LARRY J. TAYLOR, Complainant
ST MICHAEL HOSPITAL, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusions in that decision as its own, except that it makes the following modifications:
Paragraphs 2, 3 and 4 of the CONCLUSIONS OF LAW are deleted and the following paragraphs are substituted therefor :
"2. The doctrine of claim preclusion does not bar Taylor's WFEA claim that the respondent terminated his employment in retaliation for `having filed a discrimination complaint.' "
3. By virtue of the March 14, 2000 adverse federal court decision Taylor received on his federal discrimination claim, however, the doctrine of issue preclusion forecloses him from relitigating his WFEA claim that the respondent terminated his employment in retaliation for `having filed a discrimination complaint.' " Based on the findings of fact made by the federal court, there is no probable cause to believe that the respondent violated the WFEA by terminating Taylor's employment in retaliation for `having filed a discrimination complaint.' "
4. The doctrine of claim preclusion does not bar Taylor's WFEA claim that the respondent terminated his employment because of his arrest record.
5. By virtue of the March 14, 2000 adverse federal court decision Taylor received on his federal discrimination claim, however, the doctrine of issue preclusion forecloses him from relitigating his WFEA claim that the respondent terminated his employment because of his arrest record. Based on the findings of fact made by the federal court, there is no probable cause to believe that the respondent violated the WFEA by terminating Taylor's employment because of his arrest record."
The decision of the administrative law judge (copy attached), as modified, is affirmed.
Dated and mailed May 31, 2001
taylola . rmd : 125 : 9
/s/ David B. Falstad, Chairman
/s/ James A. Rutkowski, Commissioner
Complainant Larry J. Taylor filed a complaint with the Equal Rights Division alleging that the respondent violated the Fair Employment Act by terminating his employment in retaliation for "having filed a discrimination complaint" against the respondent, and by terminating his employment because of his arrest record. An initial determination was issued finding no probable cause to believe that the respondent had violated the Act as alleged. Taylor appealed this determination and the matter was scheduled for a hearing on the issue of probable cause. Prior to the hearing, the respondent notified the ALJ that Taylor had also commenced a federal action asserting discrimination and retaliation claims arising out of the termination of his employment with the respondent, and that the court had granted the respondent's motion for summary judgment in the federal action. The respondent asserted that Taylor should therefore be barred from further proceedings in this forum under the doctrines of claim and/or issue preclusion. After considering the parties' oral arguments on this question at the scheduled hearing, and the subsequent written arguments they submitted, the ALJ issued a decision dismissing Taylor's complaint.
The ALJ determined that based upon the adverse federal court decision, the doctrine of claim preclusion required the dismissal of Taylor's retaliation claim but not his claim of arrest record discrimination. The ALJ determined that the doctrine of issue preclusion, however, required the dismissal of his arrest record discrimination claim.
Under the doctrine of claim preclusion, a final judgment is conclusive in all subsequent actions between the same parties as to all matters which were litigated or which might have been litigated in the former proceedings. DePratt v. West Bend Mut. Ins. Co., 113 Wis. 2d 306, 310, 334 N.W.2d 883 (1983). The purpose of the doctrine is to prevent repetitive litigation. Fairness to the defendant and sound judicial administration require that at some point litigation over the particular controversy must come to an end. Id . at 311. In order for an earlier action to act as a claim preclusive bar to a subsequent action the following factors must be present: (1) an identity between the parties or their privies in the prior and present suits; (2) an identity between the causes of action in the two suits; and (3) a final judgment on the merits in a court of competent jurisdiction. Northern States Power Co. v. Bugher, 189 Wis. 2d 541, 551, 525 N.W.2d 723 (1995).
