termination, asserted tortious interference claims against his supervisor for allegedly defeating a promotion, and a female coemployee for allegedly causing his termination after he told her more than she wanted to hear about a certain Seinfeld television show episode. Mackenzie also asserted intentional misrepresentation claims against Miller Brewing and his supervisor, alleging that Miller misrepresented that his position would not be affected by a company reorganization.

The Wisconsin Court of Appeals rejected Mackenzie's tortious interference and misrepresentation claims. Only the misrepresentation claims were the subject of Mackenzie's appeal to the Wisconsin Supreme Court. The supreme court held that an at-will employee may not sue for misrepresentation when an employer fails to disclose facts relating to the employee's status. Because the supreme court did not address Mackenzie's tortious interference claims, any subsequent discussion herein of the Mackenzie case refers to the court of appeals decision.

Mackenzie highlights an employee plaintiff's heavy burden in pursuing a tortious interference claim against an employer. Corporate-actor defendants are insulated by certain "conditional privileges." Also, success hinges on evidence that a termination or demotion was the result of an "improper motive" - generally considered to be akin to ill will or a malicious act intended solely for self-benefit, to the exclusion of corporate interests.

This article addresses Wisconsin courts' treatment of tortious interference claims in the at-will employment context, with specific focus on: 1) the tort's genesis and development; 2) the categories of targeted defendants and the "conditional privileges" they assert; and 3) the concept of "impropriety" and the burden of proving it.

Tort Meets At-will Employment

Courts are reluctant to second-guess employment decisions2 and disfavor attempts to "shoehorn" tort causes of action into contractual relationships.3 Thus, tortious interference with at-will employment claims occasionally are greeted with initial suspicion.

First, some take the "employment-at-will doctrine" and the unavailability of a breach of contract/wrongful discharge claim to mean that the at-will employment relationship is not "contractual" and, thus, not entitled to remedy via a tortious interference with contract claim. It indeed is true that at-will employees can be terminated for "good cause, no cause, or morally wrong cause."4 Yet the basis for at-will employment is a contract - albeit one "at-will" - and "until it is terminated the [at-will employment] contract is a subsisting relation, of value to the plaintiff, and presumably to continue in effect."5

Second, suspicion also arises because the interference tort sometimes is viewed as a "back-up remedy" against breaches of contract6 - an attempt to get at an employer's "deeper pockets." Yet, the employer is not a viable party in a tortious interference with at-will employment claim. The employer cannot be liable for interference because liability is not imposed for interference with one's own contract, in this case the at-will contract between employer and employee. Thus, the employer cannot be targeted and will not possess vicarious liability.7 However, corporate officers and directors may be targeted for personal liability.

An employee's tortious interference claim in a civil action also may be suspected as a means to skirt the Wisconsin Worker's Compensation Act. Yet, such a claim is not preempted by the Wisconsin Worker's Compensation Act to the extent that the plaintiff seeks "economic loss" rather than damages for "mental or physical harm."8 Thus, an employee has potential to recover in a civil action pecuniary loss of benefits, causally related consequential losses, and punitive damages.9

Page 2: Metamorphosis of Tortious Interference