P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


CITY OF KENOSHA, Respondent A, 


ERD Case No. 9312348, EEOC Case No. 26G901490

In a complaint filed with the Equal Rights Division of the Department of Industry, Labor and Human Relations ("Division") on August 17, 1990, the complainant alleged that the respondents had violated the Wisconsin Fair Employment Act ("Act") by commencing a civil action against her in retaliation for her filing of a previous complaint under the Act, in violation of sec. 111.322(3) Stats. In an Initial Determination issued on September 2, 1993 (1)   an investigator for the Division concluded that there was no probable cause to believe that the respondents had violated the Act as alleged. The complainant appealed, and following hearing an administrative law judge (ALJ) for the Division issued a decision on October 7, 1994 which dismissed the complaint on the grounds of equitable estoppel. A timely petition for review was filed.

A briefing schedule was established on December 9, 1994 which called for the complainant to file her brief on or before January 13, 1995, with the respondent's brief to be filed on or before February 13, 1995 and complainant's reply brief to be filed on or before February 28, 1995. As of February 3, 1995 the complainant had filed no brief, and an extension of the briefing schedule was issued under which the respondent was to file a brief on or before March 3, 1995, with the complainant allowed until March 17, 1995 to file a reply brief. The respondent filed a brief on March 3, 1995; thereafter, the complainant filed no reply brief.

The commission has considered the petition and the argument which has been submitted, and it has reviewed the evidence submitted to the ALJ. Based on the applicable law, records and evidence in this case, the commission makes the following:


1. On June 6, 1989 Complainant Patricia Stillwell ("Stillwell") filed a complaint with the Equal Rights Division which alleged that the City of Kenosha and the Kenosha Water Utility ("City") (2)   had discriminated against her because of her sex in terms and conditions of employment.

2. Stillwell's employment was terminated by the City on July 12, 1989.

3. Stillwell filed a grievance concerning her termination with the City of Kenosha Civil Service Commission.

4. Following Stillwell's termination there were negotiations between Stillwell's attorney, who at that point was Walter Stern, and the City, concerning a settlement agreement covering all matters in dispute between Stillwell and the City and including Stillwell's termination. On July 27, 1989 Stern met with the City's Personnel Director and offered the City certain terms for settlement, which were accepted by the City later that day. Under those terms, Stillwell would be allowed to resign and would receive a letter of recommendation, the City would not contest her claim for unemployment compensation, and in return Stillwell would withdraw all pending claims against the City and would also execute a general release of any and all claims she had or might bring against the City in connection with her employment and the termination of her employment.

5. The terms of the settlement made between Stern and the City were reduced to writing and on August 3, 1989 this written settlement agreement was submitted to Stillwell and Stern. After Stern raised two points of clarification which were addressed by modifications made to the document, Stern believed, and he indicated to Stillwell that he believed, that the written settlement agreement secured what she had bargained for and was a binding settlement.

6. Stillwell refused to sign the written settlement agreement. Stern subsequently withdrew as her counsel.

7. Because Stillwell had not signed the settlement agreement and had therefore not withdrawn her grievance which was pending before the Civil Service Commission, those proceedings continued. Then on October 5, 1989 Stillwell filed a second complaint with the ERD (assigned ERD Case No. 8952254), which alleged that the City and the Water Utility had terminated her in retaliation for her having filed her earlier discrimination complaint and which also alleged sex discrimination in regard to the termination.

8. Facing multiple claims in two forums which concerned circumstances of Stillwell's employment and her termination which had been resolved by the settlement agreement negotiated between and agreed to by Stern and the City, the City commenced a civil action against Stillwell in the Kenosha County Circuit Court. This action was assigned Case No. 89-CV-001413. It alleged that notwithstanding Stillwell's refusal to sign a written copy of it, an oral settlement agreement resolving (among other things) Stillwell's claim that the termination was discriminatory had in fact been reached in the negotiations with Attorney Stern, and that Stillwell's second ERD complaint (concerning the termination) was contrary to that settlement agreement. It sought to have that alleged agreement enforced.

