Jane Hausman v. St. Croix Care Center
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SUPREME COURT OF WISCONSIN Case No.: 96-0866 Complete Title of Case: Jane Hausman and Karen Wright, Plaintiffs-AppellantsPetitioners, v. St. Croix Care Center, Defendant-Respondent. REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 207 Wis. 2d 402, 558 N.W.2d 893 (Ct. App. 1996) PUBLISHED Opinion Filed: Submitted on Briefs: Oral Argument: Source of APPEAL COURT: COUNTY: JUDGE: December 19, 1997 October 8, 1997 Circuit Pierce Robert W. Wing JUSTICES: Concurred: Dissented: Not Participating: ATTORNEYS: For the plaintiffs-appellants-petitioners there were briefs by Carol N. Skinner, Peter M. Reinhardt and Bakke Norman, S.C., New Richmond and oral argument by Carol N. Skinner. For the defendants-respondents there was a brief by Maureen A. Molony, John M. Loomis, Katherine L. Williams, and Beck, Chaet, Loomis, Molony & Bamberger, S.C., Milwaukee and oral argument by Katherine L. Williams. Amicus curiae brief was filed by William P. Donaldson for the Wisconsin Board on Aging and Long Term Care, Madison. Amicus curiae was filed by Betsy J. Abramson for the Elder Law Center of the Coalition of Wisconsin Aging Groups, Madison. Amicus curiae was filed by Timothy G. Costello, Mark A. Johnson, and Krukowski & Costello, S.C., Milwaukee for the Wisconsin Manufacturers & Commerce. No. 96-0866 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 96-0866 STATE OF WISCONSIN : IN SUPREME COURT FILED Jane Hausman and Karen Wright, DEC 19, 1997 Plaintiffs-AppellantsPetitioners, Marilyn L. Graves Clerk of Supreme Court Madison, WI v. St. Croix Care Center, Defendant-Respondent. REVIEW of a decision of the Court of Appeals. ¶1 Karen ANN WALSH BRADLEY, Wright decision seek affirming review a of circuit J. a Plaintiffs published court order Reversed. Jane court that Hausman of and appeals' dismissed the plaintiffs' suit for failure to state a claim upon which relief could be granted.1 defendant, assert St. The plaintiffs, discharged employees of the Croix Care that the facts as Center, alleged Inc. ("St. conform Croix"), to the first established public policy exception to the employment-at-will doctrine. In the alternative, the plaintiffs ask this court to broaden the public policy exception. The plaintiffs also argue that Wis. 1 See Hausman v. St. Croix Care Center, 207 Wis. 2d 402, 558 N.W.2d 893 (Ct. App. 1996)(affirming order of Circuit Court for Pierce County, Robert W. Wing, Judge). 1 No. 96-0866 Stat. § 50.07(1)(e)(1993-94)2 provides an implied private right of action for retaliatory discharge. ¶2 We reject the plaintiffs' claims that the facts as alleged fit within the existing public policy exception and we decline to adopt a broad whistle-blower exception. However, we recognize that the plaintiffs' compliance with an affirmative legal duty requiring them to take action to prevent abuse or neglect of nursing home residents comports with a well-defined public policy and the rationale of our public policy exception to the employment-at-will doctrine. Accordingly, we apply the public policy exception to the allegations here and conclude that the trial court erred in granting St. Croix's motion to dismiss. Therefore, we reverse the decision of the court of appeals. ¶3 St. Croix, a private nursing home facility in St. Croix County, Wisconsin, employed the plaintiffs, Jane Hausman and Karen Croix's Wright. Resident Wright, Care a licensed Coordinator, nurse, while worked Hausman, a as St. licensed social worker, was the Director of Social Services at St. Croix. Both women were also members of a five-person interdisciplinary care team at St. Croix charged with ensuring that St. Croix provided appropriate and sufficient care to its residents. ¶4 In late 1992, Hausman, Wright, and two other members of the care team became concerned that certain residents of St. 2 Unless otherwise indicated, references are to the 1993-94 volumes. 2 all future statutory No. 96-0866 Croix's nursing home were not receiving appropriate care. concerns included: patients falling from beds and These suffering injuries, staff members failing to respond to residents' calls for help, disrespectful treatment of patients, improper diets, and a failure by St. Croix to investigate injuries to residents. Hausman and Wright approached St. Croix's director of nursing, also a member of the interdisciplinary care team, about these concerns.3 ¶5 Hausman 1993. No action was taken. Undeterred and Wright by the nursing approached St. home's Croix's lack of reaction, administrators in Once again, St. Croix failed to act to alleviate Hausman and Wright's fears of abuse and neglect. then moved beyond filing internal Hausman and Wright complaints. Instead, the plaintiffs contacted the Regional Ombudsman, the state officer entrusted by statute with the duty of identifying, investigating, and resolving complaints made by or on behalf of 3 Wis. Stat. § 940.295(3) states in pertinent part: 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. 