March 22, 2022 - A company that refused to hire a man for a lighting specialist position after it learned he'd been convicted of domestic abuse did not engage in employment discrimination, the Wisconsin Supreme Court has ruled.

In Cree, Inc. v. Palmer, 2022 WI 15 (March 10, 2022), the supreme court held that the circumstances of the man's convictions were substantially related to the circumstances of the position.

The decision came on a 4-3 vote. Justice Jill Karofsky wrote the majority opinion. Joining her in the opinion were Chief Justice Annette Ziegler, Justice Roggensack, and Justice Rebecca Grassl Bradley.

Justice Rebecca Dallet dissented, joined by Justices Ann Walsh Bradley and Justice Brian Hagedorn.

Violent Domestic Assault

In 2013, Derrick Palmer pleaded no contest to two counts of felony strangulation and suffocation, four counts of misdemeanor battery, one count of fourth degree sexual assault, and one count of criminal damage to property.

The convictions came after the Racine County District Attorney charged Palmer for an incident in 2012 in which Palmer attacked his live-in girlfriend.

While in prison, Palmer earned a mechanical design certification. After his release from prison, in June 2015, Palmer applied for a lighting specialist position at the Racine facility of Cree, Inc., a company that makes lighting products.

In July 2015, Cree offered Palmer a lighting specialist position. Cree withdrew the offer after a criminal background check revealed Palmer's 2013 convictions.

Lawsuit Follows Withdrawal of Job Offer

Palmer filed a complaint with the Equal Rights Division of the state Department of Workforce Development, claiming that Cree had violated Wis. Stat. section 111.321, which prohibits discrimination on the basis of a criminal record, subject to exceptions.

During a hearing, an expert witness retained by Cree testified that violent men have underlying issues with power and control. He also testified that there was a direct relationship between a person's willingness to use violence at home and his or her willingness to use violence at work.

The administrative law judge (ALJ) ruled that the circumstances of Palmer's convictions were substantially related to the applications specialist, and that the exception to section 111.321 provided by section 111.335(3)(a)1. applied.

Agency Reversed ALJ

The Labor and Industry Review Commission (LIRC) reversed the ALJ.

LIRC held that the expert's testimony was unhelpful. LIRC also concluded that the company failed to present sufficient evidence that Palmer would 1) have significant personal interactions with female employees or the opportunity to develop personal relationships with customers, and 2) would act violently with coworkers or the public.

The circuit court reversed LIRC's decision, relying on the expert's testimony. The Wisconsin Court of Appeals in turn reversed the circuit court, holding that it was constrained by LIRC's findings with regard to the expert's testimony.

Circumstances of Conviction

Justice Karofsky began her opinion for the majority by establishing the framework for interpreting the term "substantial relationship" in section 111.335(3)(a)1..

The proper way to interpret "substantial relationship," Karofsky, wrote, was to "look beyond any immaterial identity between circumstances—such as the domestic context of the offense or an intimate relationship with the victim—and instead examine the circumstances material to fostering criminal activity.

"The material circumstances are those that exist in the workplace that present opportunities for recidivism given the character traits revealed by the circumstances of a domestic violence conviction."

In applying that framework, Justice Karofsky wrote that "Palmer's crimes show a tendency to violently exert his power to control others, and thus Palmer poses a real threat to the safety of others."

Circumstances of Job

Justice Karofsky explained that Palmer would have ample opportunity to reoffend if Cree hired him.

Some areas in the Racine facility were secluded and beyond the reach of the security cameras, Karofsky explained. Additionally, the noise in the facility could drown out the sounds of a struggle.

Justice Karofsky also noted that Cree would expect the following of Palmer if here were hired:

• to work independently, without daily supervision;

• to regularly meet with co-workers and customers;

• to occasionally travel to customers' facilities; and

• to travel to trade shows with no supervision, which would give him access to rental cars and hotel rooms.

"When we consider the fostering opportunities for conflict and violence in light of the character traits shown by Palmer's convictions along with the seriousness, relative recentness, and emerging pattern to Palmer's crimes, we conclude that Cree met its burden to show a substantial relationship between Palmer's convicted offenses and the Applications Specialist position," Justice Karofsky wrote.

Majority Guts Fair Employment Act

In the dissent, Justice Dallet wrote that the majority opinion misapplied the substantial relationship test by "ignor[ing] the context-specific directive, focusing instead on generic 'character traits,' as well as the general qualities of the workplace, gutting the anti-discrimination policy of the Fair Employment Act in the process."

Justice Dallet noted that when the legislature enacted the Fair Employment Act, it directed courts to liberally construe its provisions. The exception established by section 111.335(3)(a)1. should, therefore, be narrowly construed, she explained.

Justice Dallet explained that Cree had failed to show a strong connection between the circumstances of Palmer's convictions and the circumstances of the lighting specialist position, and pointed out that:

• lighting specialists work in cubicle farms, not isolated areas;

• client meetings take place in Cree's demonstration rooms or public settings; and

• interacting with others is a circumstance of having a job in general and was not particular to the lighting specialist job.

Wrong Standard of Review

The majority also erred by focusing on the domestic nature of Palmer's convictions, Justice Dallet noted. Cree bore the burden of proving that Palmer was likely to engage in criminal conduct against co-workers similar to that which he engaged in with his live-in girlfriend, Dallet explained.

Additionally, Justice Dallet wrote, the majority employed the wrong standard of review by declining to defer to the findings of fact made by LIRC and relying on the expert witness testimony that LIRC had disregarded.

By ignoring the domestic nature of the circumstances of Palmer's convictions and focusing on general character traits, "the majority creates a per se substantial relationship between a domestic-violence conviction and the circumstances of any job that involves working with other people," Justice Dallet wrote. "In short, the majority crafts an exception to the Fair Employment Act that swallows the Act's general rule against such discrimination."