ANTHONY J. BETTERS, Complainant
KIMBERLY AREA SCHOOLS, 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.
Based on its review, and for the reasons set forth in the Memorandum Opinion attached hereto, the commission now makes the following:
Dated and mailed July 30, 2004
bettean . rpr : 110 :
/s/ James T. Flynn, Chairman
/s/ David B. Falstad, Commissioner
/s/ Robert Glaser, Commissioner
This case arises out of an allegation that the Kimberly Area Schools discharged Anthony J. Betters, a maintenance employee, because of his arrest record. The ALJ decided that there had been no unlawful discrimination because, she found, the respondent had acted not because of the complainant's arrest but because of its belief, based on its own independent investigation, that the complainant had engaged in the conduct charged in the arrest.
This rationale is potentially viable under the interpretation of the WFEA's arrest record provision articulated in City of Onalaska v. LIRC, 120 Wis.2d 363, 354 N.W.2d 233 (Ct. App. 1984). Whether it is actually viable in this or any other particular case, depends on the specific facts about what information led the employer to form its beliefs about the employee's conduct, and also about whether it was those beliefs, or the employer's awareness of the employee's arrest, that actually motivated the decision. Thus, the facts are crucial.
The complication here, is that the ALJ resolved this case without holding a hearing. She decided that no hearing was necessary because all of the material facts necessary to the application of the rationale relied on were, in her view, established by a grievance arbitration award that she decided was entitled to be given conclusive effect under principles of issue preclusion.
It has been recognized that ALJs may appropriately dismiss complaints for failure to state a claim, without providing an opportunity for hearing, if it appears that even if what is claimed by the complainant is true, the complainant cannot prevail and a decision in favor of the respondent is required as a matter of law. Lau v. Latec Credit Union (LIRC, February 7, 2003), Ficken v. Harmon Solutions Group (LIRC, February 7, 2003). However, this case presents a somewhat different situation. The allegations of the complaint clearly state a claim. The conclusion that the complainant cannot prevail and that a decision in favor of the respondent is required as a matter of law must rest on an assumption that (1) certain facts found in the arbitration award are conclusive, and that (2) no other facts that the complainant might be able to prove at a hearing would be able to negate the effect of the facts established by the arbitration award
To decide whether the ALJ's decision was correct, it is first necessary to decide what effect the arbitration award should be given - i.e., preclusive effect, some other degree of weight, etc. It is then necessary to determine whether, in light of whatever effect is appropriately given to the arbitration award, it was correct to conclude that under the Onalaska rule the complaint could not possibly be sustained on the merits in this matter no matter what other evidence was introduced, and could thus be dismissed without a hearing.
Effect of the arbitration award --
As the ALJ noted in her Memorandum Opinion, the general law concerning the effect of a decision of one tribunal in a subsequent matter pending before another tribunal recognizes two types of preclusive effect: claim preclusion and issue preclusion. The Wisconsin Supreme Court has explained these in this way:
[U]nder claim preclusion "`a final judgment is conclusive in all subsequent actions between the same parties [or their privies] as to all matters which were litigated or which might have been litigated in the former proceedings.' " Lindas v. Cady, 183 Wis. 2d 547, 558, 515 N.W.2d 458, 463 (1994) (quoting DePratt v. West Bend Mutual Ins. Co., 113 Wis. 2d 306, 310, 334 N.W.2d 883, 885 (1983)). Further, claim preclusion is "designed to draw a line between the meritorious claim on the one hand and the vexatious, repetitious and needless claim on the other hand." Purter v. Heckler, 771 F.2d 682, 689-90 (3rd Cir. 1985).
