Stephen Wesbrook v. Karl Ulrich

840 F.3d 388, 2016 U.S. App. LEXIS 18872, 2016 WL 6123534
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 20, 2016
Docket15-3870
StatusPublished
Cited by33 cases

This text of 840 F.3d 388 (Stephen Wesbrook v. Karl Ulrich) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Stephen Wesbrook v. Karl Ulrich, 840 F.3d 388, 2016 U.S. App. LEXIS 18872, 2016 WL 6123534 (7th Cir. 2016).

Opinion

HAMILTON, Circuit Judge.

This appeal presents issues under Wisconsin law on the scope of tort remedies a fired at-will employee might have not against his employer but against individual supervisors and co-workers. Plaintiff Dr. Stephen Wesbrook, a former employee of the Marshfield Clinic Research Foundation, brought this lawsuit against Dr. Edward Belongia, a former colleague, and Dr. *391 Karl Ulrich, the chief executive officer of the Marshfield Clinic. Wesbrook contends that Belongia and Ulrich tortiously interfered with his at-will employment, engineering his termination by publishing defamatory statements about him to the Marshfield Clinic board of directors.

The district court. granted summary judgment to the defendants. Wesbrook has appealed. Wisconsin. tort law governs this case, which is within the federal courts’ diversity jurisdiction under 28 U.S.C. § 1332. The undisputed facts show that the defendants’ statements about the plaintiff were true or substantially true and therefore privileged. Under Wisconsin law, an at-will employee cannot recover from former co-workers and supervisors for tor-tious interference on the basis of their substantially ..truthful statements made within the enterprise, no matter the motives underlying those statements. We therefore affirm the judgment of the district court.

I. Factual and Procedural Background

We review de novo the district court’s grant of summary judgment to the defendants. Boston v. U.S. Steel Corp., 816 F.3d 465, 462 (7th Cir. 2016). To prevail on summary judgment, the defendants must show that there is no “genuine dispute as to any material fact” and that they are entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Like the district court, we must construe all evidence and draw all reasonable inferences in favor of the non-moving party, plaintiff Wesbrook. See Woods v. City of Berwyn, 803 F.3d 865, 869 (7th Cir. 2015).

A. The Parties

This case arises from strategic disagreements and a power struggle within the Marshfield Clinic, a prominent not-for-profit health care system headquartered in Marshfield, Wisconsin. At all relevant times, defendant Ulrich served' as president and chief executive officer of the Clinic and as a member of its board of directors. One of the Clinic’s divisions is the Marshfield Clinic Research Foundation (“the Research'Foundation”), which'is the largest private medical research institute in Wisconsin. During the years in question, Dr. Humberto Vidaillet served as director of the Research Foundation. Plaintiff Wes-brook was deputy director from 2006 until his termination took effect January 2, 2012. Defendant Belongia was also employed at the- Research Foundation as a senior research scientist and research center director. " ''

B. Conflict at the Research Foundation ■

Proceedings in the district court narrowed Wesbrook’s allegations against Ul-rich and Belongia to a claim for tortious interference with his employment based on four statements that Ulrich' published to the Clinic’s board of directors: (1) Wes-brook coerced Research Foundation employees he supervised; (2) some Research Foundation employees filed complaints against Wesbrook; (3) Wesbrook breached a performance improvement plan; and (4) a prominent supporter of the Clinic spoke with over forty people associated with the Clinic and the Research Foundation, many of whom complained about Wesbrook. As explained below, each of these statements was substantially true, but some further factual background is needed to understand this litigation and the implications of the parties’ legal positions.

Wesbrook’s tenure as deputy director of the Research Foundation was marked by internal conflict. Problems first surfaced during , his candidacy for the deputy position. One member of the interview committee remarked: “I would be reluctant to *392 hire someone who has so clearly and dramatically polarized the basic scientists that constitute the ‘core’ of the research organization.” (Wesbrook was then already known to the committee; he had worked at the Research Foundation previously, from 2000 to 2005.) Another employee threatened to resign if Wesbrook were rehired and followed through on that threat shortly after Wesbrook returned.

Though Wesbrook had a good working relationship with his immediate supervisor, Vidaillet, his relationship with Ulrich was stormy. Ulrich wanted to change the Clinic’s organizational structure. On several occasions between May 2008 and September 2011, Ulrich tried but failed to reduce the independence of the Research Foundation’s board of trustees and to transfer oversight of the Research Foundation’s endowment to the Clinic’s executive leadership. Collaborating with Vidaillet and the Research Foundation’s trustees, Wesbrook helped defeat these efforts.

In July 2008, Ulrich also circulated a shareholder proposal to switch the Clinic from its democratic, physician-led governance structure to a more conventional corporate model. According to .Vidaillet, the proposal would have resulted in Ul-rich’s automatic selection as interim CEO, a position that would have given him substantial influence over appointments of new board members. Vidaillet vigorously opposed Ulrich’s plan, and he recruited Wesbrook to help his campaign against it. Ulrich’s proposal was defeated, as were similar proposals in 2009 and 2011. 1

C. Employee Complaints

The undisputed evidence also shows conflict and tension within the Research Foundation where Wesbrook was deputy director. In March 2010, an employee alerted David Keefe, director of human resources, that Wesbrook and Vidaillet had been making derogatory comments about Research Foundation scientists, prompting some of them to resign. Then another employee alerted the Research Foundation’s board of trustees that fifteen scientists had left the foundation since 2006. On April 13, 2010, the Clinic’s board of directors asked the human resources department to investigate why the fifteen scientists had left and whether there was a “culture of intimidation” at the Research Foundation.

Keefe investigated. He spoke with nine of the fifteen scientists who had left the Research Foundation. In response to open-ended questions, several described Wes-brook’s management style using words such as “cold, militaristic, harsh, retaliatory, abusive, negative, hostile, confrontational, out of control, threatening, boot-camp-like, and contentious.” While Keefe was investigating, other employees brought additional concerns to Ulrich’s attention. One research scientist told Ulrich that Wesbrook’s management style was “oppressive” and that he “retaliated *393

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840 F.3d 388, 2016 U.S. App. LEXIS 18872, 2016 WL 6123534, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephen-wesbrook-v-karl-ulrich-ca7-2016.