Cathy Strozinsky v. School District of Brown Deer
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2000 WI 97 SUPREME COURT OF WISCONSIN Case No.: 98-0454 Complete Title of Case: Cathy Strozinsky, Plaintiff-Appellant, v. School District of Brown Deer, Defendant-Respondent-Petitioner. REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 228 Wis. 2d 509, 597 N.W.2d 773 (Ct. App. 1999-Unpublished) Opinion Filed: Submitted on Briefs: Oral Argument: Source of APPEAL COURT: COUNTY: JUDGE: July 12, 2000 March 2, 2000 Circuit Milwaukee Christopher R. Foley JUSTICES: Concurred: Dissented: Not Participating: ATTORNEYS: For the defendant-respondent-petitioner, there were briefs by M. Elizabeth O Neill, and Whyte Hirschboeck Dudek, S.C., Milwaukee, and oral argument by M. Elizabeth O Neill. For the plaintiff-appellant, there was a brief by Alan C. Olson, Robert M. Mihelich and Alan C. Olson & Associates, S.C., New Berlin, and oral argument by Alan C. Olson. 2000 WI 97 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 98-0454 STATE OF WISCONSIN : IN SUPREME COURT Cathy Strozinsky, FILED Plaintiff-Appellant, JUL 12, 2000 v. Cornelia G. Clark Clerk of Supreme Court Madison, WI School District of Brown Deer, Defendant-Respondent-Petitioner. REVIEW of a decision of the Court of Appeals. ¶1 DAVID T. PROSSER, J. Affirmed. The School District of Brown Deer (the District) seeks review of an unpublished decision of the court of appeals.1 The court of appeals reversed a decision of the Circuit Court for Milwaukee County, John F. Foley, Judge. The circuit court granted summary judgment to the District, holding that the wrongful discharge claim of Cathy Strozinsky (Strozinsky) was not actionable because Strozinsky did not satisfy the public policy exception to the employment-at-will doctrine. The circuit court, however, urged Strozinsky to proceed on an alternative theory, constructive discharge. 1 Strozinsky v. School Dist. of Brown Deer, No. 98-0454, unpublished slip opinion (Wis. Ct. App. May 18, 1999) (per curiam). No. ¶2 98-0454 Strozinsky resigned from her position as payroll clerk in the District's central office after she and her supervisors disagreed about the tax withholdings from a bonus check. Strozinsky filed a wrongful discharge claim, contending that the District had forced her to resign because of her efforts to comply with the public policy reflected in Wis. Stat. § 943.392 and federal tax laws. ¶3 After the circuit court granted summary judgment to the District, Strozinsky submitted a motion for reconsideration. The circuit court, Christopher R. Foley, motion for the wrongful discharge claim. Judge, denied the The court also found that Strozinsky could not pursue a constructive discharge claim because constructive discharge is not actionable as a distinct cause of action and offers relief only when raised conjunction with an underlying theory of recovery. in The court therefore granted the District's motion to dismiss the case. ¶4 The court of appeals expressly applies address to whether common-law reversed. the The court constructive filed claims discharge the under did not doctrine narrow public policy exception to the rule of employment-at-will established in Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 335 N.W.2d 834 (1983). should The court applied the doctrine, holding that a jury decide Strozinsky's the workplace question were "whether so 2 the intolerable conditions that a at reasonable All references to the Wisconsin Statutes are to the 199394 volumes unless indicated otherwise. 2 No. person would be forced to resign." 98-0454 Strozinsky v. School Dist. of Brown Deer, No. 98-0454, unpublished slip opinion at 8 (Wis. Ct. App. May 18, 1999) (per curiam). The court also found that Strozinsky fact attempts set to intolerable forth comply working questions with the ¶5 whether Internal conditions violation of public policy. of that about Revenue triggered Code her created discharge in Id. We frame two issues in this case. Strozinsky a whether identified a First, we address fundamental and well defined public policy sufficient to meet the narrow cause of action for wrongful general court discharge rule in of under the public employment-at-will Brockmeyer, 113 Wis. 2d policy first 561. exception recognized Second, to by we the this consider whether the constructive discharge doctrine applies to a commonlaw claim for wrongful discharge under the same exception. ¶6 We actionable hold under that the employment-at-will the narrow doctrine wrongful public because discharge policy claim exception Strozinsky to is the identified a fundamental and well defined public policy in the provisions of Wis. Stat. § 943.39(1) and 26 U.S.C. §§ 3101, 3102, and 6672(a). The granting therefore of the District's inappropriate. Our summary approach judgment to this motion first was issue differs from that of the court of appeals because we conclude that whether a plaintiff identifies a public policy question of law to be decided by the court, not a jury. is a For the second issue, we agree with the circuit court inasmuch as the constructive discharge doctrine does not present an independent 3 No. cause of action. We hold, however, that the 98-0454 doctrine of constructive discharge can be applied as a defense in a commonlaw claim under the public policy exception resignations are, in fact, involuntary. because some In this case a question of fact exists under the constructive discharge standard, namely whether Strozinsky's working conditions were so intolerable that a reasonable person in her position would have been compelled to resign. We agree with the court of appeals that this question requires resolution by a jury, and hence, we conclude that the District's granted. motion to dismiss the case should not have been Accordingly, we affirm the decision of the court of appeals and remand the cause to the circuit court for trial for determination constructive whether discharge Strozinsky's and, if resignation so, whether the was a discharge violated public policy. FACTS ¶7 District Strozinsky presented the employed Strozinsky as approximately January 11, 1988, following a until facts.3 payroll September The clerk from 30, 1995. Strozinsky was responsible for bookkeeping and payroll duties, 3 In a review of a summary judgment motion, this court interprets the facts, and all reasonable inferences drawn from those facts, in favor of the nonmoving party. See Grams v. Boss, 97 Wis.2d 332, 338-39, 294 N.W.2d 473 (1980). When reviewing a motion to dismiss, we assume that the facts as set forth in the complaint are true. Hausman v. St. Croix Care Ctr., 214 Wis. 2d 655, 662, 571 N.W.2d 393 (1997); Wandry v. Bull's Eye Credit Union, 129 Wis. 2d 37, 39, 384 N.W.2d 325 (1986). 4 No. 98-0454 and she determined the federal and state tax withholdings for all payroll checks issued to District employees. Among the employees for whom Strozinsky computed withholding tax was the District Superintendent, Kenneth Moe (Moe). directly to the District's Business Strozinsky reported Manager, Donald Amundson (Amundson), an immediate subordinate of Moe. ¶8 Under his employment contract with the District, Moe received an annual bonus equal to 10 percent of his salary. The check was issued directly into a tax-sheltered annuity account that Moe selected. Before 1993, the District had paid the bonus to the annuity account without withholding any Social Security or Medicare taxes from the gross amount. recall whether she or someone else Strozinsky did not prepared those checks; issuance of the bonuses had not always been within her area of responsibility. ¶9 Strozinsky did remember the bonus check paid to Moe in July 1994. No taxes were withheld from that check, and Amundson instructed Strozinsky not to make any adjustments to offset the difference in the two subsequently that month. regular paychecks issued to Moe Strozinsky recalled Amundson telling her "not [to] tax Mr. Moe that high." Although Strozinsky was not comfortable, she prepared the paycheck as Amundson directed and did nothing to verify whether her actions were legal or not. Id. ¶10 Strozinsky described an atmosphere at the District's business office in which the payroll staff was ill at ease with procedures that were not "legally 5 correct." A previous No. 98-0454 bookkeeper, for instance, refused to sign off on federal tax forms she issued because they were not truthful. The bookkeeper feared for she might information. Id. be held personally liable falsified Another employee also refused to sign tax documents, testifying that the materials accompanying Moe's taxsheltered annuity were fraudulent. Strozinsky herself had learned from her membership in the American Payroll Association that she could be held liable for errors in payroll checks. ¶11 The following year, bonus check on July 7, 1995. Strozinsky issued Moe's annual She drew the $9,149 bonus from the District's accounts payable checking account and submitted it to Moe's annuity account. the withholdings, Since issuing the 1994 paycheck without Strozinsky had become more informed about taxation procedures from the American Payroll Association and seminars she attended. She therefore believed tax should be withheld from the bonus check, but she was unable to deduct the amount because the District's computer software was not equipped to execute the withholding from the accounts payable account. Strozinsky therefore made an adjustment to offset the necessary withholding in Moe's next regular payroll check. She did not give Moe any advanced explanation that he would be receiving a reduced net amount on the paycheck. After Strozinsky deducted this additional amount, Moe's payroll check was about $500 less than he expected. ¶12 and that Moe received this