Issue preclusion 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 689 n.5. Unlike claim preclusion, an identity of parties is not required in issue preclusion. Michelle T. v. Crozier, 173 Wis. 2d 681, 687, 495 N.W.2d 327, 330 (1993). Issue preclusion is a narrower doctrine than claim preclusion and requires courts to conduct a "fundamental fairness" analysis before applying the doctrine. See id. at 686-87, 495 N.W.2d at 330-31 ("Formalistic requirements . . . have gradually been abandoned in favor of a looser, equities-based interpretation of the doctrine.") Under this fundamental fairness analysis, "courts consider an array of factors in deciding whether issue preclusion is equitable in a particular case." Lindas, 183 Wis. 2d at 559, 515 N.W.2d at 463.
Northern States Power Co. v. Bugher, 189 Wis.2d 541, 550-51, 525 N.W.2d 723 (1995).
In her decision, the ALJ relied on a number of commission decisions in which claim or issue preclusion was applied. (1) Notably, however, all of the decisions relied on by the ALJ concerned the question of the effect to be given to a federal court decision in a subsequent proceeding under the WFEA. It has long been recognized that the matter of the effect to be given to an arbitration award in a proceeding under a statute prohibiting employment discrimination, presents a different question.
There are in fact a number of commission decisions that deal specifically with the question of the preclusive effect to be given arbitration awards. See, Lee v. Dane County Highway Dept. (LIRC, July 24, 1998), Seeman v. Universal Foods (LIRC, March 30, 1992), Moncrief v. Gardner Baking Co. (LIRC, July 1, 1992), Krueger v. Dept. of Transportation (LIRC, October 4, 1982). The Equal Rights Decision Digest also reports a number of other relevant decisions on this issue, including decisions of the Personnel Commission, Dohve v. DOT (Wis. Personnel Comm., November 3, 1988), Massenberg v. UW-Madison (Wis. Personnel Comm., July 21, 1983), and circuit court decisions, Winnebago County v. LIRC (Brehm and Boutin) (Dane Co. Cir. Ct., September 18, 1978), Nielson Iron Works v. LIRC (Oliver) (Racine Co. Cir. Ct., March 22, 1982).
The ALJ did not acknowledge any of these decisions. The ALJ also did not acknowledge the U.S. Supreme Court decision which it is important to consider in any discussion of the question of whether a grievance arbitration award could or should be given preclusive effect in a subsequent employment discrimination case: Alexander v. Gardner-Denver Co., 415 U.S. 36, 39 L. Ed. 2d 147, 94 S. Ct. 1011 (1974). In that case, the lower courts had held that the employee petitioner could not sue for employment discrimination under Title VII because an arbitrator had already ruled, in a collective-bargaining agreement grievance proceeding, that the employee had been discharged for just cause. The Supreme Court rejected this analysis, and concluded that an arbitrator's resolution of a contractual claim was not dispositive of a statutory claim under Title VII:
There is no suggestion in the statutory scheme that a prior arbitral decision either forecloses an individual's right to sue or divests federal courts of jurisdiction. In addition, legislative enactments in this area have long evinced a general intent to accord parallel or overlapping remedies against discrimination. In the Civil Rights Act of 1964, 42 U. S. C. § 2000a et seq., Congress indicated that it considered the policy against discrimination to be of the "highest priority." Newman v. Piggie Park Enterprises, supra, at 402. Consistent with this view, Title VII provides for consideration of employment-discrimination claims in several forums. See 42 U. S. C. § 2000e-5 (b) (1970 ed., Supp. II) (EEOC); 42 U. S. C. § 2000e-5 (c) (1970 ed., Supp. II) (state and local agencies); 42 U. S. C. § 2000e-5 (f) (1970 ed., Supp. II) (federal courts). And, in general, submission of a claim to one forum does not preclude a later submission to another. Moreover, the legislative history of Title VII manifests a congressional intent to allow an individual to pursue independently his rights under both Title VII and other applicable state and federal statutes. The clear inference is that Title VII was designed to supplement, rather than supplant, existing laws and institutions relating to employment discrimination. In sum, Title VII's purpose and procedures strongly suggest that an individual does not forfeit his private cause of action if he first pursues his grievance to final arbitration under the nondiscrimination clause of a collective- bargaining agreement.
