Kempfer v. Automated Finishing, Inc.

564 N.W.2d 692, 211 Wis. 2d 100, 12 I.E.R. Cas. (BNA) 1686, 1997 Wisc. LEXIS 70

• Court: Wisconsin Supreme Court
• Decided: June 20, 1997
• Docket: 95-0649
• Status: Published

Opinions

JON P. WILCOX, J.

¶ 1. This case is on certification from the court of appeals following a jury trial. The jury concluded that the plaintiff, Ken Kempfer (Kempfer), was entitled to damages of $22,167 for past wages and benefits and $145,000 for future lost wages and benefits from Automated Finishing, Incorporated (AFI) for his wrongful discharge. The Circuit Court for Waukesha County, Patrick L. Snyder, Judge, denied AFI's motions after verdict. AFI appealed.

¶ 2. On certification, we consider: (1) whether, as a matter of law, Kempfer identified a fundamental and well-defined public policy, (2) whether Kempfer, an employee-at-will, demonstrated that he was terminated for refusing to act contrary to a fundamental and well-defined public policy; and (3) whether the circuit court erroneously exercised its discretion by allowing the jury to consider awarding damages of future wage loss. We hold that Kempfer identified a fundamental and well-defined public policy and that he was terminated for refusing to act contrary to that public policy; however, we also hold that the circuit court erroneously exercised its discretion when it allowed the jury to consider awarding damages for Kempfer's future wage loss. The circuit court should have determined whether reinstatement was feasible. If it was not feasible, the circuit court should have determined what amount, if any, of front pay was necessary to make Kempfer whole. Thus, we affirm in part and reverse in part the decision of the circuit court.

¶ 3. The relevant facts are not in dispute. Kempfer was hired by the defendant, AFI, on October 8, 1981. He was initially assigned to perform urethane mold work. After approximately five years, Kempfer's job duties began to vary and at some point AFI began to ask Kempfer and three other employees to make as-needed deliveries with a 22-foot International Harvester flatbed truck. The truck had been purchased in 1984 and its weight was registered with the Department of Transportation as 32,000 pounds. At the time Kempfer began driving the truck, AFI indicated that the only requirement was that the drivers hold a valid, regular driver license.

¶ 4. On March 1,1993, Kempfer, while returning from a delivery, was stopped by a state patrol officer who had noticed that the truck had a cracked windshield. The officer issued warning tickets to AFI for the cracked windshield and to Kempfer for not having a commercial driver license (CDL). The officer explained that due to the weight of his truck Kempfer was required by law to hold a CDL and that further violations would result in personal fines and/or jail time.

f 5. When he returned to the plant, Kempfer gave both citations to the plant manager. Kempfer then made the first of four trips to the Department of Motor Vehicles (DMV) to learn more about the CDL requirements. He picked up some informational booklets about the CDL requirements which he later gave to his employer.

¶ 6. AFI subsequently asked Kempfer to drive the truck on six separate occasions. Kempfer refused each time stating that he did not have the required CDL to drive the truck. Kempfer stated that he was not told by AFI to get a CDL and that he would have needed to use AFI's truck to take the test. Accordingly, he never obtained a CDL.

¶ 7. On the morning of April 16, 1994, the plant manager again told Kempfer to drive the truck. Kempfer refused stating that he did not have the proper licensing. The plant manager found another employee to drive the truck, and reported Kempfer's refusal. As a result, Kempfer was suspended for two days. Kempfer then went to the DMV for a fourth time. An employee at the DMV called AFI to explain the CDL requirement for operation of the company truck.

¶ 8. Upon returning from his suspension on April 20, 1994, Kempfer was informed that his position had been eliminated, and, accordingly, he was fired. Kempfer's foreman, Mark Bonney, was also fired for refusing to sign Kempfer's suspension notice.