reduced paycheck on July 20, 1995, same deductions. day he confronted Strozinsky about the large Strozinsky explained that she "was going to tax it 6 No. 98-0454 properly" and wanted it "done correctly in regards to taxes and with Wisconsin Retirement." She said the tax laws required her to make withholdings from the bonus check, and she therefore had deducted the required amount from the regular paycheck. allegedly told her that he "didn't care" and Moe instructed Strozinsky that he did not want his payroll check to reflect any withholding to compensate for the annual bonus payment. this conversation, Strozinsky "threatening in his demeanor." that Moe threw the check found assertive and She testified at her deposition across demanded that she change it. Moe During the desk at Strozinsky and Strozinsky felt as if she were "being chastised like a child gets yelled at." ¶13 After Internal this Revenue conversation, Service (IRS) Strozinsky for called the The IRS advice. representative confirmed that tax should be withheld from the bonus payment, explaining that the deduction Strozinsky made was withheld properly from Moe's next regular paycheck. testified should that the contact Strozinsky about representative the the IRS suggested directly withholding. rather The that than IRS Strozinsky Moe himself arguing with allegedly told Strozinsky that she personally could be liable for the amount owed as well as a penalty and compounded interest. ¶14 Strozinsky conveyed the information she had received from the IRS to her supervisor, Amundson. she faced penalties personal and liability interest. for any Amundson She explained that unpaid taxes, nonetheless plus directed Strozinsky to re-issue a new payroll check to Moe, this time 7 No. 98-0454 without any tax withholdings deducted, neither for the bonus nor the regular happens payroll once a amount. year, just Amundson do it remarked, and get it prepare the check "This over with only and eventually he will make it up." ¶15 Strozinsky agreed to if Amundson signed a written statement releasing her from liability in the event the IRS challenged the non-reporting. Strozinsky recalled that Amundson told her that he would take full responsibility, and he signed the statement. Strozinsky voided the check with the proper withholdings and prepared a new payroll check that withheld no taxes. ¶16 Moe received the returned it to Strozinsky. replacement check, but Amundson He informed Strozinsky that without any tax withheld, Moe thought the error may look too obvious and explained that Moe wanted her to issue a third check, this time with partial withholdings. When Strozinsky told Amundson that the District computer software prevented her from manipulating the software to change the withholding percentages, told her "to find a way to do it in the system." Amundson Strozinsky made repeated, unsuccessful attempts to issue the check. ¶17 As Strozinsky and Amundson struggled with the computer software, Moe approached Amundson and Strozinsky and conceded that he was required to pay the taxes that Strozinsky originally had withheld. Moe, however, addressed Strozinsky's decision to ask Amundson to sign the statement insulating her from potential liability, stating, "I'm offended by this memo [that you] documented something, and that you [ ] impl[ied] that I'm doing 8 No. something illegal here when I'm not." 98-0454 Moe screamed as his veins bulged and spittle came out of his mouth. Strozinsky stated that Moe leaned over the desk red-faced, pointed to the door, and warned that if Strozinsky engaged in similar behavior in the future, she would be "out of here." Strozinsky attempted to justify her, her conduct; Moe told "It was your responsibilityIt's your responsibility to advise me about tax." During this exchange, Amundson told Strozinsky to be quiet and not say anything else to Moe. July 1995, she and Moe Strozinsky conceded that before had had "a very good working relationship." ¶18 shaken. Amundson, Strozinsky explained She cried, hyperventilated, "I anymore." cannot do this that this and anymore. incident vomited. I cannot left her She told work here Amundson told Strozinsky to calm down and that she should then issue yet another payroll check, this time again with the full amount deducted as an adjustment withholding amount required from the bonus check. for the Strozinsky testified at her deposition that Amundson said, "what happened to [you] was terrible and it shouldn't have happened, but you know that he's not going to apologize to you. never admit he's wrong." ¶19 You know he'll Amundson urged her not to quit. Strozinsky nonetheless feared she would lose her job and decided that "nobody was worth breaking the law for." submitted Human a written Resources complaint Manager, to asserting Karen that Rutt, Moe's the She District's treatment was demeaning, upsetting, and amounted to a "form of harassment." 9 No. 98-0454 She provided a copy of the complaint to Amundson, who inquired, "Are you sure you want to do this? You're talking about the You know what he gets like. superintendent here." Amundson instructed Rutt to take no immediate action on the complaint until after Strozinsky took a pre-planned family vacation scheduled for the following week. ¶20 When Strozinsky returned to work on August 2, 1995, Amundson handed the written complaint back to her, explaining that he would "pretend [he had] never s[een] it." Strozinsky told Amundson that whenever she saw Moe, her "stomach flipp[ed]" and she grew shaky. Amundson wrote this off to "a typical reaction that females have." ¶21 Moe, Amundson, and Strozinsky met the next day. Moe underscored that he and Amundson were Strozinsky's bosses, and that as a "payroll clerk," she had no authority or power. Strozinsky told the men she had tried to fulfill her job duties lawfully, following the advice she had received from the IRS and the information Association. she had Moreover, learned she from explained the that American she had Payroll asked Amundson to sign the written release because she did not trust Moe or Amundson to "back her up" in any dispute with the IRS. Moe replied that he and Amundson were the parties responsible, adding that "if [we] get caught that's why [the District] [has] errors and omissions insurance." Moe stated that if Strozinsky did not trust him, she should not work for him. ¶22 After August 3, Amundson and Moe excluded Strozinsky from job duties in which she regularly participated previously, 10 No. 98-0454 such as work on short-term borrowing projects and attending the orientation designed to introduce and explain payroll benefits to new District teachers. Amundson Strozinsky as he had in the past. ceased working with She sensed that Moe and Amundson stopped communicating with her, reprimanded her without cause, and pressured her with rushed deadlines. Strozinsky felt threatened and believed that Moe was presenting her with "an ultimatum." ¶23 On September 13, 1995, Strozinsky spoke with Amundson about the workplace pressures. Amundson suggested Moe was the source of her unease and remarked "if this is what you think pressure is, you're working for the wrong guy, and perhaps you shouldn't be working here." Later that day, Strozinsky submitted a written resignation stating that she would terminate her employment effective September 29, 1995. PROCEDURAL HISTORY ¶24 After her resignation, Strozinsky filed for unemployment compensation benefits, and the District challenged her application. After a three-day hearing conducted early in 1996, an administrative law judge found "good cause attributable to the employer" as the source of Strozinsky's departure. The tribunal found it irrelevant whether Strozinsky was correct in her interpretation of the payroll tax laws. that the cumulative effect of the The judge reasoned facts suggested that Strozinsky was subjected to unreasonable treatment. ¶25 The District appealed the decision to the Labor and Industry Review Commission (LIRC), and that commission affirmed 11 No. the decision of the administrative law judge. 98-0454 LIRC concluded that Strozinsky "presented testimony that the pressure of the workplace became so severe that she was forced to quit." LIRC reasoned that "requesting, suggesting, or directing an employe to violate Federal or State law is good cause" to quit. ¶26 Milwaukee Strozinsky filed a complaint against the District in County Court on June 12, 1996, alleging wrongful discharge in violation of the public policy mandate articulated in Wis. summary Stat. § 943.39 judgment on the (1993-94).4 grounds The that District Strozinsky moved for failed to present any evidence that the District had violated a public 4 Wisconsin Stat. § 943.39 provides: Fraudulent writings. Whoever, with intent to injure or defraud, does any of the following is guilty of a Class D felony: (1) Being a director, officer, manager, agent or employee of any corporation or limited liability company falsifies any record, account or other document belonging to that corporation or limited liability company by alteration, false entry or omission, or makes, circulates or publishes any written statement regarding the corporation or limited liability company which he or she knows is false. The District argues that, "The public policy exception embodied in this statute is only arguably applicable to the present case because the District is neither a 'corporation' nor a 'limited liability company,' as those terms are defined in the Wisconsin statutes." Petitioner's Brief at 29 n.1. In paragraph 2 of her complaint, Strozinsky alleged that the District "is a corporation organized and existing under the laws of the State of Wisconsin." In its answer, the District admitted to this allegation. 