Issue preclusion, on the other hand, refers to the effect of a judgment in foreclosing relitigation in a subsequent action of an issue of law or fact that has been actually litigated and decided in a prior action. Id. at 550. A "fundamental fairness" standard exists when applying issue preclusion and requires consideration of the following factors: "(1) could the party against whom preclusion is sought, as a matter of law, have obtained review of the judgment; (2) is the question one of law that involves two distinct claims or intervening contextual shifts in the law; (3) do significant differences in the quality or extensiveness of proceedings between the two courts warrant relitigation of the issue; (4) have the burdens of persuasion shifted such that the party seeking preclusion had a lower burden of persuasion in the first trial than in the second; or (5) are matters of public policy and individual circumstances involved that would render the application of collateral estoppel [issue preclusion] to be fundamentally unfair, including inadequate opportunity or incentive to obtain a full and fair adjudication in the initial action?" Michelle T. v. Crozier, 173 Wis. 2d 681, 689, 495 N.W.2d 327 (1993). Under the doctrine of issue preclusion, the prior judgment precludes relitigation of issues actually litigated and determined by the prior suit, regardless of whether it was based on the same cause of action as the second suit. Id. at fn. 13, p. 694.
Noting that in Bachand v. Connecticut Gen. Life Ins. Co., 101 Wis. 2d 617, 305 N.W.2d 149 (Ct. App. 1981), the court held that the filing of an employment discrimination complaint under the Wisconsin Fair Employment Act with the Equal Rights Division was the exclusive remedy to enforce the anti-discrimination provisions of the Fair Employment Act, and that Taylor thus could not have asserted his arrest record claim in state or federal court, the ALJ determined that the doctrine of claim preclusion could not be applied to his arrest record discrimination claim under the Fair Employment Act.
Although the respondent has not specifically petitioned for a review of this ruling by the commission, it continues to argue that claim preclusion does bar Taylor's arrest record discrimination claim. The respondent cites a number of prior court and commission decisions, including Schaeffer v. State Personnel Commission, 150 Wis. 2d 132, 441 N.W.2d 292 (1989); Bourque v. Wausau Hospital Center (LIRC, 4/2/92), aff'd Bourque v. LIRC, (Marathon Co. Cir. Ct., 9/8/93); Local 322 Allied Industrial Workers of America, (LIRC, 3/30/92) and Haynes v. Pressed Steel Tank Company (LIRC, 5/23/89), in support of its position that the doctrine of claim preclusion barred litigation of Taylor's arrest record claim.
The commission agrees with the ALJ's determination that Taylor's WFEA arrest record discrimination claim is not barred by the doctrine of claim preclusion because the Equal Rights Division is the exclusive remedy to enforce the anti- discrimination provisions of the Fair Employment Act. Admittedly, whether the Equal Rights Division has exclusive authority over claims under the WFEA, and thus whether a complainant could have asserted those claims in a federal court action, has not always been clear. Recently, however, the courts seem to have decided that the Equal Rights Division does have exclusive authority over WFEA claims, and therefore a WFEA claim could not be brought in a federal court action. See Staats v. County of Sawyer, 220 F.3d 511, 516 (7th Cir. 2000) (The Equal Rights Division was the exclusive forum in which plaintiff could bring his WFEA claims; the WFEA does not create a private right of action, citing Bourque v. Wausau Hosp. Ctr., 145 Wis. 2d 589, 427 N.W.2d 433 (Ct. App. 1988) and Bachand. See also, Waid v. Merrill Area Public Schools, 91 F.3d 857, 865-866 (7th Cir. 1996)(The Fair Employment Act does not create a private right of action in court and all claims under it must be brought with the Equal Rights Division or not at all, citing Bachand, and referencing other authority for this proposition in fn.5). Present case law thus supports the view that federal judgments do not have claim preclusive effect on WFEA claims.