415 U.S. at 47-49.
Alexander v. Gardner-Denver has influenced the law that has developed on this question in Wisconsin. Thus, in Krueger v. Dept. of Transportation (LIRC, October 4, 1982), the commission expressly agreed with and adopted the rationale and holding of Alexander v. Gardner-Denver. The commission specifically rejected the notion that an arbitrator's decision would preclude the department or the commission from examining de novo the issue of whether or not an employee was the victim of discrimination, and adopted instead that approach, suggested by the Supreme Court in Alexander v. Gardner-Denver, 415 U.S. at 60, that what is appropriate is to admit the arbitral decision as evidence and to accord it such weight as may be appropriate under the facts and circumstances of each case. Krueger, and its reliance on Alexander v. Gardner-Denver, has in turn been looked to in subsequent decisions involving the question of the effect to be given to grievance arbitration awards. See, Moncrief v. Gardner Baking Co (LIRC, July 1, 1992).
The ALJ's rationale in this case was that she was giving the arbitration award issue preclusion effect, which meant that the complainant was precluded from (re)litigating factual issues that had been litigated before and decided by the arbitrator.
The commission recognizes, that there is some authority for giving an arbitration award "issue preclusion" effect to prevent re-litigation of specific factual issues. Thus, in LIRC's 1992 Seeman v. Universal Foods decision, the parties to the arbitration proceeding had litigated, and the arbitrator had decided, a factual issue as to what job duties the employee could perform in view of his medical restrictions. The same factual issues were presented in the discrimination proceeding under the WFEA, which involved an allegation that the employer had discriminated against the complainant because of disability by compensating him at a low "light duty" classification rate when he was (he alleged) capable of performing all of his normal job duties notwithstanding his medical condition. The commission concluded:
[T]he Administrative Law Judge correctly applied the doctrine of collateral estoppel. Under this doctrine's application, the Administrative Law Judge is collaterally estopped by virtue of the arbitration decision from relitigating the dispute surrounding the medical evidence, the Complainant's permanent partial disability, the job duties, the Complainant's ability to perform the job duties and comparisons between the employe's ability and other employes' abilities to perform the tasks and job functions.
The commission distinguished Alexander v. Gardner-Denver Co. and Krueger v. DOT by characterizing those cases as involving the issue of whether submission of a dispute to grievance arbitration could be considered to completely eliminate the right to pursue an employment discrimination action arising from the same dispute. The commission said,
The application of collateral estoppel does not prevent the Complainant in this instance from pursuing an equal rights claim. Instead, application of collateral estoppel prevents both parties from relitigating relevant factual disputes already decided at the arbitration hearing. Thus, the Administrative Law Judge is collaterally estopped from relitigating the facts surrounding the Complainant's permanent light duty classification.
While Seeman can thus be taken as some support for giving "issue preclusion" effect to an arbitration award, there are two important reasons for considering it less than compelling in the instant case. One is, that Seeman did not involve, and thus did not test the viability of, a decision to deny a litigant their right to a hearing altogether. The second reason is, that subsequent decisions have recognized significant limitations on the application of "issue preclusion" that were not recognized in Seeman.
In a 2001 decision, the commission noted a significant limitation on the application of issue preclusion, which had not been mentioned in the Seeman decision: the fact that application of issue preclusion is subject to a "fundamental fairness" standard. This 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; and
(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?
Taylor v. St. Michael Hosp. (LIRC, May 31, 2001), citing Michelle T. v. Crozier, 173 Wis. 2d 681, 689, 495 N.W.2d 327 (1993). The commission thus turns to the question of whether these "fundamental fairness" standards were satisfied in this case.
The ALJ here found that the arbitration award was subject to appeal and review under ch. 788. However, there are two important qualifications which must be noted in respect to this.