¶ 9. Kempfer filed suit alleging that he was wrongfully discharged for refusing to violate public policy. AFI argued at trial that Kempfer was released because of cost-cutting efforts to reduce the labor force. Following a three-day trial, the jury found that Kempfer was suspended and fired for his refusal to operate the company truck without a CDL. Kempfer was awarded back pay and benefits in the amount of $22,167. The jury also awarded Kempfer $145,000 for future lost wages and benefits. The circuit court denied AFI's motions after verdict and AFI appealed.

H-i

¶ 10. The first issue that we address is whether as a matter of law, Kempfer identified a fundamental and well-defined public policy. This issue is a question of law, Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d , 335 N.W.2d 834 (1983), that this court reviews de novo. Winkelman v. Beloit Memorial Hospital, 168 Wis. 2d 12, 24, 483 N.W.2d 211 (1992). The plaintiff-employee bears the burden of proving that the dismissal violates a clear mandate of public policy. Brockmeyer, 113 Wis. 2d at 574.

¶ 11. Under the employee-at-will doctrine, an employer may discharge an employee-at-will "for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong." Id. at 567. However, this court has recognized a "narrowly circumscribed public policy exception" to this general rule. Id. at 574. Specifically, this exception provides that an employer may not discharge an employee for refusing a command to violate a fundamental and well-defined public policy. Bushko v. Miller Brewing Co., 134 Wis. 2d 136, 141, 396 N.W.2d 167 (1986).

¶ 12. This court first recognized the public policy exception to the employee-at-will doctrine in Brockmeyer. In that case, this court explained what was meant by a fundamental and well-defined public policy:

Public policy is a broad concept embodying the community common sense and common conscience. . . .The provisions of the Wisconsin Constitution initially declared the public policies of this state. Each time the constitution is amended, that also is an expression of public policy. In addition, public policy is regularly adopted and promulgated in the form of legislation. These declarations of public policy are inherently incorporated into every employment at will relationship.

Given the vagueness of the concept of public policy, it is necessary that we be more precise about the contours of the public policy exception. A wrongful discharge is actionable when the termination clearly contravenes the public welfare and gravely violates paramount requirements of public interest. The public policy must be evidenced by a constitutional or statutory provision. An employee cannot be fired for refusing to violate the constitution or a statute. Employers will be held liable for those terminations that effectuate an unlawful end.

We intend to recognize an existing limited public policy exception. An employer may not require an employee to violate a constitutional or statutory provision with impunity. If an employee refuses to act in an unlawful manner, the employer would be violating public policy by terminating the employee for such behavior.

Brockmeyer, 113 Wis. 2d at 573 (emphasis added). However, this court warned:

Courts should proceed cautiously when making public policy determinations. No employer should be subject to suit merely because a discharged employee's conduct was praiseworthy or because the public may have derived some benefit from it.

Id. at 573-74. This court's rejection of an expansive exception to the employee-at-will doctrine is also illustrated by the refusal in Brockmeyer to impose an implied covenant and fair dealing on employers:

We refuse to impose a duty to terminate in good faith into employment contracts. To do so would "subject each discharge to judicial incursions into the amorphous concept of bad faith." Moreover, we feel it unnecessary and unwarranted for the courts to become arbiters of any termination that may have a tinge of bad faith attached. Imposing a good faith duty to terminate would unduly restrict an employer's discretion in managing the work force.

Id. at 569 (citation omitted).

¶ 13. This court again considered Wisconsin's narrow public policy exception to the employee-at-will doctrine in Bushko, 134 Wis. 2d 136. In that case, this court considered whether the public policy exception included employees who were discharged for acting consistent with a fundamental and well-defined public policy when there was no order by the employer to violate the public policy. This court stated:

The plaintiff is not required under Brockmeyer to prove the employer had an evil intent in the discharge. Likewise, gratuitous allegations or other evidence of evil intent will not save a cause of action from defendant's motion for summary judgment if the elements required by Brockmeyer are not present. Brockmeyer requires an employee allege and attest that he was discharged for refusing to violate a constitutional or statutory provision. Although Brockmeyer was intended to provide relief for the employee who was a victim of evil intent, it did so under very limited circumstances. Brockmeyer defined the cause of action and the standards for summary judgment in such a way that the trial judge need not inquire into the intent of the employer.

