Vol. 73, No. 7, July 2000

Hausman v. St. Croix Care Center:
Stretching the Employment-At-Will Doctrine

The Plaintiffs' Perspective
The Defendant's Perspective
Statutory Changes to Protect Reporters of Elder Abuse

In Hausman v. St. Croix Care Center, the Wisconsin Supreme Court expanded the public policy exception to the employment-at-will doctrine to protect private sector employees who "whistle blow" when they have a legal duty to do so. The authors explore the rationale behind the decision, the decision's effects, and the changes it has brought about in employment and health care law.

t. Croix Care Center (SCCC), a private nursing facility in Prescott, Wis., employed Jane Hausman, a social worker, as the director of social services. She and coworker Karen Wright, an LPN, were members of an interdisciplinary care team responsible for ensuring that SCCC provided appropriate care to its residents. In 1992 and 1993, Hausman and Wright brought concerns of suspected abuse and neglect of residents to the director of nursing and eventually to SCCC's administrators, but no action or investigation was undertaken. Hausman then contacted the regional ombudsman for the Board on Aging and Long Term Care, who investigated their concerns. At Hausman's request, the ombudsman contacted the state agency, the Bureau of Quality Control. Both Hausman and Wright were terminated shortly thereafter. Hausman was terminated in July 1993 for alleged unprofessional conduct and breach of confidentiality. The St. Croix Care Center terminated Wright in September 1993, citing budgetary constraints.

Hausman and Wright initially filed an administrative complaint against SCCC with the Equal Rights Division (ERD), alleging a violation of section 46.90 of the Wisconsin Statutes. Because that statute protected only those who reported to the designated county agency, rather than the ombudsman, their claim was dismissed by the ERD and Labor & Industry Review Commission (LIRC), which dismissal was affirmed by the circuit court.¹ They also filed a common law wrongful discharge complaint in circuit court, alleging that they were discharged for reporting suspected abuse and neglect, in violation of the public policy that encourages the reporting of abuse and neglect of the elderly, embodied in section 46.90.

Although Wisconsin generally recognizes that employees are employed "at will," and can be discharged for any reason not prohibited by law, the Wisconsin Supreme Court had earlier recognized a public policy exception to employment-at-will in a 1983 case, Brockmeyer v. Dun & Bradstreet.² This exception resulted in a line of employment cases defining the parameters of the public policy exception. At the time Hausman arose, case law provided that employees have a cause of action for wrongful discharge if they are discharged for refusing a command, instruction, or request of their employer to violate public policy as established by existing law.

Because Hausman and Wright had not refused a command or request to violate public policy, their wrongful discharge claim was dismissed by the circuit court, which decision was upheld by the Wisconsin Court of Appeals.³ However, in December 1997, in Jane Hausman and Karen Wright v. St. Croix Care Center,⁴ the Wisconsin Supreme Court took the opportunity to expand the public policy exception to the employment-at-will doctrine to protect private sector employees who "whistle-blow" when they have a legal duty to do so.

This article explores the rationale behind the decision in Hausman, the effects of the decision, and the changes it has brought about in employment and health care law. Authored by the two opposing attorneys in the Hausman case, two different perspectives of the case are presented. Because the case was decided on defendant's motion to dismiss for failure to state a claim, the two sides have stipulated to the facts of the case as alleged in the first paragraph of this article.

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