3 No. 96-0866 providers of nursing home care.4 After an investigation, the Regional Ombudsman concluded that "areas of concern" existed at St. Croix. Hausman asked the Regional Ombudsman to request an investigation of St. Croix by the Bureau of Quality Compliance. Hausman also contacted the relatives of some of St. Croix's residents and ultimately approached St. Croix's Board of Directors. ¶6 The Bureau of Quality Compliance Croix's facilities beginning in July 1993. its investigation without issuing any investigated St. The Bureau concluded citations, and without interviewing any of the four members of the interdisciplinary team who brought forward concerns of alleged abuse or neglect. The Board of Directors of St. Croix also took no action to address the plaintiffs' concerns. ¶7 St. Croix suspended Hausman in late June 1993, pending investigation assistant. of a disciplinary matter involving a nursing She was terminated by St. Croix two weeks later, allegedly for unprofessional conduct and breach of confidence. 4 42 U.S.C. § 3058(g) declares that the Regional Ombudsman shall investigate and resolve complaints that are made by or on behalf of residents that relate to actions or omissions that adversely affect the health, safety, welfare or rights of nursing home residents. In addition, Wis. Stat. § 16.009(4)(a) states in pertinent part: The [Board of Aging and Long Term the office [of the Long Term Care to carry out the requirements of ombudsman program under 42 U.S.C. 42 U.S.C. 3058f to 3058h. 4 Care] shall operate Ombudsman] in order the long-term care 3027(a)(12)(A) and No. 96-0866 She was never interviewed about the disciplinary matter. St. Croix also terminated Wright three months later, on ten minutes notice, claiming budgetary constraints. ¶8 Hausman and Wright filed suit in the circuit court, alleging a private right of action under Wis. Stat. § 50.07,5 wrongful termination through breach of public policy, negligent misrepresentation, misrepresentation. and strict responsibility for The circuit court dismissed the plaintiffs' suit for failure to state a claim upon which relief could be granted.6 5 Wis. Stat. § 50.07 states in pertinent part: (1) No person may: (e) Intentionally retaliate or discriminate against any resident or employe for contacting or providing information to any state official, or for initiating, participating in, or testifying in an action for any remedy authorized under this subchapter. (2) Violators of this section may be imprisoned up to 6 months or fined no more than $1,000 or both for each violation. 6 The plaintiffs also filed a complaint with the Department of Industry, Labor and Job Development, pursuant to Wis. Stat. § 46.90. Wis. Stat. § 46.90(4) states in pertinent part: (a) 1. Any person may report to the county agency that he or she believes that abuse, material abuse or neglect has occurred if the person is aware of facts or circumstances that would lead a reasonable person to believe or suspect that abuse . . . has occurred. (b) 1. No employer may discharge or otherwise discriminate against any person for reporting in good faith under this subsection. 5 No. 96-0866 ¶9 The plaintiffs appealed. Affirming the circuit court, the court of appeals held that a private right of action does not exist under Wis. Stat. § 50.07. The court of appeals also held that the facts as alleged by the plaintiffs did not meet the requirements of Wisconsin's established wrongful discharge public policy exception and that it lacked the authority to apply the public policy exception to the plaintiffs' wrongful termination claim. plaintiffs' Finally, the court of appeals held that the allegations did not state a claim for misrepresentation.7 ¶10 Dismissal for failure to state a claim is a question of law which we determine de novo. See Watts v. Watts, 137 Wis. 2d 506, 512, 405 N.W.2d 305 (1987). In conducting our analysis, we must accept as true the facts alleged in the complaint as well as all reasonable inferences to be drawn from those facts. See id. Accordingly, for purposes of our review, we accept as true the plaintiffs' allegations that they were terminated in retaliation for reporting Regional Ombudsman. Since their suspicions the complaint of is to abuse be to the liberally construed, we may dismiss the claim only if it is "quite clear An administrative law judge dismissed the complaint because the plaintiffs reported their concerns to the state, instead of to a county agency. The decision was affirmed by the Labor and Industry Review Commission as well as the circuit court of Dane County, Mark J. Frankel, Judge. See Order, Case No. 96CV798, entered May 6, 1997. 