While the ALJ determined that the doctrine of claim preclusion did not bar Taylor's WFEA arrest record discrimination claim, the ALJ determined that the doctrine of claim preclusion did bar his WFEA retaliation claim. The commission concludes, however, that neither WFEA claim is barred by the doctrine of claim preclusion. It may be that the ALJ gave no real consideration to Taylor's WFEA retaliation claim because Taylor apparently conceded that he was not disputing that his retaliation claim could be dismissed under the doctrine of either claim or issue preclusion. However, if the doctrine of claim preclusion does not bar Taylor's WFEA arrest record claim because the Equal Rights Division is the exclusive forum in which he could bring a WFEA claim, then Taylor's WFEA retaliation claim likewise should not be barred by the doctrine of claim preclusion. Perhaps the resulting inconsistent application of the doctrine of claim preclusion here relates more to the confusion that has surrounded the preclusion doctrines. In Waid, the court gave the following analysis of the definitions of issue and claim preclusion because those doctrines are often confused:
"Issue and claim preclusion are both aspects of the more general doctrine of res judicata. (Citation omitted). As the Supreme Court has noted:
[i]ssue preclusion refers to the effect of a judgment in foreclosing the relitigation of a matter that has been litigated and decided. This effect is also referred to as direct or collateral estoppel. Claim preclusion refers to the effect of a judgment in foreclosing litigation of a matter that never has been litigated, because of a determination that it should have been advanced in an earlier suit. Claim preclusion therefore encompasses the law of merger and bar. (Internal citations omitted).
`Merger' and `bar' have special meaning in the lexicon of res judicata. `Merger' expresses the idea that, when a plaintiff prevails in a lawsuit arising from a particular transaction, all of the claims that the plaintiff did raise or could have raised merge into the judgment in [his or] her favor. If the plaintiff attempts to litigate any of those claims again, the judgment itself will actually serve as a defense. `Bar' refers to the companion idea that a judgment for a defendant in a lawsuit bars the plaintiff from litigating any of the claims that [he or] she did bring or could have brought in that suit. Restatement (Second) of Judgments sec. 24 (1982) (discussing `merger' and `bar' as aspects of claim preclusion)."
Waid at 863.
Under a correct analysis it is actually the doctrine of issue preclusion, not claim preclusion, which would serve as a basis for foreclosing Taylor from relitigating his WFEA retaliation claim. The Equal Rights Division has exclusive jurisdiction over Taylor's WFEA retaliation claim. Bachand. Under the law of "bar" the federal court judgment on Taylor's retaliation claim would not bar him from litigating his WFEA retaliation claim because he could not have brought that claim in his federal court action.
The following is a brief procedural and factual summary that supports application of the doctrine of issue preclusion as foreclosing relitigation of Taylor's WFEA retaliation claim:
Taylor commenced work with the respondent, a hospital, on September 21, 1998, as a registered nurse in the respondent's Behavioral Health Unit (BHU). The BHU is a locked unit in which the respondent provides in-patient care to adults with mental illness and/or substance abuse problems. These patients are a particularly vulnerable population at the hospital. Patients in the BHU are not allowed to keep all of their personal belongings. Registered nurses occupy an exceptionally high position of trust and responsibility with these patients. Registered nurses work to develop a relationship of trust with the patients, and they have and control access to the patients' belongings. On November 11 and December 9, 1998, Taylor complained about racial discrimination and harassment. Respondent personnel investigated Taylor's complaints. On December 15, 1998, the respondent met with Taylor and told him that his complaints were unsubstantiated.
Previously, on December 11, 1998, Taylor was arrested and charged with felony theft after a lengthy investigation into whether he had stolen donations to a building fund and church equipment at the Word of Faith Victory Center. This was a non-denominational Christian ministry that Taylor founded and served as the pastor and board president. Sometime after December 11, the respondent learned of Taylor's arrest and began investigating reports about the arrest to determine how the allegations against him could relate to his position in the BHU. Respondent was aware that the Wisconsin Caregiver Background Checks Law had recently gone into effect and that a felony theft charge could preclude a person from holding a position as a direct caregiver. After considering its obligation to ensure the safety and well being of the hospital's patients, visitors and employees, the respondent concluded that it could not allow Taylor to work pending further investigation. Respondent personnel met with Taylor on December 16, and advised him of his suspension.