First, the scope of the review available under ch. 788 is very limited. Milwaukee Professional Firefighters, Local 215, IAFF, AFL-CIO, v. City of Milwaukee et ano., 78 Wis. 2d 1, 21, 253 N.W.2d 481 (1977). The grounds upon which a court may set aside an award of an arbitrator are limited by statute to circumstances in which the award "was procured by corruption, fraud or undue means"; "there was evident partiality or corruption on the part of the arbitrators"; "the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced"; or "the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made". Wis. Stat. § 788.10(1). The limited nature of the "exceeded their powers" standard is reflected by decisions such as Flexible Manufacturing Systems v. Super Products Corp. 86 F.3d 96 (1996), which held that the fact that an arbitrator made a mistake by erroneously rejecting a valid legal defense does not provide grounds for vacating an award unless the arbitrator deliberately disregarded the law.
Second, the complainant would not necessarily have had the right, on his own, to obtain review of the arbitration award in this case. A collective bargaining agreement is a contract between the employer and the union, as to which the employee is essentially just a third-party beneficiary. An employee may be aggrieved by an action taken by the employer, but the grievance concerning that action belongs to the union, since it is at its core a dispute about whether the employer violated the collective bargaining agreement. It is the union which decides whether a grievance will even be submitted to arbitration. "The employee does not have an absolute right to arbitration." Coleman v. Outboard Marine Corp., 92 Wis.2d 565, 285 N.W.2d 631 (1979); see also, Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903, 17 L.Ed.2d 842 (1967). Similarly, a decision on whether an arbitration award, once rendered, will be appealed to court, is not one which the employee controls. Lofton v. U. S. Postal Service, 592 F. Supp. 36 (DC SDNY, 1984).
For these reasons, the commission concludes that the first of the five "fundamental fairness" factors relevant to a determination of whether issue preclusion should be applied, is not well satisfied in cases involving grievance arbitration (as compared, say, to a conventional court decision).
The second "fundamental fairness" standard asks whether the question is one of law that involves two distinct claims or intervening contextual shifts in the law. The commission believes that this is very much the case here. In the arbitration, the question was whether there was "just cause" for the discharge of the employee. In the WFEA proceeding, the question is whether the employer discriminated against the complainant because of arrest record - and specifically, whether the employer made the challenged discharge decision because of a belief that the employee had engaged in unacceptable conduct which was based not on the employee's arrest record but rather on an independent investigation as contemplated by the Onalaska decision. The questions are quite different. The arbitrator was not asked to decide, and did not decide, to what extent the employer was motivated by what it learned from what the arbitrator described as its "contacting and talking with representatives of the police and prosecutorial offices, and obtaining statements and police reports", as opposed to its other methods of investigating the matter (such as talking directly to the employee's wife and to the employee) which did not involve reliance on the arresting and prosecutorial authorities themselves. As will be discussed below, this is very relevant to determining whether the employer's investigation was sufficiently independent of the employee's "arrest record" to allow the Onalaska rule to be invoked.
The third and fourth "fundamental fairness" factors do not militate against the application of issue preclusion in the circumstances presented in this case, but the fifth arguably does. That standard asks, whether there are matters of public policy and individual circumstances involved that would render the application of issue preclusion fundamentally unfair, including inadequate opportunity or incentive to obtain a full and fair adjudication in the initial action. Here again, the difference in the nature of the legal questions presented, referred to above in the discussion of the application of the second standard, becomes important. In the arbitration of the grievance, there was no particular reason for pursuing the question of whether the employer was motivated by what it learned from police and prosecutorial offices as opposed to what it learned from talking to the employee's wife and to the employee. Even if the opportunity was present to do so, there was no incentive to do so, because that question was not directly relevant to the issue of whether there was "just cause" for the discharge of the employee. This is an individual circumstance that would make it unfair to treat the arbitration award as being so preclusive on that question that the complainant is not even allowed an opportunity for hearing.