An employee who refuses a command to violate public policy is acting consistent with public policy. However, if the employee of his own volition acts consistently with public policy, he does no more than obey the law. Such consistent action, without an employer's command to do otherwise, is merely "praiseworthy" conduct.

Id. at 141-42. Accordingly, the public policy exception does not apply in cases where the employee-at-will is simply discharged for acting consistently with the fundamental and well-defined public policy; there must be an order by the employer to violate the public policy.

¶ 14. We are provided with further guidance on the scope of this public policy exception by this court's decision in Winkelman, 168 Wis. 2d 12. In that case, this court considered whether a fundamental and well-defined public policy could be evidenced by an administrative rule rather than a statutory or constitutional provision. Id. at 21. This court stated:

We hold that where a fundamental and well-defined public policy is evidenced by an administrative rule, a discharge for refusal to violate that public policy is actionable. The guiding principle of Brockmeyer is not a slavish adherence to the arbitrary requirement that the public policy be evidenced by a statutory or constitutional procedure; rather, it is that an employer must not be allowed to discharge an employee for the employee's refusal to violate a formally stated, fundamental and well-defined public policy which has the effect of law. Heretofore we have required that the public policy be evidenced by a statutory or constitutional provision as a means to protect the public from frivolous lawsuits by allowing the circuit court to screen cases on motions to dismiss or motions for summary judgment. [Brockmeyer, 113 Wis. 2d at 574]. The facts of this case make clear that public policy that is fundamental and important may be enunciated' in administrative rules and that to use such rules will not frustrate this type of screening. An administrative rule, as well as statutory or constitutional provision, may contain a clear expression of public policy.

Id. at 22. Accordingly, in Winkelman, this court recognized that the definition of the public policy exception in Brockmeyer includes fundamental and well-defined public policies that are evidenced by statutory, constitutional, or administrative provisions. However, this definition does not include case law and it does not mean that every statutory, constitutional, or administrative provision evidences a fundamental and well-defined public policy.

¶ 15. If a public policy is not contained in a statutory, constitutional, or administrative provision, it cannot fall under the public policy exception to the employee-at-will doctrine. However, just because a public policy is evidenced by a statutory, constitutional, or administrative provision does not mean that it falls under the exception. This was recognized by this court in Winkelman:

We however do not hold that all administrative rules implicate fundamental public policy. Neither do all statutes. Rather, it is the content of either a rule or statute that determines whether a fundamental public policy is stated.

Id. at 24. Accordingly, the public policy must still be found to be fundamental and well defined. This is determined by the guidelines set forth in Brockmeyer. See Brockmeyer, 113 Wis. 2d at 573-74.¹

¶ 16. Thus, the Wisconsin public policy exception to the employee-at-will doctrine is very narrow. It only provides that an employee may not be discharged for refusing a command to violate a fundamental and well-defined public policy that is evidenced by a constitutional, statutory, or administrative provision. With the exception of such a public policy, an employer may discharge an employee-at-will for any reason or no reason.

¶ 17. AFI contends that the public policy recognized by the circuit court — that an employer cannot require someone to violate the law — was not grounded in a specific constitutional or statutory provision which evidenced a fundamental and well-defined public policy. Kempfer asserts that the circuit court identified two fundamental and well-defined public policies: (1) the public policy against improperly licensed commercial drivers evidenced by Wis. Stat. § 343.05(2)(a) (1993-94);² and (2) the public policy against employers ordering employees to violate a statute that carried criminal penalties.