12 No. 98-0454 policy, failed to allege that she refused to violate a public policy, and resigned from her position voluntarily. In addition, the District argued that even if a claim for wrongful discharge could be based on constructive discharge, Strozinsky could not demonstrate intolerable that a that her reasonable working person conditions faced were with so similar circumstances would be compelled to resign. ¶27 On May 21, 1997, the circuit court entered an order granting summary discharge claim. judgment The to court the District found that on the Strozinsky wrongful had not demonstrated that her case satisfied any of the public policy exceptions order, to the however, employment-at-will permitted doctrine. Strozinsky alternative theory, constructive discharge. to The proceed court's on an The court reasoned: It's my view that there is certainly an issue of fact with regard to the constructive discharge. If that hasn't been raised, you ought to do that. Because I really think that what she says is true, conditions were intolerable. It's beyond the administration of the school district acting like that. Who the hell does this guy think he is anyway? I think the issue here is a matter of foregoing the constructive discharge. But the motion for summary judgment is granted. ¶28 Strozinsky filed a motion for reconsideration of the summary judgment order on June 6, 1997, seeking reversal of the court's decision about the wrongful discharge claim. sought clarification about the constructive The motion discharge claim, noting that Wisconsin law recognizes no such cause of action. 13 No. ¶29 The circuit court denied Strozinsky's reconsideration of the wrongful discharge claim. then moved to dismiss constructive discharge. the remaining 98-0454 motion for The District cause of action, The District argued that constructive discharge presents a basis for recovery only when set forth in conjunction with an underlying cause of action. Strozinsky agreed that she would be unable to proceed on a free-standing claim of constructive discharge without the reinstatement of her original cause therefore of action, dismissed the wrongful constructive discharge. discharge The claim court without prejudice. ¶30 Strozinsky appealed. The court of appeals held that summary judgment was inappropriate because Strozinsky presented genuine issues of material fact constructively discharged. doctrine whether of constructive Wisconsin about whether she had been The court of appeals applied the discharge recognizes the opposed to statutory, claims. without doctrine expressly in deciding common-law, as The court concluded that a jury should determine whether Strozinsky's working conditions were so intolerable that a reasonable person in her position would have resigned. In addition, the court reasoned that material facts were in dispute about whether the "discharge" violated public policy. PUBLIC POLICY EXCEPTION ¶31 The identified a sufficient to first issue fundamental meet the in this and well narrow cause 14 case, whether defined of action the public for claim policy wrongful No. 98-0454 discharge under the public policy exception to the doctrine of employment-at-will, presents a question of law that we review independently. Kempfer v. Automated Finishing Inc., 211 Wis. 2d 100, 107-08, 564 N.W.2d 692 (1997). ¶32 the This issue also requires us to review the decision of circuit motion. court to grant the District's summary judgment This court analyzes summary judgment motions de novo, applying the same methodology as the circuit court. Tatge v. Chambers & Owen, 219 Wis. 2d 99, 110, 579 N.W.2d 217 (1998). Summary judgment is appropriate only when there are no genuine facts in dispute and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2). In its review of a summary judgment motion, this court construes the facts and all reasonable inferences in the nonmoving party's favor. Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980). ¶33 We begin by setting forth our established approach to employment relationships. Wisconsin, like many states, adheres to the doctrine of employment-at-will. The doctrine provides that when the terms of employment are indefinite, the "employer may discharge an employee 'for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.'" Tatge, 219 Wis. 2d at 112-13 (quoting Brockmeyer, 113 Wis. 2d at 567). legal claims Generally, at-will employees cannot pursue stemming from routine dissatisfactions with the terms and conditions of employment or an employer's unjustified decision to terminate the employment relationship. 113 Wis. 2d at 574. Brockmeyer, Courts will not second guess employment or 15 No. 98-0454 business decisions, even when those decisions appear ill-advised or unfortunate. This common-law fixture of our law since 1871. ¶34 Over complexion of modifications potentially employees time, the to harsh to seek and common-law rule of application relief for has been a stable Tatge, 219 Wis. 2d at 112. federal the doctrine state laws doctrine. These employment-at-will of the doctrine certain Brockmeyer, 113 Wis. 2d at 567-68. refined types of the statutory targeted by the allowing terminations. For instance, Title VII of the Civil Rights Act of 19645and the Wisconsin Fair Employment Act (WFEA)6prohibit employers from using discriminatory factors such as race, color, religion, sex, or national origin as the basis for unlawful discharging for participation an employers in union employee. to Other terminate activities, statutes workers jury make because service, it of military service, or testifying at an occupational, safety, and health proceeding. ¶35 Id. Although modifications to the doctrine most often are the product of legislative enactments, occasionally courts also adopt exceptions to the rule of employment-at-will.7 In 1983, the Brockmeyer court observed that statutory modifications do not always protect wrongfully discharged employees. 5 42 U.S.C. § 2000(e)-2 (1976). 6 Id. at 568. Wisconsin Stat. §§ 111.31-111.395. 7 See Michael D. Moberly & Carolann E. Doran, The Nose of the Camel: Extending the Public Policy Exception Beyond the Wrongful Discharge Context, 13 Lab. Law. 371, 371-74 (1997). 16 No. 98-0454 Some employees, for instance, lack the safeguards of collective bargaining agreements and civil service regulations. Id. We therefore formulated a narrow exception to the employment-atwill doctrine, recognizing that certain terminations are unjust. Hausman v. St. Croix Care Ctr., 214 Wis. 2d 655, 663, 571 N.W.2d 393 (1997). ¶36 The Brockmeyer court recognized a narrow public policy exception that allows 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." Brockmeyer, 113 Wis. 2d at 572-73.8 This exception properly balances the need to protect from employees terminations that contradict public policy with the employer's historical discretion to discharge employees under the freedom to contract embodied in the at-will doctrine. 396 Bushko v. Miller Brewing Co., 134 Wis. 2d 136, 148, N.W.2d 167 (1986) (Abrahamson, J., concurring). Our acceptance of this public policy exception mirrored the approach taken by sister courts in other states.9 ¶37 Plaintiffs seeking relief under this narrow exception must: (1) first identify a fundamental and well defined public 8 In Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 57576, 335 N.W.2d 834 (1983), we also concluded that causes of action arising from wrongful discharges sound in contract, not tort: "The contract action is essentially predicated on the breach of an implied provision that an employer will not discharge an employee for refusing to perform an act that violates a clear mandate of public policy." 9 See Wandry, 129 Wis. 2d at 40 n.2. 17 No. 98-0454 policy in their complaint sufficient to trigger the exception to the employment-at-will doctrine; and (2) then demonstrate that the discharge violated that fundamental and well defined public policy.10 Winkelman v. Beloit Mem'l Hosp., 168 Wis. 2d 12, 24, 10 The Brockmeyer decision articulated four guidelines that gauge whether a discharge violates public policy: 1. An employer is liable for wrongful discharge if it discharges an employee for refusing to violate a constitutional or statutory provision. Employers will be held liable for those terminations that effectuate an unlawful end. 2. The discharge must clearly contravene the public welfare and gravely violate paramount requirements of public interest. 3. An employer is liable for wrongful discharge if the employer discharges an employee for conduct that is "consistent with a clear and compelling public policy." 4. An employer is not liable for wrongful discharge merely because the employee's conduct precipitating the discharge was praiseworthy or the public derived some benefit from it. Wandry, 129 Wis. 2d Wis. 2d at 573-74). at 42-43 (citing Brockmeyer, 113 Over time, the first of the Brockmeyer guidelines emerged as the key factor in the termination analysis. Current case law requires discharged employees to show that the termination resulted from a refusal to violate public policy as established by existing law. Tatge v. Chambers & Owen, Inc., 219 Wis. 2d 99, 113-14, 579 N.W.2d 217 (1998); Hausman, 214 Wis. 2d at 66465; Kempfer v. Automated Finishing, Inc., 211 Wis. 2d 100, 109, 564 N.W.2d 692 (1997); Bushko v. Miller Brewing Co., 134 Wis. 2d 136, 142, 396 N.W.2d 167 (1986); but see Schultz v. Production Stamping Corp., 148 Wis. 2d 17, 28, 434 N.W.2d 780 (1989) (Abrahamson, J., concurring); Bushko, 134 Wis. 2d at 147-151 (Abrahamson, J., concurring). 