For the foregoing reasons, the commission believes there is reason to be hesitant about giving "issue preclusion" effect to a grievance arbitration award in a subsequent litigation of an employment discrimination claim. Seeman is less than fully persuasive on this point, because it does not reflect consideration and application of the "fundamental fairness" standards which the commission has more recently recognized as applicable to the question of whether to apply issue preclusion. The commission believes that the better approach is to "accord [the arbitration award] such weight as may be appropriate under the facts and circumstances of each case", Krueger v. Dept. of Transportation; Alexander v. Gardner Denver.
As noted above, the ALJ concluded that the arbitration award was conclusive as to certain factual issues, including the issues necessary to decide whether an Onalaska defense had been made out. To evaluate the correctness of this conclusion, it is necessary to consider the precise nature of that defense and the facts which are needed to establish it.
The Onalaska defense --
Within only a few years of the enactment of the prohibition against discrimination because of arrest or conviction record, the Court of Appeals carved out a significant exception to that prohibition. In City of Onalaska v. LIRC, 120 Wis. 2d 363, 354 N.W.2d 223 (Ct. App. 1984), the court held:
To discharge an employe because of information indicating that the employe has been questioned by a law enforcement or military authority is to rely on an assertion by another person or entity. If, as here, 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, the employer does not rely on information indicating that the employe has been questioned, and therefore does not rely on an arrest record, as defined in [the WFEA].
120 Wis. 2d at 367.
Over the years since the Onalaska decision was issued, it has served as the rationale behind a number of decisions finding no arrest record discrimination in cases where an employer discharged or otherwise acted against an employee after learning that the employee had been arrested. (2) However, there have also been cases in which arguments attempting to invoke the Onalaska rule have been rejected based on a conclusion that the decision was based on the fact of the arrest, not because of an alleged independent investigation. (3)
These decisions have exhibited some variability with respect to the question of how "independent" the employer's investigation needs to be.
Some decisions have held that the investigation must be independent of the arresting authority, that is, that the employer must act on the basis of information obtained from sources other than the arresting authority. The source most often recognized as being sufficient to justify a conclusion that the decision was made because of information learned in an independent investigation is an admission by the employee to the employer. Indeed, in Mielke v. Orkin Exterminator Co. (LIRC, 04/11/88), the commission stated, "City of Onalaska requires an employer to question an individual and to ascertain whether the individual has committed the offense". This focus on the employer's interview with the employee and the employee's admissions to the employer can also be seen in Himmel v. Copps Corp. (LIRC, 10/29/86), McClellan v. Burns Int'l. Security (LIRC, 03/31/88), and Lamb v. Happy Chef of Sparta (LIRC, 09/29/95). In addition to an admission from the employee to the employer, information the employer obtains from others, such as crime victims or relatives of crime victims, see Redmon v. Department of City Development (LIRC, 02/22/90), or other persons involved in the commission of the crime, see Himmel, can also serve as an independent basis upon which an employer concludes that the employee engaged in unacceptable conduct.
In its decision in Delapast v. Northwoods Beach Home Caring Homes (LIRC, 02/17/93), the commission summarized what could be considered "independent" sources of information for an employer to form a belief that an employee engaged in an offense of some kind which is also the subject of the employee's arrest:
[A]n employer's decision to discharge is not because of the arrest when it is motivated by the employer's belief that the employe has in fact engaged in certain unacceptable conduct and when that belief arises from some source other than the mere fact of the arrest. Onalaska v. LIRC, 120 Wis. 2d 363, 367, 354 N.W.2d 223 (Ct. App. 1984). That source may be an admission by the employe, see, e.g., Levanduski v. Visiting Nurses Association (LIRC, February 10, 1988), or statements to the employer by others who witnessed the conduct, Redmon v. Milwaukee (LIRC, February 22, 1990), or direct observation made by the employer while joining in a police search, Seever v. Catholic Charities Bureau (LIRC, September 20, 1990), or an investigation by the employer that made use of information obtained from a contemporaneous police investigation, Williams v. Northeast Wisconsin Technical College (LIRC, July 9, 1991). (4)
The commission adhered to this formulation of what constituted sufficiently "independent" sources of information in Greene v. Air Wisconsin (LIRC, 02/02/95). In that decision, the commission found the Onalaska rule applicable because the information that formed the basis for the employer's conclusion that the employee had engaged in unacceptable behaviors had been acquired from communications directly from the employe to the employer which were "independent of the arrest and of the arresting authorities".