9. The City's civil action was commenced in response to Stillwell's filing of ERD Case No. 8952254. However, it was not commenced out of any desire to punish or retaliate against Stillwell for her exercise of her statutory right to complain of alleged employment discrimination. The City's civil action was commenced on the basis of a belief, which was both objectively reasonable and subjectively held in good faith, that all pending and potential allegations of employment discrimination concerning the terms of Stillwell's employment and the circumstances of her termination had been settled and that Stillwell had entered into a binding contractual agreement to dismiss and not pursue those claims.

10. Stillwell and the City subsequently entered into negotiations concerning matters then in dispute between them. At this point, Stillwell was represented by Attorney Mark Rogers.

11. In June, 1990 a settlement agreement was arrived at by Rogers and the representatives of the City.

12. The terms of the settlement agreement arrived at between Rogers and the City's representatives were stated in a June 13, 1990 letter from Rogers to the City's counsel. The letter expressly stated that the extent of the agreement was that 1) counsel would execute and submit to the court a Stipulation and Order for Dismissal of the case of City of Kenosha v. Stillwell, Case No. 89-CV-001413 on its merits without costs to either party; (2) Stillwell would request withdrawal with prejudice of her Equal Rights Division complaint in ERD Case No. 8952254 and EEOC No. 26G900047; and (3) and the City of Kenosha would agree to reimburse Rogers for half of the costs of the appearance fee for the court reporter on April 25, 1990, in the amount of $82.50. The letter further expressly stated that there were "no other agreement (sic) or arrangements relating to any other matters".

13. The City's counsel did not dispute or disagree with the characterization of the terms of the settlement as set forth in Attorney Rogers' letter of June 13, 1990. Thereafter, and pursuant to that settlement, the City withdrew its civil action and paid the agreed portion of the costs that had been incurred in connection with the deposition. Stillwell also withdrew her first retaliation complaint, ERD Case No. 8952254.

14. Stillwell subsequently filed her complaint in the instant matter, on August 17, 1990. It alleged that the City's commencement of a civil action against Stillwell had been an act of retaliation for her having filed the earlier retaliation complaint, No. 8952254, which violated sec. 111.322(3), Stats.

15. The City and its representatives may have subjectively believed, in good faith, that the settlement agreement arrived at between Attorney Rogers and the City in June 1990 precluded Stillwell from bringing any claims against the City in connection with its commencement of a civil action against her, but this belief was not objectively reasonable because the terms of that settlement had been expressly limited to 3 specific undertakings and could not be construed to extend to the question of whether the City's commencement of a civil action against Stillwell had violated the Fair Employment Act.

Based on the Findings of Fact made above, the commission makes the following:


1. The City of Kenosha, and its subdivision, the City of Kenosha Water Utility, are employers within the meaning of the Wisconsin Fair Employment Act.

2. The complaint in this matter is not barred by the doctrine of equitable estoppel.

3. There is no probable cause to believe that the City's commencement of a civil action against Stillwell based on its reasonable, good faith belief that Stillwell's complaint in ERD Case No. 8952254 was barred by the settlement agreement of 1989, was a violation of sec. 111.322(3), Stats.

Based on the Findings of Fact and Conclusions of Law made above, the commission makes the following:


The complaint in this matter is dismissed.

Dated and mailed September 29, 1995
stillpa . rrr : 110 : 

/s/ Pamela I. Anderson, Chairman

/s/ Richard T. Kreul, Commissioner

/s/ David B. Falstad, Commissioner


Equitable Estoppel -- The defense of equitable estoppel requires proof of action or non-action, on the part of one against whom estoppel is asserted, which induces reliance thereon by the other, either in action or non-action, which is to his detriment. Chicago & Northwestern Transportation Co. v. Thoreson Food Products, Inc., 71 Wis.2d 143, 153, 238 N.W.2d 69 (1976). The City asserts that it relied on Stillwell's statements and actions in connection to the 1990 settlement as indicating that she was not going to make any further complaints against the City, and that it did so to its detriment since its voluntary dismissal of its civil action against Stillwell cannot now be undone. It is elementary, however, that the reliance on the words or conduct of the other must be reasonable, Id, at 154, and justifiable, Matter of Alexander's Estate, 75 Wis.2d 168, 183-84, 248 N.W.2d 475 (1977). Given the expressly limited nature of the June, 1990 settlement agreement, the commission concludes that it was not reasonable for the City to assume that Stillwell had given up her right to bring a retaliation charge against the City complaining of the fact that the civil action was brought in the first place.