18 No. 98-0454 483 N.W.2d 211 (1992); Wandry v. Bull's Eye Credit Union, 129 Wis. 2d 37, 41-42, 384 N.W.2d 325 (1986). satisfies these first two steps, the Once the plaintiff burden shifts to the employer to show that the discharge actually was sparked by just cause. ¶38 Winkelman, 168 Wis. 2d at 24. In the years since deciding Brockmeyer, this court has emphasized that the public policy factors that give rise to an actionable claim under the exception remain very narrow. Tatge, 219 Wis. 2d at 115 (collecting cases). See Public policy considerations invariably are vague and beg judicial caution. Wandry, 129 Wis. 2d at 42 (citing Brockmeyer, 113 Wis. 2d at Because our decision today does not require us to determine whether Strozinsky's discharge violated fundamental and well defined public policy, we do not add to this standing analysis except to note that courts generally find wrongful discharge when an employer terminates an employee for refusing to commit an illegal act. See Brockmeyer, 113 Wis. 2d at 570 n.10 (collecting cases); see also Peterson v. Browning, 832 P.2d 1280, 1281-82 (Utah 1992) (employee terminated for refusing to falsify tax and customs documents); Sterling Drug, Inc. v. Oxford, 743 S.W.2d 380 (Ark. 1988) (collecting cases); Smith v. Brown-Forman Distillers Corp., 196 Cal. App. 3d 503 (Cal. Ct. App. 1987) (employee refused to continue to participate in illegal handling and pricing at liquor store); Bowman v. State Bank of Keysville, 331 S.E.2d 797 (Va. 1985) (employee refused to violate securities and corporation laws); Tameny v. Atlantic Richfield Co., 610 P.2d 1330, 1337 (Cal. 1980) (employee refused to participate in illegal price fixing; court held that "an employer's authority over its employees does not include the right to demand that the employee commit a criminal act to further its interests"); Harless v. First Nat'l Bank in Fairmont, 246 S.E.2d 270 (W. Va. 1978) (employee refused to violate federal and state consumer protection laws); Eric W. Schulze, Constructive Discharge of School Employees, 118 Ed. Law Rep. 805 (1997); Thomas L. Cluff, Jr., Comment, In Defense of a Narrow Public Policy Exception of the Employment at Will Rule, 16 Miss. C. L. Rev. 437, 449-50 (1996). 19 No. 573). 98-0454 We therefore have been careful to require "discharged employees [to] allege a clear expression of public policy." Id. (quoting Brockmeyer, 113 Wis. 2d at 574). ¶39 existing The clear public policy at issue must be "evidenced by law." Brockmeyer, 113 Wis. 2d at 572-73. Under Brockmeyer, we originally limited the applicable "existing law" to constitutional or Subsequently, we administrative rules public policy. statutory observed that evidence Winkelman, provisions. a 168 some, although fundamental Wis. 2d Id. and at 24. at 576. not all, well defined Despite our extension of the public policy exception to some administrative rules, we warned that not every statutory, constitutional, or administrative provision invariably sets forth a clear mandate of public policy. not restrict Kempfer, 211 Wis. 2d at 112. public policy determinations We therefore do "to the literal language" of the provision or the circumstances it describes. Bushko, 134 Wis. 2d at 148 (Abrahamson, J., concurring) (citing Wandry, 129 Wis. 2d at 42). Instead, we look to the content of the particular provision to determine whether it implicates a fundamental and well Wis. 2d at 24. employer invoked defined public policy. Winkelman, 168 Under this approach, we examine whether the the power to discharge to contravene the "spirit as well as the letter" of a constitutional, statutory, or administrative provision. Id. at 21 (citing Wandry, 129 Wis. 2d at 49); see also Hausman, 214 Wis. 2d at 664; Tatge 219 Wis. 2d at 113. 20 No. ¶40 Several cases illustrate how we recognize a provision that articulates a clear mandate of public policy. 214 98-0454 Wis. 2d at 667-68, this court discerned a In Hausman, well defined public policy of protecting nursing home residents and applied the public policy exception to at-will employees discharged after they report abuse or neglect.11 Brockmeyer exception only after concluding who are We modified the that Wis. Stat. § 940.295(3) imposes an affirmative, legal obligation to report Id. at 667. abuse or neglect. The statute also subjects those who do not comply with this obligation to criminal penalties. Id. We recognized that strict adherence to employment-at-will would produce an unjustly harsh result. Without the public policy exception, employees would carry "the onerous burden of choosing between equally destructive alternatives: report and be terminated, or fail to report and be prosecuted." ¶41 Id. at 669. Similarly, in Kempfer, 211 Wis. 2d at 106, this court found that a truck driver who refused his employer's command to operate his vehicle without a valid drivers' license alleged a fundamental provision and that well sets defined forth public the policy. requirements The for statutory operating a commercial vehicle, Wis. Stat. § 343.05(2)(a), obligates drivers to hold a valid license. Id. at 113 n.2. Moreover, Wis. Stat. § 343.245 exposes both the driver and the employer to fines or incarceration for failing to 11 comply with the licensing In Hausman, 214 Wis. 2d at 667, this court explicitly declined to adopt a more sweeping "whistle-blower exception." 21 No. requirements. reflect the Id. at 113-14. fundamental and promoting highway safety. case, the driver Kempfer confronted well we public reasoned, policy of Not unlike the Hausman implicitly equally statutes, defined Id. at 114. decision the These 98-0454 showed destructive that the truck alternatives of termination or statutory penalties. ¶42 In Winkelman, 168 Wis. 2d 12, we held that a discharged nurse identified a well defined public policy, namely protecting patients from negligent nurses, in an administrative rule that prohibits nurses from performing services for which they are not qualified. The Winkelman plaintiff resigned after she declined to obey the employer hospital's instruction that she "float" from her regular duties on the maternity ward to a department for which she lacked training. Id. at 16-18. This court observed that Wis. Admin. Code § N 7.03(1) establishes a policy that only qualified nurses should render services. at 23-25. Id. Moreover, the provision made it negligent for a nurse to "[e]xecut[e] an order which the registrant or licensee knew or should have known would harm or present the likelihood of harm to a patient." Id. at 18 n.2. In effect, Winkelman also illustrated employee the between how the termination for faced refusing to dilemma "float" or of choosing facing civil at 46-47, liability in a negligence claim. ¶43 The Wandry decision, 129 Wis. 2d demonstrated that a discharge can violate the spirit, if not the exact letter, of a statutory provision. Wis. 2d at 144. See also Bushko, 134 A credit union terminated the Wandry employee 22 No. after she refused to reimburse the resulting from a forged check. employer for 98-0454 the losses Wandry, 129 Wis. 2d at 39. As part of her wrongful discharge claim, the employee identified Wis. Stat. § 103.455 (1983-84) as a well defined public policy.12 Id. at 43. Although this court noted that the statute "does not specifically prohibit an employer from seeking reimbursement from an employee for a work-related loss," id. at 44, we reasoned that the provision implicitly aims to prevent employers from invoking their coercive economic powers "to shift the burden of a work related loss from the employer to the employee" Id. at when the loss occurs through no fault of the employee. 45-46. Even though the statute did not threaten the discharged employee with any criminal or civil penalties, we nonetheless concluded that a provision designed to "proscrib[e] economic coercion" evidences a fundamental and well defined public policy within the meaning of the Brockmeyer exception. ¶44 Other cases reveal which terminations do not implicate a fundamental and well defined public policy. of an Id. at 47. employee for failure to sign a The termination nondisclosure and noncompete agreement does not give rise to a cause of action for wrongful discharge under the public policy exception. 219 Wis. 2d at 115-16. provision that Tatge, In Tatge, we reasoned that the statutory addresses noncompete 12 agreements, Wis. Stat. Section "103.445 prohibits an employer from deducting certain work-related losses from an employee's wages without following certain procedures to establish the responsibility for the loss." Wandry, 129 Wis. 2d at 44. 23 No. 98-0454 § 103.465 (1991-92), safeguards employees "from compliance with the terms of an 'unreasonable' restrictive covenant." 116. Id. at The statute cannot convey a clear mandate of public policy because the "reasonableness" from case to case. ¶45 of particular agreements varies Id. at 116-17. In Schultz v. Production Stamping Corp., 148 Wis. 2d 17, 23, 434 N.W.2d 780 (1989), we held that no fundamental and well defined public policy obligates employers to disclose the details of a simplified employment pension plan before requiring at-will employees to join the plan as a condition of employment. We reasoned explicitly that or disclosures. neither implicitly federal require Id. at 25-26. nor state employers to provisions make such On the contrary, a federal statute indicated that employers need not provide the information until after an employee's participation in the pension plan began. Id. at 24. ¶46 In Bushko, 134 Wis. 2d at 138-39, an at-will employee alleged that he was terminated because he behaved in a manner that promoted the public interest, namely, complaining about plant safety, hazardous waste disposal procedures, and record falsification. The Bushko court held that conduct merely consistent with public policy provides no basis for a wrongful discharge cause of action. Id. at 142. claim the plaintiff under the exception, employer required him statutory provision. or her to violate Id. at 142-43. 