¶ 18. We find that Kempfer identified a fundamental and well-defined public policy sufficient to invoke Wisconsin's public policy exception to the employee-at-will doctrine. Wis. Stat. § 343.05(2)(a) sets forth the requirements for operating a commercial vehicle in Wisconsin. If a person operates a commercial vehicle without complying with these requirements the driver and his or her employer may be subject to penalties under Wis. Stat. § 343.245. The guidelines for operating a commercial vehicle contained in § 343.05(2)(a) which are designed to promote highway safety and violation of which may be punished by fine andlor incarceration constitute a fundamental and well-established public policy-to promote highway safety through the use of regulations and penalties.

II.

¶ 19. The next issue that we address is whether Kempfer, an employee-at-will, demonstrated that he was terminated for refusing to act contrary to a fundamental and well-defined public policy. This is a jury finding that this court will not overturn if there is any credible evidence that supports the verdict. Coryell v. Conn, 88 Wis. 2d 310, 315, 276 N.W.2d 723 (1979). In addition, this court views the evidence in the light most favorable to the verdict. Roach v. Keane, 73 Wis. 2d 524, 536, 243 N.W.2d 508 (1976).

¶ 20. As we have already found that Kempfer identified a fundamental and well-defined public policy, we need only determine whether any credible evidence supports the jury's finding that Kempfer was discharged for refusing to act contrary to that public policy. AFI contends that there is no evidence to support that Kempfer was terminated for failing to act contrary to a fundamental public policy. In support of this contention, AFT states that only Kempfer could have obtained a CDL and that AFI did not prevent him from doing so. AFI further states that it only told Kempfer to "drive the truck."

¶ 21. We conclude that under the facts of this case commanding Kempfer to drive the truck with full knowledge that he did not have the required license is tantamount to commanding him to violate public policy. At the time that AFI ordered him to drive the truck it knew that Kempfer did not have a CDL. Kempfer refused to drive the truck and was suspended by AFI. Accordingly, there is credible evidence to support the jury's finding that Kempfer was discharged for refusing to act contrary to a fundamental and well-defined public policy.

III

¶ 22. The last issue that we consider is whether the circuit court erroneously exercised its discretion by allowing the jury to consider awarding damages of future wage loss. Discretionary acts of the circuit court are upheld absent an erroneous exercise of discretion. Johnson v. Johnson, 78 Wis. 2d 137, 143-44, 254 N.W.2d 198, 202 (1977). Failure to apply the proper standard of law is an erroneous exercise of discretion. Loy v. Bunderson, 107 Wis. 2d 400, 411-15, 320 N.W.2d 175 (1982).

¶ 23. During the course of the trial in this case, the circuit court decided to allow the jury to consider whether Kempfer would suffer a future wage loss. The circuit court gave the jury the following instruction:

If you are satisfied that the plaintiff will suffer a future wage and benefit loss as the natural result of his wrongful discharge, then include in your answer to question 2 such sum as will fairly and reasonably compensate plaintiff for such future loss of wages and benefits ...

AFI contends that this was an erroneous exercise of the circuit court's discretion because in an at-will employment relationship there are no foreseeable future damages upon which to base an award of future lost earnings because the parties cannot foresee the duration of the employment relationship. Kempfer asserts that the decisions of the court of appeals in Weyenberg Shoe Mfg. Co. v. Seidl, 140 Wis. 2d 373, 410 N.W.2d 604 (Ct. App. 1987), Brogan v. Industrial Casualty Ins. Co., 132 Wis. 2d 229, 392 N.W.2d 439 (Ct. App. 1986), and Hale v. Stoughton Hosp. Assoc., Inc., 126 Wis. 2d 267, 376 N.W.2d 89 (Ct. App. 1985), illustrate that future wages are an available remedy in public policy exception cases.