However, the commission has issued two decisions applying Onalaska which appear to take a different tack. Ponto v. Grand Geneva Resort and Spa (LIRC, 08/22/96), Springer v. Town of Madison (LIRC, 09/22/87). In Ponto, the information which led the employer to decide to discharge the employee was two newspaper articles that were simply repeating information which had come from the criminal complaint and from the police department; the first article simply reported that the employee had been arrested for sexual assault of a child, and the second article reported that the criminal complaint alleged that the employee had admitted the conduct involved. The investigation in Springer consisted of the employer getting information about the charged offense from the arresting authority, and conducting an interview with the employee in which he did not make any admissions. It appears that in these cases, the information which the employer relied on to draw its conclusion that the employee engaged in unacceptable conduct was information that came from the arresting authority.
Insofar as they are inconsistent with the approach described and followed in Delapast and Greene, the commission chooses not to be guided by Ponto and Springer. As the Onalaska decision notes, under the WFEA the term "arrest record" includes, but is not limited to, "information indicating that a person 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". Things such as police reports from the arresting authority, the criminal complaint, and statements made by or other information provided by the arresting or prosecuting authority, are all part and parcel of the "arrest record" itself. The approach described in Delapast and Greene, pursuant to which the question to be resolved is whether the employer's conclusion that the employee had engaged in unacceptable behaviors was based on information "independent of the arrest and of the arresting authorities", is in the commission's view the proper approach.
The ALJ's conclusion that the arbitration award findings established an Onalaska defense --
In essence, the ALJ here concluded not merely that the factual findings made by the arbitrator established an Onalaska defense, but also that they did so in such a conclusive manner that it could not have been called into question by any other evidence that the complainant might have introduced - and thus, that no hearing was needed. Looking at the findings of fact made by the arbitrator, the commission does not believe that they establish an Onalaska defense so conclusively that a hearing was unnecessary.
The arbitration award reflects the following findings made by the arbitrator:
The employee had a history (dating back to 1992 and again in 1994) with the employer of performance problems which led the employer to determine that he had problems with alcohol and drug abuse. The employer had worked with him to try to get him to address these problems. The employee was arrested in Menomonee County on drug charges in December, 2001. He was arrested in Arkansas on felony drug charges in March, 2002. The employer first learned of the complainant's two arrests only in July, 2002, when the employee's supervisor was having a conversation with the employee's wife, and she told him about the arrests. At this time, she also told him that the employee had been using cocaine and marijuana, that she had recently seen him smoking marijuana, and that he had been lying to the employer about using sick leave for counseling sessions when in fact he had been using it to attend court proceedings relating to his arrests. After the employer learned of these things from the employee's wife, it then investigated the matter. However, the investigation described by the arbitrator involved talking to prosecutors and officers in Menomonee County and Arkansas and obtaining copies of the arresting officer's reports and other documents. These are the types of contacts that have been held, and that should be held, to not be an "independent" investigation as contemplated by the Onalaska rule. The employer's investigation continued with a meeting between the employer and the employee. As found by the arbitrator, in this meeting the employee asserted that he had been going to marriage counseling on one day when (the employer knew by this time) the employee had in fact been appearing in court on one of the drug charges, acknowledged having used cocaine, denied having used marijuana for years, and denied having ever been in Arkansas but then conceded that he had when the arrest there was brought up.