7 The plaintiffs do not appeal the dismissal of their misrepresentation claims. 6 court of appeals' No. 96-0866 that under no conditions can the plaintiff recover." Evans v. Cameron, 121 Wis. 2d 421, 426, 360 N.W.2d 25 (1985). ¶11 The question of whether compliance with an affirmative legal command that causes an employee to report abuse of nursing home residents constitutes an exception to the employment-atwill doctrine is one which this court has not previously faced. To resolve this issue, we must reexamine the employment-at-will doctrine, survey the breadth of the narrow public policy exception to the doctrine, and determine whether the case at hand falls within its requirements. not, we must exception to obligation consider include to whether In the event that it does applying individuals prevent abuse of who the public comply nursing with home policy a legal residents by reporting certain information comports with our prior case law. ¶12 The employment-at-will doctrine is an established general tenet of workplace relations in this jurisdiction. See Prentiss v. Ledyard, 28 Wis. 131, 133 (1871); Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 335 N.W.2d 834 (1983). applicable, the doctrine generally allows an Where employer to discharge an employee "for good cause, for no cause, or even for cause morally wrong." ¶13 wrong, rule being thereby guilty of legal Brockmeyer, 113 Wis. 2d at 567. However, the right to summarily fire an employee is not all-pervasive. are without instances would in lead In the past we have recognized that there which to application injustice. of "A the employment-at-will wrongful discharge is actionable when the termination clearly contravenes the public 7 No. 96-0866 welfare and gravely violates paramount requirements of public interest." Id. at 573. Accordingly, "an employee has a cause of action for wrongful discharge when the discharge is contrary to a fundamental and well-defined public policy as evidenced by existing law." ¶14 Id.; see also Wis. J.I.-Civil 2750. The Brockmeyer court discovered such fundamental and well-defined public provisions. See public policy termination policy in Brockmeyer, statements action do constitutional 113 that not Wis. 2d give arise and 573. at rise However, to a wrongful from solely constitutional or legislative statements. statutory explicit In Wandry v. Bull's Eye Credit Union, 129 Wis. 2d 37, 384 N.W.2d 325 (1986), we acknowledged that a plaintiff could find public policy foundations for a wrongful termination suit in "the spirit as well as the provisions. 21, 483 letter" constitutional and legislative Winkelman v. Beloit Memorial Hosp., 168 Wis. 2d 12, N.W.2d Winkelman, of we 211 (1992)(discussing determined that Wandry). public policy Moreover, could also in be evinced by an administrative rule. ¶15 Cognizant of the far reaching implications of holding that an employee's termination for acting in accordance with general public policy was actionable under the wrongful discharge doctrine, we expressly limited the scope of the policy exception to the employment-at-will doctrine in Bushko v. Miller Brewing Co., 134 Wis. 2d 136, 396 N.W.2d 167 (1986). we concluded invokes the that public a discharge policy of an exception 8 at-will where the In Bushko employee employee only is No. 96-0866 terminated for refusing a command, instruction, or request of the employer to violate public policy as established in existing law. See id. at 142; see also Kempfer v. Automated Finishing, Inc., 211 Wis. Accordingly, 2d where 100, an 110-111, employee 564 N.W.2d voluntarily 692 (1997). undertakes acts consistent 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." Bushko, 134 Wis. 2d at 142. ¶16 It is uncontested by the parties to this suit that the plaintiffs have identified a fundamental and well-defined public policy of neglect. protecting nursing home residents from abuse and This policy is demonstrated in part by Wis. Stat. § 50.07(1)(e) which prohibits a nursing home from retaliating against an employee who provides information regarding abuse or neglect to a state official, and by Wis. Stat. § 46.90(4)(b) which prohibits an employer from discharging an employee for reporting abuse or neglect of a resident to a county agency. We also find the public policy of protecting nursing home residents to be present criminal in penalties Wis. on Stat. workers § 940.295(3)'s who knowingly imposition permit abuse of or neglect to occur. ¶17 Accordingly, the question then becomes whether the plaintiffs can comport their claim for wrongful termination in violation of employee must public policy violate an with Bushko's express command, request to violate that public policy. 