The commission has noted the comment by the Court of Appeals in its decision that remanded this matter to the ERD for further proceedings, to the effect that the court "[did] not doubt that the city legitimately believed that all matters had been put in repose when the parties' second settlement was accomplished." The City argues that this shows that the Court of Appeals felt that the City's belief that the settlement agreement precluded any subsequent retaliation claim involving the commencement of the civil action was reasonable.

The commission does not agree. The Court of Appeals expressly represented that it was not deciding the question of whether equitable estoppel applied. The commission accepts this representation at face value, and it will not join the City in its implicit assumption that the Court: of Appeals was being disingenuous in this representation and was in fact "signaling" its views on the question. Instead, the commission concludes that the Court of Appeals was only commenting on what appeared to it to be the subjective genuineness. of the city's belief, rather than on its objective reasonableness. Thus, the commission believes that the word "legitimately" was used here in the sense of "actually" rather than the sense of "reasonably".

The city may have actually believed that the settlement put everything behind it. However, that belief was not a reasonable one. There have been a number of reported cases in which persons have brought complaints under employment discrimination laws alleging that an employer's commencement of a civil action against an employe who had previously filed another discrimination claim, was unlawful retaliation. See, e.g., EEOC v. Virginia-Carolina Veneer Corp., 495 F. Supp. 775, 27 FEP Cases 340 (W.D. Va. 1980) (defamation action against former employe based on the employe's discrimination claims, alleged to be retaliatory); Thomas v. Petrullis, 35 FEP Cases 190 (Ill. App. Ct. 1984) (libel action against former employe based on the employe's discrimination claims, alleged to be retaliatory); EEOC v. Levi-Strauss & Co., 515 F. Supp. 640 (N.D. Ill. 1981) (filing of tort lawsuit against former employe alleged to be retaliatory) ; Cooper v. Pic Walsh Freight Co., 27 FEP 344 (E . D . Mo. 1976). This law has also been recognized locally. In Pufahl v. Niehbur et ano. (LIRC, August 16, 1991), the commission opined that an employer's filing of a lawsuit in tort against an equal rights complainant seeking damages for defamation or malicious prosecution could be subject to the anti-retaliation provision, and this observation was confirmed by Dane County Circuit Court Judge Angela Bartell when she affirmed the commission's decision, sub nom. Pufahl v. LIRC (Dane Co. Cir. Ct., June 16, 1992). A claim that the very commencement of the civil action was itself an independent violation of the Fair Employment Act, was thus a possibility that a reasonable employer, represented by experienced counsel, should have recognized.

The narrowly limited settlement agreement entered into in June 1990 clearly did not preclude such a claim. The commission sees nothing in the evidence concerning the negotiations over that settlement agreement (such as collateral statements or representations made in the course of the negotiations) which would have given any basis for an assumption on the part of the City that the agreement somehow disposed. of Stillwell's right to bring such a claim. Indeed, the express limitation of the agreement to other matters makes it difficult to conceive of how a reasonable basis for such a belief could ever have been found on the basis of any such collateral statements, even if they had existed.

For these reasons, the commission does not agree with the Administrative Law Judge's holding on the equitable estoppel issue. It therefore addresses the merits of the case, which presents the question of whether there is probable cause to believe that the City's commencement of the legal action against Stillwell violated the WFEA's anti-retaliation provisions.

Retaliation -- It is really not disputed that the City's legal action against Stillwell was motivated by and in response to her second complaint of discrimination filed. with the ERD on October 5, 1989. As noted, it has been recognized that commencing a legal action against an employe or former employe because they have made a charge of discrimination, can be a violation of anti-retaliation provisions.