Accepting the facts found by the arbitrator, it is clear that the employer became aware of a number of things which could have led to its decision to discharge the complainant. Some of these things it learned through the kinds of processes that would be considered an "independent" investigation for purposes of the Onalaska rule - that is, through direct interviews with the employee himself and with others who had personal knowledge of conduct by the employee, such as his wife. However, the employer also drew much of its information from the police and prosecutorial sources involved with the arrest; consistent with the approach described and followed in Delapast and Greene, as discussed above, this should not be considered to have been information acquired independent of the arrest.
The critical question which needs to be answered to properly apply Onalaska in a case where an employer has both learned of and about an employee's arrest from the arresting authorities, and has learned things about the employee's conduct independently of the arresting authorities, is the question of the employer's motivation. Mielke v. Orkin (LIRC, April 11, 1988). The question is whether the employer made the decision to discharge the employee because of the information it acquired from the arrest and the arresting authorities, or because of the information it acquired through its own investigation independent of the arresting authorities. This being a question of the employer's subjective intent and motivation in arriving at the challenged decision, it is a question of ultimate fact. See, e.g., Mielke, supra, citing Pullman-Standard v. Swint, 456 U.S. 372, 289-90 (1982); St. Joseph's Hospital v. Wis. E. R. Board, 264 Wis. 396, 401, 59 N.W.2d 448 (1953); Novick v. ABQC Corp. (LIRC, Feb. 26, 1997), citing Gauger v. Hardtke, 167 Wis. 2d 504, 516-17, 482 N.W.2d 84 (1992) (general rule is that the subjective intent of an individual is an ultimate question of fact to be determined by the trier of fact).
Significantly, the arbitrator did not address or decide that question. This is not surprising; it was simply not relevant given the nature of the legal issue before him and the posture of the case at that time.
Furthermore, the facts which were found by the arbitrator as to what the employer knew about the employee's conduct and how it knew those things (that is, what it learned from the arresting authorities compared to what it learned through independent sources) do not require, and arguably do not even allow, a conclusive finding to be made on the critical question of the employer's intent. The commission has recognized that simply because an employer which knows of an employee's arrest has also obtained some information about an employee's conduct from independent sources, does not necessarily mean that a subsequent adverse employment decision is taken because of what the employer learned independently.
In Gustafson v. C.J.W., Inc. (LIRC, 03/21/89), the employer learned of the employee's arrest for driving under the influence of alcohol, but it also learned directly through an admission by the employee, that he indeed had been driving drunk. This was a matter of understandable concern to the employer, a liquor wholesaler, since the employee's job involved working as a driver, delivering beer and liquor. The commission said:
[I]n any case in which it appears that an employe has told the employer that the employe engaged in the conduct for which the employe was arrested (or convicted), the situation must be analyzed with the Onalaska decision in mind to determine whether the subsequent action taken by the employer was taken because of the employer's belief about what the employe had done based on what the employe said, or because of the arrest or conviction itself. It should not be assumed that in such cases the employer's actions are always because of what the employe told the employer. While it is certainly possible that an employer would decide to take a negative employment action against an employe after finding out that the employe engaged in certain conduct, because of that conduct rather than because of a subsequent arrest, it must be acknowledged that it would also be conceivable that an employer would become aware of certain conduct that an employe engaged in but not care about that conduct, and only be concerned about the fact that the employe had been arrested.
(underlining in original; italics added). In fact, the commission concluded in Gustafson that the employer did not actually care that the employe had been driving drunk on the night of the incident in question, but cared only about the fact that he had been arrested and that an arrest and potentially a conviction would be reported on his driving record, and decided to discharge him for that reason. It thus concluded,
This is therefore not a situation within the rule of Onalaska. The termination was "because of" the arrest record, not "because of" the employer's belief as to what the employe had done.
The commission concludes that the ALJ erred by disposing of this case without a hearing. Even if the arbitration award is given a great deal of weight in terms of the facts, all that it establishes is the facts as to what the employer knew and how it knew it. It does not establish whether the employer's decision was motivated by what it knew through the arrest and the arresting authorities, or what it knew through independent sources. To deny the complainant the opportunity for a hearing was, the commission concludes, an error. For this reason, the commission has set aside the decision and has remanded this matter for hearing on the merits of the complaint.