24 Rather, to sustain a must a show that constitutional the or No. ¶47 that 98-0454 To sum up, then, the case law of this state recognizes constitutional, statutory, and administrative provisions can articulate a fundamental and well defined public policy. Statutes express public rarely terms. policy state the Wandry, can be public 129 policy Wis. 2d implicit, and at underlying this court in Expressions 42. them of looks at the content of the provision to determine whether the spirit, if not the letter, speaks to a clear mandate of public interest. Hausman, 214 Wis. 2d at 664; Bushko, 134 Wis. 2d at 143-44. ¶48 In this case our inquiry therefore focuses on whether Strozinsky has identified a fundamental and well defined public policy in the spirit or the letter of constitutional, statutory, or administrative provisions sufficient to trigger the exception to the employment-at-will doctrine. Consistent with our precedent, this court interprets public policies narrowly. We do not deviate from the general tenets of the employment-at-will doctrine, and we do not apply public policy to diminish employer discretion in terminating at-will employees. ¶49 In her complaint, Strozinsky identified Wis. Stat. § 943.39 as the source of the well defined public policy, and she referred to her refusal to falsify payroll documentation and defraud "taxing authorities" as the reasons why the District 25 No. forced her to terminate her employment.13 the complaint liberally. ¶50 98-0454 This court construes Wandry, 129 Wis. 2d at 47. Wisconsin Stat. § 943.39 provides: Fraudulent writings. Whoever, with intent to injure or defraud, does any of the following is guilty of a Class D felony: (1) Being a director, officer, manager, agent or employee of any corporation or limited liability company falsifies any record, account or other document belonging to that corporation or limited liability company by alteration, false entry or omission, or makes, circulates or publishes any written statement regarding the corporation or limited liability company which he or she knows is false. The District argues that this statute has no force or effect "upon a mere nature." clerical employee" and Petitioner's Brief at 24, 27. is "merely punitive We disagree. in Section 943.39(1) prohibits the employees of corporations and limited liability companies documents. exposes from falsifying records, accounts, and The statute is part of the Criminal Code, and it violators to a criminal penalty. Wisconsin Stat. § 939.50(3)(d) explains that a Class D felony is punishable by a 13 Strozinsky alleged in her complaint that Moe and Amundson ordered her to falsify Moe's "payroll documentation in an attempt to defraud the taxing authorities in violation of sec. 943.39, stats." Furthermore, she contended that she "was forced to terminate her employment . . . as a direct result of her refusal to violate the public policies established by sec. 943.39, stats., her refusal to falsify payroll documentation, and her refusal to defraud the taxing authorities." The complaint stated that the District wrongfully discharged her "in violation of the fundamental and well-defined mandates of public policy found at sec. 943.39, stats., which prohibit fraud through enforcement of criminal sanctions." 26 No. 98-0454 fine not to exceed $10,000, or imprisonment not to exceed five years, or both. ¶51 business The public policy of proscribing false reporting in dealings is fundamental and well defined. Section 943.39(1), both in letter and in spirit, deters fraud by threat of punishment. The statute expressly assigns a criminal penalty for falsifying records. serves the activity. public The Criminal Code itself manifestly interest by seeking to eradicate criminal Under this first step of the analysis, a showing that Strozinsky herself "intend[ed] to injure or defraud," contrary to Wis. Stat. § 943.39(1), is not necessary fundamental and well defined public policy. to identify a It is enough to demonstrate that the statutory provision evidences a fundamental and well defined public policy. ¶52 Strozinsky also identified her refusal to falsify records to federal tax authorities in her complaint. In her brief, affidavits, and submissions of evidence in opposition to the District's motion for summary judgment, Strozinsky explained that Moe and Amundson's instructions exposed her to penalties under the Internal Revenue Code, namely 26 U.S.C. §§ 3101, 3102, and 6672(a) (1994). ¶53 Whether the public policy articulated in federal statutes applies to this state's narrow public policy exception to the employment-at-will impression. State courts doctrine in is other a question jurisdictions of first identify fundamental and well defined public policies in various federal 27 No. laws.14 the 98-0454 Those courts recognize that federal laws often speak to "honest administration of public affairs." Peterson v. Browning, 832 P.2d 1280, 1283 (Utah 1992) (quotation omitted) (public policy exception applied to employee who refused to violate state tax law and federal customs regulations); see also Russ v. Pension Consultants Co., 538 N.E.2d 693 (Ill. App. 1989) (public policy favoring obedience to federal law extended to employee who refused to falsify federal tax records). ¶54 certain Substantial federal public statutory policy interests provisions. can Compliance reside in with tax regulations is fundamental to the operation of local, state, and federal government. Statutes governing taxation are national in scope and "strike at the heart of a citizen's social rights, duties and responsibilities." Russ, 538 N.E.2d at 697 (quoting Palmateer v. International Harvester Co., 421 N.E.2d 876, 878-79 (Ill. 1981)); see also Chism S.W.2d 552, 556 (Tenn. 1988). v. Mid-South Milling Co., 762 Like other states, Wisconsin has an interest in compliance with federal tax laws. Falsification of federal tax records can result in underpayment of state taxes 14 Peterson, 832 P.2d 1280 (employee refused to falsify federal tax and customs documents); Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo. 1992) (public policy exception extended to employee who refused to violate federal statute that applied criminal sanctions for falsification of reports to federal agencies); Sabine Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985) (employee refused to violate federal water pollution laws); Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859 (Mo. Ct. App. 1985); Tameny v. Atlantic Richfield Co., 610 P.2d 1330 (federal price fixing laws); Harless, 246 S.E.2d 270 (state and federal consumer protection laws). 28 No. 98-0454 because the Internal Revenue Code serves as the starting point for computing individuals. state income tax for both corporations and Wis. Stat. §§ 71.26(2) and 71.01(13); Russ, 538 N.E.2d at 697 (citations omitted). Moreover, "[t]he effect on the employee of having to choose between keeping his [or her] job or following the law . . . is the same regardless of the origin of the law." ¶55 Peterson, 832 P.2d at 1283. Section 3101 of the Internal Revenue Code establishes the rate of tax individuals must pay, based on the percentage of wages. Section 3102(a) provides that, "The tax imposed by section 3101 shall be collected by the employer of the taxpayer, by deducting the amount of the tax from the wages as and when paid." Section 3102(b) imposes liability for failure to withhold payroll taxes: Indemnification of employer.Every employer required so to deduct the [social security] tax shall be liable for the payment of such tax, and shall be indemnified against the claims and demands of any person for the amount of any such payment made by such employer. The enforcement provisions of 26 U.S.C. § 6672(a) hold others liable for failure to withhold as well: General rule.Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 or part II or subchapter A or chapter 68 for any offense to which this section is applicable. 29 No. This statute employer, exposes to its the person responsible, penalties. The as District 98-0454 well as contends the that § 6672(a) did not subject Strozinsky to sanctions because she was not a "responsible person" subject to personal liability under the statute: "Strozinsky merely typed the check. She did not sign it; she had no authority to set or change the amount of wages paid to any employee." ¶56 pay the Petitioner's Brief at 27-28. Federal law treats the person with effective power to tax as the "responsible person." States, 711 F.2d 729, 734 (5th Cir. 1983). "responsible person" expansively. Howard v. United Courts read the term O'Callaghan v. United States, 943 F. Supp. 320, 324 (S.D.N.Y. 1996) (citations omitted). An "employee with the power and authority . . . to direct the payment of the taxes is a responsible person within the meaning of section 6672." Feist v. United States, 607 F.2d 954, 960 (Ct. Cl. 1979). ¶57 In the responsible person analysis, the answer often pivots on whether the person had power to make tax payments in light of the enterprise's financial organization and decisionmaking structure. O'Connor v. United States, 956 F.2d 48, 51 (4th Cir. 1992). This is a fact-intensive inquiry; in some instances, employees who perform the clerical functions collecting and paying taxes are not responsible persons. 607 F.2d at 957, 960. of Feist, Nonetheless, responsibility does not turn on one's role as an officer or employer but rather on "knowledge of the tax delinquency and authority over the decision to pay or not to pay the taxes which is at issue." 30 Mueller v. Nixon, 470 No. F.2d 1348, 1350 (6th Cir. 1972). 