9 dictates that instruction, the or We conclude that the No. 96-0866 narrow public policy exception laid encompass the plaintiffs' claim. out in Bushko does not Despite counsel's attempts at oral argument to cast the facts of this case as something in the nature of an "implicit command" not to report abuse, we remain unpersuaded. While St. Croix's termination of Hausman and Wright might be viewed as an implicit command to other employees not to report abuse or neglect, such an argument does not allow the plaintiffs herein to avail themselves of the existing public There was no command, policy exception as defined by Bushko. request, or instruction. ¶18 We are thus squarely faced with the plaintiffs' request in the alternative that we redefine the public policy exception to the employment-at-will doctrine to include actions for wrongful termination based on activities of a discharged employee. particular whistle-blowing Other jurisdictions have recognized an inclusive whistle-blower exception on the grounds that "[p]ublic policy requires that citizens in a democracy be protected reporting from reprisals infractions of for performing rules, their regulations, civil or duty the of law pertaining to public health, safety, and the general welfare." Palmer v. Brown, 752 P.2d 685 (Kan. 1988); see also Moyer v. Allen Freight Lines, 885 P.2d 391 (Kan. App. 1994); Palmateer v. Int'l Harvester Co., 421 N.E.2d 876 (Ill. 1981). ¶19 blower Admittedly, adoption of such a wide-ranging whistleexception would advance the public interest by encouraging employees in diverse industries to report conduct that threatens the public's health, safety, and welfare. 10 Such a No. 96-0866 wide extension of existing law by this court, however, would be contradictory to our established precedent. ¶20 We have explicitly rejected such wide-ranging application of the public policy exception to scenarios like that in Palmer where the terminated individual was merely engaging in praiseworthy conduct consistent with public policy, not complying with an affirmative legal obligation. 134 Wis. 2d at 145. See Bushko, The focus of our inquiry in the past has been not just on the public interest, but also on the valid interests presented by employers and employees. As we noted in Brockmeyer: We believe that the adoption of a narrowly circumscribed public policy exception properly balances the interests of employees, employers and the public. Employee job security interests are safeguarded against employer actions that undermine fundamental policy preferences. Employers retain sufficient flexibility to make needed personnel decisions . . . . Finally, the public is protected against frivolous lawsuits since courts will be able to screen cases on motions to dismiss for failure to state a claim or for summary judgment if the discharged employee cannot allege a clear expression of public policy. Brockmeyer, 113 Wis. 2d at 574. Thus, we reject application of a broad whistle-blower exception. ¶21 However, while we refuse to adopt a broad whistle- blower exception, our examination of the public policy exception is not complete. not faced The situation presented here is one we have previously. Wisconsin law imposes an affirmative obligation upon the plaintiffs to act to prevent suspected abuse or neglect of nursing home residents. 11 One such appropriate No. 96-0866 action under this legal obligation is to report the abuse or neglect. See failed report to Wis. Stat. their § 940.295(3). concerns, they Had could the be plaintiffs subject to criminal prosecution. ¶22 The plaintiffs' compliance with the specific legal mandate in this instance goes beyond mere "conduct [that] was praiseworthy or [conduct] that the public may derive some benefit from." Brockmeyer, 113 Wis. 2d at 574 (citing Palmateer v. International 1981)). Harvester Co., 421 N.E.2d 876, 883 (Ill. While their actions were not in violation of a Bushko command, their actions were in response to a more significant legal command, one imposed by the legislature to further promote the strong public policy of protecting nursing home residents. ¶23 Moreover, the concerns voiced in Brockmeyer arguing against a broad public policy exception do not lie with respect to conduct such as that engaged in by the plaintiffs. The 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. legislature, not It any is the relief duty for statute wrongful enacted by discharge the attached thereto by this court, that legitimately burdens the employer. In addition, applying the public policy exception to an employee's report of nursing home resident abuse or neglect will not open every termination scrutiny. residents The of decision well-defined nursing homes by public and 12 the an employer policy to court of protecting affirmative obligations No. 96-0866 