On January 15, 1999, Taylor filed a charge with the EEOC alleging discrimination, harassment and retaliation.
On December 16, 1998, and again by letter dated the next day, the respondent asked for Taylor's cooperation in the respondent's investigation of his conduct. The December 17 letter from the respondent advised Taylor that he would be contacted for an investigatory interview during the week of January 4, 1999. Taylor responded by letter dated December 23, 1998, demanding that his attorney be present. Beginning in early January 1999 the respondent attempted to schedule an investigatory meeting with Taylor. Attempts were made by phone and letters written to Taylor to arrange a meeting, but he refused to meet with the respondent, with or without his attorney. While the respondent was attempting to arrange a meeting with Taylor, it was also conducting its own independent investigation into the criminal allegations against Taylor. This included collecting newspaper reports regarding Taylor's activities at his church, obtaining a police file concerning the charges against him, obtaining the preliminary hearing transcript that found probable cause that he had committed the offense charged with, and interviewing two former members of his congregation.
On March 12, 1999, the EEOC issued a no probable cause determination and issued Taylor a right-to-sue letter. On March 26, 1999, Taylor commenced an action in state court. Taylor alleged that he had been "suspended without pay.and effectively terminated from his employment." Among his causes of action pleaded was that the respondent had discriminated against him "because of his race and retaliation against (him) because of his complaints of racial discrimination" in violation of, among other rights, Title VII of the Civil Rights Act of 1964.
The respondent subsequently removed the case to federal court.
On March 30, 1999, the respondent terminated Taylor's employment.
On April 19, 1999, Taylor filed a charge with the Equal Rights Division alleging that the respondent violated the Fair Employment Act by terminating his employment in retaliation "for my having filed a discrimination complaint." Taylor further alleged that the respondent violated the Fair Employment Act by terminating his employment because of his arrest record.
On March 14, 2000, the federal court issued a decision and order granting the respondents' motion for summary judgment. A final judgment was entered on March 27, 2000. The following is included among the federal court's findings on Taylor's claims of discrimination and retaliation:
"In failing to respond to the vast majority of defendant's proposed findings of fact, plaintiff has made it difficult for this court to find that he has made a prima facie case of discrimination. First, plaintiff was arrested on charges that he stole money from his congregation. Although the alleged conduct occurred outside of his employment, plaintiff worked as a registered nurse with vulnerable patients. He occupied a position of trust and had full access to money, belongings, medication, and other property. Moreover, defendant, St. Michael, believed it had an obligation to investigate the alleged misconduct and determine whether plaintiff was suitable for his position.
Furthermore, plaintiff failed to advise St. Michael of the criminal allegations against him, refused to meet with supervising employees during their investigation of his complaints, ignored multiple letters seeking his cooperation, and hung up on the Vice President of Human Resources..
Even if this court were to find that plaintiff had made a prima facie case, defendants have offered a legitimate, nondiscriminatory business reason for the suspension and termination. After learning of his arrest through employees who had seen press coverage, St. Michael suspended plaintiff pending investigation into whether the alleged activity by plaintiff was inconsistent with his position as a registered nurse. Ultimately St. Michael terminated the plaintiff after investigation confirmed its suspicions. Notably, plaintiff did not respond to proposed findings regarding his position of trust as a nurse, the level of access to patients' belongings, or the information available to St. Michael in the investigation of plaintiff's criminal activity..
Plaintiff has not shown that St. Michael was lying, that its explanation was not the real reason for his suspension/termination, or that the proffered reason lacks factual support.
(fed. ct. decis. pp. 33-36)
Specifically addressing Taylor's retaliation claims, the federal court held:
"As discussed above, plaintiff has produced no evidence that St. Michael lied or concealed its motive for suspending his employment.
The same analysis applies to plaintiff's termination. The record shows repeated attempts by St. Michael to contact plaintiff and obtain his cooperation. St. Michael even departed from standard procedure and agreed to allow his attorney to be present. Plaintiff was terminated only after the investigation was completed - without his assistance - and after plaintiff acted in an insubordinate manner."