¶ 24. In Weyenberg, a jury determined that the employee had been wrongfully terminated for participating in national guard exercises. The jury awarded the employee $57,000 for past damages, $35,000 for future damages, and $15,000 for lost employee benefits. The court of appeals agreed with the trial court that there was sufficient evidence to support the jury's finding that the plaintiff was terminated for participating in the national guard exercises. However, the court of appeals also held that the termination did not fall under the Brockmeyer public policy exception to the employee-at-will doctrine:

Because [the plaintiffs] action in going to guard camp is consistent with public policy rather than a refusal to violate public policy, termination for said conduct does not fall within the extremely narrow exception of the employment at will doctrine under Brockmeyer smdBushko.

Weyenberg, 140 Wis. 2d at 383 (emphasis in original). The court of appeals instead upheld the jury's award of damages based on a finding that the plaintiff had been discharged in violation of the Vietnam Era Veterans' Readjustment Assistance Act, 38 U.S.C. § 2021(b)(3) (1982). Kempfer contends that the Weyenberg decision is significant because the court of appeals upheld the propriety of the jury's award of future damages to an at-will employee. We do not find this case significant as it does not concern the public policy exception to the employee-at-will doctrine. Whether an award of future damages is appropriate under 38 U.S.C. § 2021(b)(3) (1982) does not bear on whether such an award is consistent with Brockmeyer, and, thus, available under the public policy exception to the employee-at-will doctrine.

¶ 25. The next case that Kempfer relies on, Brogan, also did not involve the public policy exception to the employee-at-will doctrine. This was a breach of contract case that centered on whether the contract was rendered void by Wis. Stat. § 611.63 (1983-84). Brogan, 132 Wis. 2d at 233. The court of appeals held that the contract was not void and upheld the jury's award of future damages to the plaintiff. Of particular significance, according to Kempfer, is the court of appeals' statement that "[t]he amount of damages awarded is a matter resting largely in the jury's discretion." Id. at 238. In so relying on the court of appeals' decision in Brogan, Kempfer fails to consider the distinction between those employed pursuant to a contract and those who are employed at will. This case does not pertain to the at-will employment relationship and is not relevant to our decision.

¶ 26. Kempfer also relies on the court of appeals' decision in Hale. In that case, the plaintiff brought suit against his former employer for wrongful termination and tortious interference with contract. At trial, the jury was given two verdict questions. The first question involved whether the defendant-employer had wrongfully terminated the plaintiff-employee. This question and the accompanying instruction was derived from the court of appeals decision in Brockmeyer v. Dun & Bradstreet, 109 Wis. 2d 44, 325 N.W.2d 70 (Ct. App. 1982). The second question concerned the tortious interference with contract claim. The jury did not answer the second question, but found that the plaintiff had been wrongfully discharged. Shortly after the jury returned its verdict in Hale, this court rejected the court of appeals' holding in Brockmeyer. The circuit court concluded that it had applied the wrong law and ordered a new trial on whether the plaintiff-employee had been wrongfully terminated. Kempfer contends that Hale supports his position because the court of appeals endorsed the award of future wages in a wrongful termination case. What Kempfer fails to mention is that the plaintiff-employee in Hale was not an employee-at-will. The court of appeals stated:

Nor does the wrongful termination question and instruction adequately describe the duty that the hospital accepted in its bylaw. We agree that the bylaw creates more than a mere "at will" employment relationship. Unlike an "at will" employer, the [defendant-employer] could not discharge [the plaintiff-employee] for any or even no cause.

Hale, 126 Wis. 2d at 275. Thus, neither Hale, Weyenberg, nor Brogan is relevant to whether an employee-at-will who is discharged for refusing to violate a fundamental public policy is entitled to front pay.