98-0454 Thus, one can be a responsible person if he or she is in a position within the business to prevent the default from occurring. F.3d 1351, 1362 (7th Cir. 1997) United States v. Kim, 111 (quoting Bowlen v. United States, 956 F.2d 723, 728 (7th Cir. 1992)). ¶58 Furthermore, an individual who is otherwise a responsible person will not avoid liability if he or she only follows a supervisor's instructions. 34. Howard, 711 F.2d at 733- An employee will be liable for the tax even if his or her superior demands noncompliance with contingency for not being terminated. ¶59 Wisconsin, like the "responsible person" broadly. the tax laws as a Id. federal courts, reads the term The person need not be an officer or other key employee because this state's penalty provision, Wis. Stat. employees, § 71.83(1)(b)2, and "other refers responsible expansively person[s]." to officers, Although the legislature has not defined "other responsible person," the Tax Appeals Commission gauges responsibility by examining whether the person had the actual or de facto authority to withhold, account for, or pay the taxes, the duty to pay the taxes, and whether the person intentionally breached that duty. Noard v. DOR, Wis. Tax. Rptr. (CCH) P. 400-401 (W.T.A.C. Dec. 18, 1998). Thus, an office manager who filed tax returns and made some payments could be held personally liable because she was fully apprised of the company's tax problems. Green v. DOR, Wis. Tax Rptr. (CCH) P. 400-378 (W.T.A.C. July 3, 1998). 31 No. ¶60 98-0454 In this case, Strozinsky was more than a mere clerical employee. She was responsible for payroll at its central office. preparing the District's Among her other duties, she computed and made the federal and state tax withholdings for all payroll checks issued to the District's employees. Strozinsky submitted payments to the IRS; she was in a position to prevent any default from occurring. She had knowledge of the tax delinquency and the authority to pay or not pay the withholding tax. At her deposition, Strozinsky testified that she knew the withholding tax was due from Moe's bonus check, and the IRS advised her that she should pay the tax. ¶61 the Based on the advice from the IRS and her membership in American Payroll Association, Strozinsky believed she personally could be held liable for any taxes that she did not withhold properly from Moe's check. Although Superintendent Moe told Strozinsky she was just a payroll clerk without power or authority, he stated that it was her responsibility to handle the taxes and recognized authority provide that to advice. accountants withhold and Strozinsky's and remit expert bookkeepers, taxes, can be witness persons with penalized responsible persons if they fail to withhold payroll tax. expert, citing difficult to "responsible," Howard, persuade 711 F.2d the even if he 729, IRS or she that were suggested a that person functioning it was as The is not under the direction and control of a supervisor. ¶62 6672(a) The District maintains that 26 U.S.C. §§ 3102(b) and merely establish rules 32 and do not evince a broader No. 98-0454 policy for the public good. The District argues that Strozinsky identifies and because, no fundamental unlike the nursing well home defined employee public in policy Hausman, 214 Wis. 2d at 667-68, she was under no statutory, affirmative duty to report the alleged violations committed by Moe and Amundson. The District recognized a requiring misreads narrow the Hausman. public reporting Our policy of decision exception nursing home for abuse in Hausman the statute and neglect. Hausman does not require parties to identify an affirmative duty within a public policy; on the contrary, Hausman rejected a generalized "whistle-blower" exception. at 667. expressly 214 Wis. 2d As Brockmeyer and its progeny illustrate, fundamental and well defined public policies can reside in constitutional, statutory, and administrative provisions that express no affirmative duties. ¶63 Applying a narrow exception to the employment-at-will doctrine, we hold that Strozinsky has identified a fundamental and well defined public policy. The spirit and the letter of the tax laws are designed to ensure that parties file accurate tax information. ¶64 To date, this court has not departed from a narrow interpretation of the public policy exception to the employmentat-will approach doctrine, today. and This employment litigation. intended the we do not conclusion deviate opens from no this accepted Pandora's Box for We do not believe that the legislature employment-at-will doctrine to cloak the fundamental and well defined public policies evinced in criminal 33 No. statutes or in the federal income tax laws. 98-0454 Moreover, we cannot presume that the legislature intended to condone the Hobson's choice of criminal choosing between sanctions. adequately In identified a being fired holding that fundamental or being exposed Strozinsky's and well to complaint defined public policy, this court preserves both the letter and the spirit of the statute and the federal tax code. legislative goal of balancing the We thereby maintain the public interest and the private interests of employers and employees.15 CONSTRUCTIVE DISCHARGE ¶65 Having fundamental and concluded well employment-at-will defined policy we proceed exception to Strozinsky public doctrine, Strozinsky's claim can public that policy next under the the identified exception consider second to the whether step employment-at-will a of the doctrine. Usually, this second step requires a plaintiff to demonstrate that the termination violated a fundamental public policy. presents a question of fact for the jury. at 114. That question, however, is Kempfer, 211 Wis. 2d not Rather, this case presents a threshold issue. exception to "discharge." the employment-at-will This before the court. The public policy doctrine Brockmeyer, 113 Wis. 2d at 573. requires a Therefore, we must decide whether a cause arising from a resignation can be 15 See Cluff, In Exception, at 449-50. Defense 34 of a Narrow Public Policy No. 98-0454 actionable as a wrongful discharge within the context of that narrow exception. ¶66 The District contends that a constructive discharge claim is not actionable because Strozinsky resigned voluntarily. Although Strozinsky conceded to the circuit court that constructive discharge does not constitute a distinct cause of action, she discharge arising now asks doctrine to under the this the narrow court to apply element of "discharge" public policy the constructive in a exception to claim the employment-at-will rule. ¶67 of the claim. Hausman, This second issue requires us to review the decision circuit court to dismiss the constructive discharge This court reviews the dismissal of claims de novo. 214 Wis. 2d at 662. We construe the liberally and accept the facts presented as true. this methodology, this court will uphold the complaint Id. dismissal Under of a claim "only if it is 'quite clear that under no conditions can the plaintiff recover.'" Id. at 663 (quotation omitted). Whether a claim is actionable also is a question of law that we review de novo. Tatge, 219 Wis. 2d at 105. Because this is an issue of first impression,16 we turn to the persuasive authority from other jurisdictions in the course of this analysis. 16 In Winkelman v. Beloit Memorial Hospital, 168 Wis. 2d 12, 18, 27, 483 N.W.2d 211 (1992), the employer hospital contended no discharge occurred because the nurse resigned. The jury found that the nurse's termination was not voluntary. The hospital did not challenge the jury's finding on appeal, and we therefore did not address it in our review of the case. 35 No. ¶68 98-0454 The doctrine of constructive discharge recognizes that some resignations are coerced, tantamount to a termination.17 Usually, employers do not "discharge" employees who resign: employee can leave an at-will position at any timefor An any reason or no reason at alljust as an employer can terminate an at-will employee at its discretion. An employee who departs from the workplace generally cannot pursue a claim against the employer for wrongful discharge. Nonetheless, many courts reason that employers should not escape liability simply because the employer forced a resignation:18 Actual discharge carries significant legal consequences for employers, including possible liability for wrongful discharge. In an attempt to avoid liability, an employer may refrain from actually firing an employee, preferring instead to engage in conduct causing him or her to quit. The doctrine of constructive discharge addresses such employerattempted "end runs" around wrongful discharge and other claims requiring employer-initiated terminations of employment. Balmer v. Hawkeye Steel, 604 N.W.2d 639, 641 (Iowa 2000) (quoting Turner v. Anheuser-Busch, Inc., 876 P.2d 1022, 1025 17 Lex K. Larson, Unjust Dismissal, § 6.06[2] (1999) (quoting Smith v. Brown-Forman Distillers Corp., 241 Cal. Rptr. 916, 920 (1987)); William J. Holloway & Michael J. Leech, Employment Termination Rights and Remedies 142 (1993). See generally Schulze, Constructive Discharge of School Employees, 118 Ed. Law Rep. 805. 18 Larson, Unjust Dismissal, § 6.06[2]. Stated otherwise, "[t]his approach invites employers to engage in subterfuge as a means of evading the law prohibiting retaliatory discharge." William J. Holloway & Michael J. Leech, Employment Termination Rights and Remedies at 142. 36 No. 98-0454 (Cal. 1994), criticized on other grounds, Romano v. Rockwell Int'l, Inc., 926 P.2d 1114 (Cal. 1996)). Constructive discharge exposes "what is ostensibly a resignation [as] a discharge." Turner, 876 P.2d at 1030. The doctrine operates "to discard form for substance, to reject sham for reality" and recognizes that certain resignations are, in fact, actual firings. Beye v. Bureau of Nat'l Affairs, 477 A.2d 1197, 1201 (Md. Ct. Spec. App. 1984); see generally Marten Transport Ltd. v. DIHLR, 176 Wis. 2d 1012, 1021-1025 (1993). ¶69 We agree with the decision of the circuit court that constructive discharge is not a generic, free-flowing cause of action. Other jurisdictions recognize discharge is not actionable by itself. 