(fed. ct. decis. p. 40)(Emphasis added)
The doctrine of issue preclusion forecloses Taylor from litigating his WFEA claim that the respondent retaliated against him by terminating his employment for "having filed a discrimination complaint." The retaliation issue was actually litigated. Crozier. The court determined that the respondent's motive for terminating Taylor's employment was that its independent investigation into the charges against him led it to believe that he had engaged in serious misconduct and betrayed the trust of the individuals who had believed in him and his ministry, which in turn rendered him unsuitable for the position of registered nurse in the BHU. Taylor could have obtained a review of the court's decision. (As indicated at p. 8, fn. 2 of the ALJ's decision, Taylor chose not to do so.) The issue in question is one of fact (why did the respondent suspend and terminate Taylor's employment?) and thus not one of law that involves two distinct claims or intervening contextual shifts in the law. Clearly, the quality/extensiveness of Taylor's federal court action was not less than what Taylor would have received before the Equal Rights Division. Further, the same burden of persuasion that applied in the federal action would apply in Taylor's claim before the Equal Rights Division. Finally, there are no matters of public policy and individual circumstances involved that would render issue preclusion to be fundamentally unfair. Taylor had a complete opportunity to obtain a full and fair adjudication in his federal action.
Taylor makes the following arguments on appeal. Taylor argues that while the ALJ correctly determined that the doctrine of claim preclusion could not be applied to his claim of arrest record discrimination, the ALJ erroneously determined that the doctrine of issue preclusion could be applied. Taylor argues that there is no authority extant to support the ALJ's ruling, and that it implicitly nullifies the mandate of Bachand because "If the exclusive remedy to enforce the anti-discrimination provision of the WFEA is the filing of an employment discrimination complaint with the Equal Rights Division of the Department of Workforce Development, gratuitous findings of a state or federal court in a disparate [treatment] case on other claims properly in that forum should have no collateral impact." Taylor is incorrect, however. Issue preclusion forecloses duplicative litigation of issues of fact or law; jurisdiction does not factor into the analysis. See, for example, Moore v. LIRC, 175 Wis. 2d 561, 567, 499 N.W.2d 288 (Ct. App. 1993) (federal court's adverse determination of whether plaintiff was an "employee" under Title VII prevented his relitigating claim that he was an "employee" under the WFEA by doctrine of issue preclusion).
Taylor argues that it is significant to note that "the Memorandum Opinion of the Administrative Law Judge makes no SPECIFIC REFERENCE or citation to the `facts found by the Federal Court in the March 14, 2000 decision.' " This argument is simply without merit. At page 2 of her decision in prefatory comments that preceded her findings of fact, the ALJ specifically stated that her findings were based on the findings made in the federal court's March 14, 2000 decision, and these findings indeed closely mirror those findings made by the federal court.
Taylor argues that since the federal court had no jurisdiction over his claim of arrest record discrimination, none of the five Crozier standards were met. Again, issue preclusion is not a question of whether federal court jurisdiction exists. Issue preclusion refers to the effect of a judgment in foreclosing relitigation in a subsequent action of an issue or law or fact that has been actually litigated and decided in a prior action. Northern States Power Co. v. Bugher, 189 Wis. 2d 541, 525 N.W.2d 723 (1995). Also, contrary to argument by Taylor, the Crozier fundamental fairness standards were met. As previously noted above in connection with Taylor's WFEA retaliation claim, Taylor could have obtained a review of the federal district court's decision. The issue in question is one of fact (why did the respondent terminate Taylor's employment?) and thus not one of law that involves two distinct claims or intervening contextual shifts in the law. Clearly, the quality/extensiveness of Taylor's federal court action was not less than what Taylor would have received before the Equal Rights Division. Further, the same burden of persuasion that applied in the federal action would apply in Taylor's claim before the Equal Rights Division. Finally, there are no matters of public policy and individual circumstances involved that would render issue preclusion to be fundamentally unfair. Taylor had a complete opportunity to obtain a full and fair adjudication in his federal action.