¶ 27. Our determination of this issue is controlled by this court's decision in Brockmeyer. In Brockmeyer, this court held that under Wisconsin's public policy exception to the employee-at-will doctrine, the wrongfully discharged employee's right to compensation is in contract. In reaching this conclusion, the court considered whether such a wrongful discharge suit would most appropriately be brought as a tort or contract action. This court determined that contract was more appropriate because the damages available in those suits best reflected the damages stemming from wrongful discharge suits:

The most significant distinction in our view between the two causes of action in wrongful discharge suits is in the damages that may be recovered. In tort actions, the only limitations are those of "proximate cause" or public policy considerations. Punitive damages are also allowed. In contract actions, damages are limited by the concepts of foreseeability and mitigation. The remedies established by the majority of Wisconsin wrongful discharge statutes are limited to reinstatement and backpay, contractual remedy concepts. We believe that reinstatement and backpay are the most appropriate remedies for the public policy exception wrongful discharges since the primary concern in these actions is to make the wronged employee "whole." Therefore, we conclude that a contract action is most appropriate for wrongful discharges.

Brockmeyer, 113 Wis. 2d at 575 (emphasis added). Accordingly, Brockmeyer stands for the proposition that reinstatement and backpay are the most appropriate remedies.

¶ 28. Kempfer argues that Brockmeyer did not expressly limit the damages for a wrongfully discharged employee-at-will to reinstatement and backpay when there is a more appropriate remedy. According to Kempfer, it is more appropriate in this case to award him future wages instead of reinstatement. We agree that there may be some cases where an award of front pay in lieu of reinstatement is necessary to make the wronged employee whole. However, as Brockmeyer limited damages in almost all cases to reinstatement and backpay, front pay can only be available when there is no other avenue to make the employee whole. In other words, front pay is only an available remedy in those cases in which the employee has been discharged for refusing to violate a fundamental and well-defined public policy and reinstatement is not feasible.

¶ 29. Reinstatement is not feasible if the employee cannot be placed in the same or a similar position or if the company refuses to reinstate the employee. However, reinstatement is not infeasible simply because a plaintiff claims that he or she does not get along with the employer or because the plaintiff claims that he or she is not comfortable working for someone who previously terminated him or her.

¶ 30. In those situations where reinstatement is not feasible an award of front pay is still limited by the concepts of foreseeability and mitigation. See Brockmeyer, 113 Wis. 2d at 575; see also Klug v. Flambeau Plastics Corp., 62 Wis. 2d 141, 155, 214 N.W.2d 281 (1974) (requiring that the injured party in an employment situation "must make reasonable efforts to mitigate damages."). Thus, in determining whether front pay is available, when reinstatement has already been deemed infeasible, the court must consider (1) the extent of front pay, if any, foreseeable under the circumstances of the case, and (2) what effect the employee's mitigation will have on the award of front pay.

¶ 31. Accordingly, the circuit court must first determine whether reinstatement is feasible. If the circuit court concludes that reinstatement is not feasible then the court rather than the jury should determine the amount of front pay, if any, that is necessary to make the wronged employee whole. See Stafford v. Electronic Data Systems Corp., 741 F. Supp. 664, 667 (E.D. Mich. 1990). In the present case, the circuit court did not consider whether reinstatement was infeasible, but submitted the question of front pay to the jury. Thus, we hold that the circuit court erroneously exercised its discretion when it allowed the jury to consider future wage loss in its damages determination. The cause is remanded for a determination of whether reinstatement is not feasible, and, if so, for a calculation of front pay by the circuit court.

By the Court. — The decision of the circuit court is affirmed in part and reversed in part.

1 We note that an administrative rule is less likely to satisfy the fundamental and well-defined requirements than a statutory provision and that a statutory provision is less likely to rise to the level of fundamental and well defined than a constitutional provision.

2 Unless otherwise stated, all future statutory references are to the 1993-94 volume. Wis. Stat. § 343.05(2)(a) provides in relevant part:

(2) Commercial Motor Vehicles, (a) No person may operate a commercial motor vehicle upon a highway in this state unless the person is one of the following:

1. A resident who is at least 18 years of age, who is not disqualified under s. 343.315, who has a valid commercial driver license which is not revoked, suspended, canceled, or expired and, for the operation of any vehicle type under s. 343.04(2), has an endorsement authorizing operation of the vehicle type.