1030. that constructive Turner, 876 P.2d at Rather, the doctrine is ancillary to an underlying claim in which an express discharge otherwise would be actionable.19 Balmer, 604 N.W.2d at 643; Slack v. Kanawha County Redev. Auth., 423 S.E.2d 547, 555 (W. Va. 1992). Hous. & Constructive discharge joins the actionable claim and operates as a defense against an voluntarily.20 employer's An contention employee who that the relies on employee a quit constructive 19 In Tennyson v. School Dist. of Menomonie Area, 232 Wis. 2d 267, 606 N.W.2d 594 (Ct. App. 1999), for instance, the court of appeals analyzed constructive discharge in the context of a breach of contract claim. 20 Balmer v. Hawkeye Steel, 604 N.W.2d 639, 643 (Ia. 2000); Jacobson v. Parda Fed. Credit Union, 577 N.W.2d 881, 882 (Mich. 1998); Turner v. Anheuser-Busch, Inc., 32 Cal. Rptr. 2d 223, 231, 876 P.2d 1022, 1030 (Cal. 1994); Vagts v. Perry Drug Stores, Inc., 516 N.W.2d 102, 104 (Mich. App. 1994); Seery v. Yale-New Haven Hosp., 554 A.2d 757, 761 (Conn. 1989). 37 No. 98-0454 discharge defense in a public policy exception case still must identify a fundamental and well defined public policy and then prove that the discharge, violated that policy. whether constructive or express, See Seery v. Yale-New Haven Hosp., 554 A.2d 757, 761 (Conn. 1989). We therefore must determine whether the doctrine of constructive discharge can attach to a commonlaw claim based on the narrow public policy exception to the general rule of employment-at-will. ¶70 The concept of constructive discharge first arose in federal statutory P.2d at 1026. United some employers but Supreme exerted organizations. employee, under the National Labor In Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984), States discriminates brought See Balmer, 604 N.W.2d at 641-42; Turner, 876 Relations Act. the claims also addressed against The "not Court Court only workers observed when . . . it when it the discrimination engaged that directly purposefully in an labor employer dismisses creates an working conditions so intolerable that the employee has no option but to resigna Federal so-called courts 'constructive allowed the discharge.'" constructive Id. discharge at 894. defense in discrimination actions launched under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and the Americans with Disabilities Act of 1990. See Marten, 176 Wis. 2d at 1021 (citing Brooms v. Regal Tube Co., 881 F.2d 412 (7th Cir. 1989), rev'd in part on other grounds, Saxton v. American Tel. & Tel. 38 Co., 10 F.3d 526 (7th Cir. No. 98-0454 1993)); Turner, 876 P.2d at 1026; Miranda v. Wisconsin Power & Light Co., 91 F.3d 1011 (7th Cir. 1996). ¶71 now Outside the context of statutory claims, many courts permit action the based public policy defense of Stated recognize that to causes employment doctrine and in other common-law claims.21 jurisdictions exception in at-will these the discharge the otherwise, on constructive the concept of "constructive wrongful discharges" can arise in these claims. See e.g., Turner, 876 P.2d at 1030-31. 21 Balmer, 604 N.W.2d at 642 (citing Reihmann v. Foerstner, 375 N.W.2d 677, 683-84 (Iowa 1995)); Collier v. Insignia Fin. Group, 981 P.2d 321, 323 (Ok. 1999) (citing Burk v. K-Mart Corp., 770 P.2d 24 (Ok. 1989); GTE Products Corp. v. Stewart, 653 N.E.2d 161, 168-70 (Mass. 1995); Turner v. Anheuser-Busch, Inc., 32 Cal. Rptr. 2d 223, 876 P.2d 1022 (Cal. 1994); Dalby v. Sisters of Providence in Oregon, 865 P.2d 391, 394-95 (Or. Ct. App. 1993); Slack v. Kanawha County Hous. & Redev. Auth., 423 S.E.2d 547, 558 (W. Va. 1992); Sterling Drug, 743 S.W.2d 380; Morris v. Hartford Courant Co., 513 A.2d 66 (Conn. 1986); Beye v. Bureau of Nat'l Affairs, 477 A.2d 1197, 1202-03 (Md. Ct. Spec. App. 1984); Hunter v. Port Auth., 419 A.2d 631 (Pa. Super. Ct. 1980). But see Bell v. Dynamite Foods, 969 S.W.2d 847, 85152 (Mo. Ct. App. 1998) (declining to address applicability of public policy exception to the employment at will doctrine after finding no discharge, actual or constructive); Stroud v. VBFSB Holding Corp., 917 S.W.2d 75, 80-81 (Tex. App. 1996) (not reaching plaintiff's wrongful termination cause of action, although based on the public policy exception and alleging constructive discharge, because statute of limitations barred the claim); Hinthorn v. Roland's of Bloomington, 519 N.E.2d 909 (Ill. 1988) (expressly declining to rule on the viability of the constructive discharge theory because plaintiff alleged that she was actually, not constructively, discharged); Grey v. First Nat'l Bank, 523 N.E.2d 1138 (Ill. App. Ct. 1988) (finding no actionable constructive discharge in a retaliatory discharge tort claimnot a claim under the public policy exception to the employment-at-will doctrineand reasoning that the facts did not indicate employee was told to resign). See generally Larson, Unjust Dismissal, § 6.06[2]. 39 No. ¶72 Although this court has not considered 98-0454 constructive discharge under the public policy exception to the employmentat-will doctrine, we have allowed parties to raise constructive discharge in termination service statute. Comm'n, 88 proceedings Watkins Wis. 2d 411, v. brought Milwaukee 276 N.W.2d under civil Civil Serv. County our 775 (1979); see also Patterson v. Board of Regents of the Univ. of Wis. System, 119 Wis. 2d 570, 587, 350 N.W.2d 612 (1984). This court recognized over 20 years ago that, "Resignation obtained by coercion poses serious possibilities of abuse. 'A separation by reason of a coerced resignation is, in substance, a discharge.'" Watkins, 88 Wis. 2d at 420 (citations omitted); see also Patterson, 119 Wis. 2d at 587; Patterson v. Portch, 853 F.2d 1399, 1406 (7th Cir. 1988). Ultimately, whether a resignation was voluntary is a question of fact reserved for the fact-finder. See Watkins, 88 Wis. 2d at 421. ¶73 Subsequently, constructive this discharge can court play a acknowledged role in that statutory discrimination claims, and we analyzed the doctrine alongside the WFEA, Wisconsin's counterpart to Title VII. Wis. 2d at 1021-25. who voluntarily Marten, 176 The rule in Wisconsin is "that an employee quits a position must show a constructive discharge to recover back pay and reinstatement under the WFEA." Id. at 1025. doctrine and This approach implies a narrow application of the treats constructive defense in other claims. 40 discharge exclusively as a No. ¶74 98-0454 Although Marten addressed constructive discharge, that case did not present the forum in which to address what an employee must prove to show discharge.22 constructive Other jurisdictions have adopted tests that echo the language of the United States Supreme Court in Sure-Tan, 467 U.S. at 894: Federal courts agree that the trier of fact must be satisfied that "the employer made the working conditions so intolerable as to force a reasonable employee to leave." Miranda v. Wisconsin Power & Light Co., 91 F.3d at 1017; Alicea Rosado v. Garcia Santiago, 562 F.2d 114, 119 (1st Cir. 1977). This standard requires the employee to show that the employer knew or should have known about the intolerable conditions but permitted them to persist without (collecting cases). potential employer for implements to prove Turner, 876 P.2d at 1027-28 The requirement of knowledge minimizes the uncontrolled launches a lawsuit. obligated remedy. litigation corrective measures Id. at 1028. that the ensuring before the that an employee The employee, however, is not employer 22 by intended to force a In Marten Transport Ltd. v. DILHR, 176 Wis. 2d 1012, 501 N.W.2d 391, 394 n.5 (1993), we declined to "define the test for determining whether an employer has constructively discharged an employee" because we accepted the finding in that case that the plaintiff quit voluntarily without being actually or constructively discharged. Recently, the court of appeals explored the theory of constructive discharge in the context of breach of contract. See Tennyson, 232 Wis. 2d 267. The Tennyson court applied the test from other jurisdictions, finding that the "law of constructive discharge [ ] recognizes that an employer may make working conditions so intolerable that an employee may reasonably feel compelled to resign." Id. at 281. 41 No. resignation. Farrell, 98-0454 Id.; see generally Ralph H. Baxter, Jr. & John M. Constructive DischargeWhen Quitting Means Getting Fired, 7 Empl. Rel. L. J. 346, 348-52 (1981). ¶75 to turn This court already has decided that it is appropriate to federal case constructive discharge. law when analyzing the theory Marten, 176 Wis. 2d at 1020. of Other state courts have done the same and uniformly apply the standard set forth in jurisdictions discharge decisions.23 federal and defense, decide the that employee to must We raise join the establish the other constructive conditions intolerable that he or she felt compelled to resign. so If the plaintiff cannot show that conditions so intolerable, the claim does not proceed. ¶76 level Slack, 423 S.E.2d at 556 (citations omitted). We therefore must discern what conditions rise to this of implicates intolerability. an objective A constructive inquiry, discharge recognizing that cannot be overly sensitive to a working environment. analysis employees Brooms, 881 F.2d at 423 (citing Johnson v. Bunny Bread Co., 646 F.2d 23 "There appears to be no disagreement [in the cases] that one of the essential elements of any constructive discharge claim is that the adverse working conditions must be so intolerable that any reasonable employee would resign rather than endure such conditions." Turner, 876 P.2d at 1027 (quoting Slack, 423 S.E.2d at 556). See also Balmer, 604 N.W.2d at 642; Bell, 969 S.W.2d at 851; GTE Products, 653 N.E.2d at 168-69; Sterling Drug, 743 S.W.2d at 385 (following Brockmeyer, 113 Wis. 2d 561, for its adoption of the public policy exception and then recognizing constructive discharge in a claim brought under the exception); Seery, 554 A.2d at 761; Beye, 477 A.2d at 120102 (collecting cases); see Larson, Unjust Dismissal at § 6.06[2]; see also Tennyson, 232 Wis. 2d at 281 (citing Turner, 876 P.2d at 1025). 