Taylor further argues, however, that the ALJ erroneously reads City of Onalaska v. LIRC, 120 Wis. 2d 363, 354 N.W.2d 223 (Ct. App. 1984), to hold that because the respondent conducted its own investigation into his arrest, the respondent avoids liability under the WFEA. Taylor argues that such a holding "implicitly repeals" the Act's prohibition against arrest record discrimination. Wisconsin Statute section 111.32(1) defines the term arrest record as follows: " 'Arrest record' includes, but is not limited to, information indicating that an individual has been questioned, apprehended, taken into custody or detention, held for investigation, arrested, charged with, indicted or tried for any felony, misdemeanor or other offense pursuant to any law enforcement or military authority." The ALJ did not erroneously read City of Onalaska. What the court held in City of Onalaska was that it is not discrimination because of arrest record under the WFEA where "the employer discharges an employe because the employer concludes from its own investigation and questioning of the employe that he or she has committed an offense." 120 Wis. 2d at 367.
Taylor argues, however, that there is a "critical" distinction between the instant case and City of Onalaska because in City of Onalaska complainant David Bentzen was a "police trainee." Bentzen's brother-in-law had been arrested by the Onalaska Police Department for, among other things, racing. Bentzen responded to an Onalaska Police Department officer's question stating that he supposed he was the person with whom his brother-in-law was racing. The fact that Bentzen was a police trainee when questioned makes no difference. The City of Onalaska Police Department was his employer and was conducting an investigation and questioning him about his conduct.
Apparently Taylor also sees a distinction because he was arrested while Bentzen had not been arrested or charged with criminal activity when he resigned. Taylor argues that not only is it undisputed that he was arrested, but that his employment was terminated because of that arrest.
The fact that Taylor was arrested does not change the fact that the respondent did not terminate his employment until after concluding from its own investigation that he had committed an offense that made him unsuitable for employment. An employer does not violate the prohibition against arrest record discrimination when it concludes from its own investigation and questioning of an employee that he or she has committed an offense. City of Onalaska. Moreover, the record fails to support Taylor's claim that he was terminated because of his arrest. As found by the federal court and stated in the ALJ's decision, after learning of Taylor's arrest on charges that he stole money and equipment from his congregation, the respondent conducted its own investigation of Taylor's conduct. This included collecting newspaper reports regarding Taylor's activities at his church, attempting on several occasions to schedule an investigatory meeting with Taylor concerning the criminal allegations against him (which he refused to attend, with or without his attorney), obtaining a police file concerning the charges against him, obtaining the preliminary hearing transcript that found probable cause that he had committed the offense charged with, and interviewing two former members of his congregation. Based upon its investigation, the respondent concluded that Taylor had engaged in serious misconduct and betrayed the trust of individuals who had believed in him and his ministry. Further, the respondent concluded that this misconduct rendered him unsuitable for the position of trust and responsibility of a registered nurse in its Behavioral Health Unit (BHU). Specifically, it was believed that Taylor's actions in misleading and stealing from his parishioners posed a threat to the safety and well being of the patients, employees, and visitors in the BHU.
Finally, Taylor argues that because he never admitted to the offense and was terminated whereas Bentzen admitted the offense and resigned before he was discharged, this distinction makes a difference. This argument also fails. Nothing in City of Onalaska indicates the need for Taylor's admission to committing an offense in order for the respondent to avoid liability against a complaint of arrest record discrimination. There can be no question that the respondent had a good- faith belief that Taylor had committed the offense he was charged with. Before making the decision to terminate Taylor's employment, the respondent investigated his conduct in connection with his ministry by collecting news reports of his activities at his church, reviewing documentation from church members contained in the police file, reviewing the transcript from his preliminary hearing, interviewing witnesses from his church, and repeatedly attempting to schedule meetings with Taylor to get his side of the story.
Robert E. Sutton
Scott C. Beightol
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