The theory of the City is that it did not bring the action out of any kind of desire to retaliate against or punish Stillwell for having brought that complaint, but in good faith to enforce what it believed to be a valid settlement agreement entered into by Stillwell through her attorney, Walter Stern. Stillwell does not seem to have seriously disputed the legal premise of this argument when it was made below (that such an action, if brought in good faith merely in an attempt to enforce what the party believes is. a valid, binding settlement, is not unlawful), and there is support for it.

There do not appear to be any reported decisions dealing with the question of whether actions in contract to enforce alleged settlement agreements violate anti-retaliation provisions. However, there have been cases involving actions in tort alleging malicious prosecution or slander, and holding that even these kinds of actions may be viewed as non-retaliatory if they are brought in good faith and in an effort to rehabilitate an employer's reputation from the effects of what it genuinely believes to be false charges. EEOC v. Levi-Strauss & Co., 515 F. Supp. 640 (N.D. Ill. 1981), Bartulica v. Paculdo, 411 F. Supp. 392, 21 FEP 497 (DC WD Mo, 1976) ; but see, EEOC v. Virginia Carolina Veneer Corp., 495 F. Supp. 775, 27 FEP 340 (DC WD Va, 1980).

The commission views attempts to enforce alleged settlement agreements as less potentially punitive than tort actions for malicious prosecution or slander, since the exposure for damages is not as great. In addition, an action in contract which seeks to enforce an alleged settlement agreement simply does not challenge the authority of the enforcement agency in the same way that a malicious prosecution or slander action against a person who has filed a complaint with that agency does. Thus, in cases involving contract actions to enforce alleged settlement agreements, the argument for recognizing the good faith of the plaintiff as a distinguishing factor is even stronger than in the case of tort actions. For these reasons, the commission believes that it is a reasonable construction of the WFEA's anti-retaliation provision, that it does not necessarily make unlawful an employer's attempts to judicially enforce an alleged settlement agreement if the enforcement action has a colorable basis and is brought in good faith and without any punitive motive.

The issue concerning the employer's intent and motivation is one of fact. Stillwell's argument (at least to the Administrative Law Judge; as noted, she filed no brief or other argument with the commission) seems to be that the City was not acting in good faith, that the City knew that there was no valid settlement to be enforced by its action, and that it was in fact bringing the action with a retaliatory and punitive purpose. However, the evidence amply supports a conclusion that the employer genuinely believed that a settlement agreement had been reached between it and Stillwell when she was represented by Walter Stern. That evidence leaves little doubt that this was a mine-run case in which a party's attorney entered into a settlement agreement that was within the authority the client had extended, and the client then had second thoughts about it later. This supports the conclusion that this was exactly what the City thought -- in other words, that the City in fact believed in good faith that a settlement had been arrived at.

The view that this settlement was binding, would have been a reasonable one on the part of the City. The Commission has consistently declined to entertain collateral attacks on settlement agreements resolving discrimination claims even where allegations are made that the attorney who represented the employe acted improperly in some respect, including entering into settlement terms not authorized by the client, see, Brunswick v. Emergency Services of Door County (LIRC, 12/08/94), Kaufer v. Miller Brewing Co. (LIRC, 11/19/93), Johannes v. County of Waushara Executive Committee (LIRC, 11/01/93), and where the attorney acted within their authority in agreeing to certain terms of settlement, the Commission has held that the oral settlement agreement entered into on a party's behalf by their attorney will be upheld against subsequent collateral attack. Pustina v. Fox & Fox, S.C. (LIRC, 04/27/93). The fact that it would have been reasonable both on the facts and in view of the law, to believe that there had been a binding settlement when the City accepted the proposal made by Attorney Stern on Stillwell's behalf, supports the conclusion that this was indeed the City's belief. For these reasons the commissions concludes that there is no probable cause to believe that the City's actions here were a violation of the Act.

cc: Attorney Thomas W. Mackenzie

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(1)( Back ) The delay was occasioned by the Division's initial dismissal of the complaint on the theory that it failed to state a claim under the Act. This dismissal was appealed and was eventually reversed by the Court of Appeals in an unpublished decision issued on March 17, 1993.

(2)( Back ) It is not disputed that the Kenosha Water Utility is a subdivision of the City of Kenosha.


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