42 No. 1250, 1256 (8th Cir. 1981)).24 98-0454 The question hinges on whether a reasonable person in the position of the plaintiff would feel forced to quit. Rutan v. Republican Party of Illinois, 868 F.2d 943, 950 (7th Cir. 1989) (en banc), rev'd on other grounds, 497 U.S. 62 (1990). Stressful "disappointments, and possibly some injustices" are not actionable. Id. Similarly, employees will not prevail in claims charging only that managers were heavyhanded, critical, or unpleasant. Phaup v. Pepsi-Cola Gen. Bottlers, 761 F. Supp. 555, 571 (N.D. Ill. 1991); Stetson v. NYNEX Serv. Co., 995 F.2d 355, 360 (2d Cir. 1993). Inferior work assignments, transfers to less favorable job duties, and substandard performance reviews alone generally do not create intolerable conditions. Id.; Marten, 176 Wis. 2d at 1022 (citing Alicea Rosado, 562 F.2d 114); Large v. Acme Eng'g & Mfg. Corp., 790 P.2d 1086, 1089 (Ok. 1990). Rather, the situation must be unusually aggravating and surpass "[s]ingle, trivial, or isolated" incidents of misconduct. Turner, 876 P.2d at 1027 (quotation omitted). ¶77 Criminal conditions. The activity mere sometimes presence of leads illegal to intolerable conduct workplace does not render the environment intolerable. 1032. Intolerable conditions can arise, however, at the Id. at when the employer requests or requires an employee to engage in illegal 24 See also Collier v. Insignia Fin. Group, 981 P.2d 321, 324 (Ok. 1999); GTE Prods., 653 N.E.2d at 168-70; Turner, 876 P.2d at 1027; Slack, 423 S.E.2d at 556; Beye, 477 A.2d at 1202 (collecting cases). 43 No. acts. Smith v. Brown-Forman Distillers Corp., 241 Cal. Rptr. 916 (1987); Turner, 876 P.2d at 1032. that 98-0454 an employee participate in an In particular, requests unlawful enterprise, or repeated instances of illegality, may compel a reasonable person to resign. Turner, 876 P.2d at 1032. For instance, a constructive discharge defense is viable if an employee, who repeatedly violated federal employer's instruction, and state subsequently liquor refuses laws to at the participate Smith, 241 Cal. Rptr. 916; further in the crimes and resigns. see also Jacobs v. Universal Development Corp., 62 Cal. Rptr. 2d 446, 451 (Ca. Ct. App. 1997). In this reasonability calculus, trial courts turn to the totality of the circumstances, taking into account the frequency of the conduct, its severity, and the remoteness of resignation. Group, 981 Stewart, the illegal acts from the actual date of Turner, 876 P.2d at 1032; Collier v. Insignia Fin. P.2d 653 321, N.E.2d 324 161, (Ok. 1999); 168-70 GTE (Mass. Prods. 1995). Corp. Thus, v. a resignation tendered five years after the illegality transpired is too remote to be actionable. ¶78 Turner, 876 P.2d at 1032. Constructive discharge ultimately presents a question of fact for the jury.25 Strozinsky's departure may have been a termination, not a resignation. A jury could conclude that a reasonable person in the position of Strozinsky would be forced 25 Miranda v. Wisconsin Power & Light Co., 91 F.3d 1011, 1017-18 (7th Cir. 1996); see also Watkins v. Milwaukee County Civil Serv., 88 Wis. 2d 411, 421, 276 N.W.2d 775 (1979) (noting that coerced resignation is a question of fact); Sterling Drug, 743 S.W.2d at 386. 44 No. to resign because of intolerable conditions. 98-0454 We therefore find that it is not "quite clear that under no conditions can the plaintiff recover." Hausman, 214 Wis. 2d at 663 (quotation omitted). ¶79 There are facts indicating Strozinsky may have been forced to resign because of intolerable conditions. Amundson suggested Strozinsky might lose her job. that she would be "out of here" and Amundson Moe and Moe warned observed "perhaps [Strozinsky] shouldn't be working here." that Strozinsky summed up her reasons for leaving: I had been excluded and not talked to since I got back from my vacation. I had been told by Mr. Moe that if I didn't trust him I shouldn't work for them. And Mr. Amundson was telling me I was working for the wrong guy and suggested, perhaps, I work someplace else. And I was also threatened by Mr. Moe that I'd be out of there the next time I would do anything that would upset him. So, yes, I guess I did agree, and I didn't feel I had a choice. ¶80 Strozinsky presented testimony that Moe verbally abused her after she made the tax withholding from his regular paycheck. and She explained that he appeared hostile, threatening, verbally abusive. She confrontation with Moe. with Moe diminished her. and and became physically sick after the Following the August 3, 1995, meeting Amundson, Amundson Strozinsky's and others work ceased responsibilities communicating with She contacted the IRS to confirm that the shortcomings in Moe's tax withholdings did not comply with federal law. She had learned from the IRS and American Payroll Association that she personally could be held liable 45 for breaking tax laws. No. Strozinsky did not wait five years before 98-0454 departing; she resigned on September 13, 1995, approximately seven weeks after the July 20 incident. ¶81 A jury also could find that the District knew, or should have known, about Strozinsky's work conditions and failed to implement remedies. When Strozinsky submitted a written complaint to the human resources department, Amundson held it back and later stated that he would pretend he never saw it. ¶82 Taken together, the cumulative effect of these circumstances present a factual question about the nature of Strozinsky's discharge. determine whether We therefore hold that a jury should Strozinsky's resignation was voluntary or whether it constituted a constructive discharge. ¶83 This holding recognizes that employers cannot escape liability by coercing a resignation instead of formally uttering the words "you're fired." action because the Were we to prohibit this cause of employer forced a resignation instead of expressly discharging the employee, we would elevate form over substance and progeny. eviscerate the essence of Brockmeyer and its Nonetheless, we emphasize that a plaintiff's burden to prove constructive discharge is stringent. The plaintiff must prevail establishing under conditions were an so objective standard, intolerable that a reasonable that person confronted with same circumstances would have been compelled to resign. aggravating The and level of surpass intolerability isolated injustice, or disappointment. 46 must incidents be of unusually misconduct, No. ¶84 narrow 98-0454 We caution that today's rule in no way broadens the public doctrine. policy Our exception decision does to not the employment-at-will permit as expansive an application of the constructive discharge doctrine as allowed by some federal courts for statutory claims.26 declines to sanction a generic, discharge cause of action. raise an causes ancillary of action employment-at-will the doctrine voluntary resignation. free-flowing constructive All we hold is that plaintiffs can constructive under This court expressly discharge public in defense policy which in those exception employer the to the alleges An employee who invokes the constructive discharge defense still must identify a fundamental and well defined public policy and then must prove that the discharge violated that policy. ¶85 the We do not, and need not, address the second step of analysis under the public policy exception to the employment-at-will doctrine, namely whether Strozinsky sustained her burden to prove that, if there was a discharge, the discharge violated fundamental and well defined public policy. Like the threshold issue that 26 asks if the resignation Downey v Southern Natural Gas Co., 649 F.2d 302 (5th Cir. 1981) ("[e]ssentially, the test is whether a reasonable person in the employee's position would have felt compelled to resign. [The employee] asserts that his superior specifically advised him that he might be discharged, with a consequent loss of benefits. . . . A reasonable person might well feel compelled to resign in the face of such a statement."); see also Slack, 423 S.E.2d at 558; Christensen v. Equitable Life Assurance Soc'y of the U.S., 767 F.2d 340, 343 (7th Cir. 1985). 47 No. 98-0454 constituted a legal termination, resolution of this second step requires an answer from a fact-finder, not an appellate court. CONCLUSION ¶86 should We conclude that the decision of the circuit court be reversed for two reasons. First, Strozinsky identified a fundamental and well defined public policy in her complaint, and therefore the District summary judgment as a matter of law. was not entitled to Second, dismissal of the complaint is inappropriate in this case because the doctrine of constructive discharge in certain circumstances can satisfy the element of "wrongful discharge" in claims arising under the public policy exception to the employment-at-will doctrine. ¶87 Accordingly, the decision of the court of appeals is affirmed, and the matter is remanded to the circuit court for trial for a determination whether Strozinsky's resignation constituted a constructive discharge, and if so, whether the discharge violated fundamental and well defined public policy. By the Court. The decision affirmed. 48 of the court of appeals is No. 1 98-0454
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