The Defendant's Perspective
Hausman Further Guts Wisconsin's Employment-at-will Doctrine

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

by Katherine L. Williams

Contrary to the plaintiffs' perspective, Hausman was one of those cases where the court fashioned a remedy to address the specific situation presented by the plaintiffs in that case. Even though there was a statutory penalty for discharging employees who reported nursing home resident abuse or neglect, the court dismissed that remedy as inadequate, and refused to wait for the legislature to close the statutory loophole in the Wisconsin statutes.¹ (Please see the accompanying sidebar.) Instead, while the plaintiffs in Hausman had clearly not stated a cause of action for wrongful discharge as that cause of action had been fashioned by the court in Bushko, the court found a way to recognize a cause of action for wrongful discharge under the facts and circumstances of the Hausman case. What is troublesome for employers is what comes next with respect to wrongful discharge. Over the past decade, the court has slowly chipped away at the narrow public policy exception to employment-at-will, and Hausman represents yet another step toward a broad whistle-blower exception to employment-at-will in Wisconsin.

Prior to Hausman, the cause of action for wrongful discharge was predicated upon an employee's refusal to obey an employer's command to violate a public policy as established by a constitutional or statutory provision.² Shortly after Bushko v. Miller Brewing Co. was decided, the court extended the wrongful discharge rule to include discharges that violated the spirit, as well as the letter, of a statutory provision.³ Six years later, in Winkleman v. Beloit Memorial Hosp., the supreme court expanded the wrongful discharge exception to employment-at-will to include employees discharged based upon the violation of a public policy established by a regulation, as opposed to a statutory or constitutional provision.⁴ Thus, by the time the Hausman case reached the Wisconsin Supreme Court in late 1997, Wisconsin employers had witnessed a slow and steady expansion of the terms and conditions under which the court would recognize a wrongful discharge claim.

At first reading, Hausman appears to be limited to the specific fact situation presented in that case. However, as plaintiffs' counsel indicates, there is no reason to limit the court's holding to nursing home employees who report resident neglect or abuse. The troublesome language in Hausman is the court's statement that "[t]he 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."⁵ In Hausman, the court viewed the plaintiffs' legal obligation under Wisconsin Statutes section 940.293(3)⁶ to report resident neglect or abuse as a "sufficiently certain" public policy to allow courts to easily identify covered cases, and thus, the court reasoned that employers will be protected from having every termination decision subjected to court scrutiny.⁷

Precedent does not support this view. The cause of action for wrongful discharge, as first recognized, required an employee to identify a public policy as established by a constitutional or statutory provision. This requirement was then lessened in Wandry to permit an employee to invoke a public policy "outside the precise reach of the statute."⁸ In Hausman, the "precise reach" of the statute relied upon by the plaintiffs was relatively clear. However, if the Wisconsin courts are permitted to consider the spirit and intent of a statute, regulation, or constitutional provision in determining the public policy contained therein, and if an employee need no longer refuse an employer's express command or request to violate that public policy in order to state a cause of action for wrongful discharge, then the Pandora's box referenced in Brockmeyer and Bushko has indeed been opened.⁹

It is the elimination of the requirement that an employee be discharged for refusing a command to violate a public policy that is the most troublesome aspect of the Hausman decision for Wisconsin employers. Although the court reaffirmed its stance that an employee's conduct must be more than merely praiseworthy to state a claim for wrongful discharge, the court admittedly went beyond the four corners of Bushko in recognizing a cause of action for wrongful discharge in Hausman, and held that an employee has a cause of action for wrongful discharge when the employee is discharged for fulfilling an affirmative obligation under the law. If this affirmative obligation, or this public policy, can be invoked outside the precise reach of the statute, then any employee who has acted in accordance with the public policy of a statute can at least assert a claim that he/she has an affirmative obligation to do so.

Contrary to the view of plaintiffs' counsel, the "floodgate" argument in public policy cases that every termination will be open to court scrutiny is not overblown. Under Bushko, an employee cannot state a cause of action for wrongful discharge unless the employee can establish that he or she was discharged for refusing to violate a fundamental public policy. Under these circumstances, there is a nexus between the employee's conduct and the discharge. If the employee's conduct is merely consistent with public policy, and the employee is later discharged by the employer for other reasons, which was the employer's argument in Hausman, then there is no nexus between the conduct and the discharge. Any employee who makes a complaint about anything that can be remotely tied to public interest, health, or safety would be able to assert a claim for wrongful discharge, even absent a temporal proximity between the complaint and the discharge. As the court noted in imposing the refusal of a command requirement in Bushko, if intent becomes an inquiry, the courts will not be able to routinely screen these cases, or dispose of them on summary judgment, as there would always be a question of fact as to the reason for the discharge.¹⁰

The Hausman decision has clearly opened the door to a further evisceration of employment-at-will in Wisconsin. While it remains to be seen how expansively the court interprets its latest exception to employment-at-will, the Hausman decision will obviously result in more wrongful discharge claims, and Wisconsin employers need to be more aware of, and more sensitive to, situations that may give rise to a "whistle-blower" type cause of action.

Endnotes

¹ Hausman, 214 Wis. 2d 655, 670, 571 N.W.2d 393, 399 n.9 (1997).

² Bushko, 134 Wis. 2d 136, 396 N.W.2d 167 (1986).

³ Wandry, 129 Wis. 2d 37, 384 N.W.2d 325 (1986).

⁴ Winkelman v. Beloit Mem'l Hosp., 168 Wis. 2d 12, 483 N.W.2d 211 (1992).

⁵ Hausman, 214 Wis. 2d at 668, 571 N.W.2d at 398.

⁶ Wis. Stat. section 940.923(3) provides:

"ABUSE AND NEGLECT; PENALTIES. (a) Any person in charge of or employed in any facility or program ... who does any of the following, or who knowingly permits another person to do so, may be penalized under par. (b):

"1. Intentionally abuses or intentionally neglects a patient or resident.

"2. Recklessly abuses or recklessly neglects a patient or resident.

"Punishment for failure to act, be it through reporting or taking some other form of action, ranges from a Class B misdemeanor to a Class D felony."

⁷ Hausman, 214 Wis. 2d at 668, 571 N.W.2d at 398.

⁸ Wandry, 129 Wis. 2d at 47, 384 N.W.2d at 329.

⁹ Brockmeyer, 113 Wis. 2d 561, 580, 335 N.W.2d 834, 843 (1983), (Day, J. concurring); Bushko, 134 Wis. 2d at 146, 396 N.W.2d at 172.

¹⁰ Bushko, 134 Wis. 2d at 141, 396 N.W.2d at 170.

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