placed upon nursing home employees are sufficiently certain to allow courts to easily identify covered cases. ¶24 The public is also adequately protected if an employee's compliance with a legal command is protected by the public policy exception. Because wrongful termination actions based on such an affirmative legal obligation would be easily identifiable, courts would be able to continue to screen out frivolous cases on summary judgment while still protecting welldefined public policies. ¶25 Finally, the interests of employees would continue to receive the same level of protection from wrongful termination. By applying presented burden the here, of public policy employees choosing would between exception be equally to relieved the of destructive situation the onerous alternatives: report and be terminated, or fail to report and be prosecuted. Accordingly, protection while to employees facilitate would the gain public an added interest, level the of added safeguard would not extend to "merely praiseworthy conduct." ¶26 For these reasons, we conclude that the public policy exception to the employment-at-will doctrine may apply beyond the four corners of Bushko. The public policy of protecting nursing abuse defined. an home residents from is fundamental and well- Where the law imposes an affirmative obligation upon employee to prevent abuse or neglect of nursing home residents and the employee fulfills that obligation by reporting the abuse, an fulfillment of the employer's termination of employment for legal obligation exposes the employer to a 13 No. 96-0866 wrongful termination action. In such instances, the employee may pursue a wrongful termination suit under the public policy exception regardless of whether the employer has made an initial request, command, or instruction that the reporting obligation be violated.8 ¶27 Having acknowledged that a wrongful discharge claim is actionable here, we turn to consideration of the defendant's claim that a wrongful discharge action should not survive where the legislature has already provided a remedy. we noted enacted that a "we variety are of well aware statutes to that the prohibit In Brockmeyer, legislature certain types has of discharges," and that "[w]here the legislature has created a statutory remedy exclusive." for a wrongful discharge, that remedy is Brockmeyer, 113 Wis. 2d at 576, n.17; see also Yanta v. Montgomery Ward & Co., 66 Wis. 2d 53, 59-60, 224 N.W.2d 389 (1974). ¶28 asserts Pointing to this language in Brockmeyer, the defendant that the plaintiffs' cause of action for wrongful discharge in this case is barred by Wis. Stat. 50.07(2), which punishes employers for the wrongful 8 termination of reporting Because we find the plaintiffs have a claim upon which relief can be granted pursuant to the public policy exception to the employment-at-will doctrine, we do not reach the plaintiffs' claims that a private right of action exists under Wis. Stat. § 50.07. 14 No. 96-0866 employees with up to six months in jail.9 In the defendant's view, the legislature has entrusted the State with the duty of deterring and employee's punishing report of discharges neglect or that abuse, occur so due to individual an civil actions are inappropriate. ¶29 We disagree. A criminal penalty is no remedy to the terminated employee. While the State may choose to prosecute individual for defendants wrongful discharge, thus providing society with a remedy, the terminated employee who fulfilled the statutory obligation and reported suspected abuse remains just that: terminated. Absent application of the wrongful discharge public policy exception, such an individual has no recourse to regain a former termination. position The or criminal receive sanction redress for provision a of wrongful Wis. Stat. § 50.07 is a penalty levied against violating employers, not a remedy for these plaintiffs, and is thus insufficient to bar the plaintiffs' cause of action. ¶30 The plaintiffs' compliance with the legal command in Wis. Stat. § 940.295(3) requiring them to take action to prevent abuse or neglect of nursing home residents comports with the public policy exception to the employment-at-will doctrine. Moreover, absent application of the public policy exception, the plaintiffs are without remedy 9 for wrongful termination. We also find no merit in the defendant's argument that we should withhold relief because a bill that addresses the statutes at issue in this case has been proposed to the legislature. 15 No. 96-0866 Accordingly, the plaintiffs have met the threshold requirement of stating a claim upon which relief can be granted and the circuit court erred in dismissing their claims. By the Court. The decision reversed. 16 of the court of appeals is 1
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