James R. Macy, Attorney for Respondent
Appealed to Circuit Court. Appeal dismissed February 11, 2005. Appealed to the Court of Appeals. Dismissal of appeal affirmed, sub nom. Kimberly Area Sch. Dist. v. LIRC & Betters, 2005 WI App 262, 707 N.W.2d 872.
[ Search ER Decisions ] - [ ER Decision Digest ] - [ ER Legal Resources ] - [ LIRC Home Page ]
(1)( Back ) Mack v. AFSCME Local 366 (LIRC, July 24, 2002), Bourque v. Wausau Hospital Center (LIRC, April 2, 1992), Local 322, Allied Industrial Workers v. Johnson Controls (LIRC, November 22, 1991), Maguire v. Marquette University (LIRC, August 18, 1988), and Taylor v. St. Michael Hospital (LIRC, May 31, 2001).
(2)( Back ) Ponto v. Grand Geneva Resort and Spa (LIRC, August 22, 1996) (employer discharged employee based on beliefs about employee's conduct and admissions formed from reading newspaper articles which were based on arrest and criminal charge information from the police); Lamb v. Happy Chef of Sparta (LIRC, September 9, 1995) (while employer was aware of arrest, employee also admitted her involvement with selling controlled substances during respondent's investigation, this admission led to complainant's discharge); Greene v. Air Wisconsin (LIRC, February 2, 1995, aff'd. sub nom. Greene v. LIRC, Monroe Co. Cir. Ct., August 25, 1995) (employee admitted to employer he had marijuana in car at time of arrest, employer also knew employe had initially been untruthful about reasons for his inability to report to work after his arrest, no discrimination because these communications directly from the employe to the employer were independent of the arrest and of the arresting authorities); Paxton v. Aurora Health Care (LIRC, October 21, 1993) (employer came to good faith belief based on its investigation, apparently involving interviews with co-workers, that the complainant had committed some type of sexual assault against a co-worker); Delapast v. Northwoods Beach Home Caring Homes (LIRC, February 7, 1993) (employee informed employer she had marijuana on her person, and employer also learned employee entered into a deferred prosecution agreement, which indicates she admitted offense; employer's decision not because of arrest when motivated by the employer's belief that the employe has in fact engaged in certain unacceptable conduct and when that belief arises from some source other than the mere fact of the arrest); Redmon v. Department of City Development (LIRC, February 22, 1990) (employer learned information about employee's conduct by investigation in which it spoke with victim of crime and victim's brother; since decision based on what employer believed about facts of the incidents through its own investigation, no violation of arrest record discrimination); Levanduski v. LIRC (Sheboygan Co. Cir. Ct., September 15, 1988) (employe, after having been arrested for unlawful damage to property in connection with a domestic disturbance at her home, admitted to her employer that she had engaged in the violent conduct in question, and employer verified her admission by looking at the police report; termination not because of arrest record but because of the employer's beliefs about the Complainant's conduct); Springer v. Town of Madison (LIRC, September 22, 1987, aff'd., Jefferson Co. Cir. Ct., June 13, 1988) (employer obtained citation, accident report and other reports which the Sheriff's Department had concerning the incident, and then interviewed the employee, who the employer believed did not adequately explain the incident); Mielke v. Orkin Exterminator Co. (LIRC, April 11, 1988) (after learning of employee's arrest through the newspaper, employer asked employee about it; employee gave employer a copy of the police report and criminal complaint and also told the employer that the allegations in the criminal complaint were true); McClellan v. Burns Int'l. Security (LIRC, March 31, 1988) (after finding out about his arrest and subsequent conviction (on no contest plea) for possession of marijuana, employer learned more about employee's illegal conduct by way of oral and written statements from him admitting to the possession and also use of marijuana during off-duty hours); Himmel v. Copps Corp. (LIRC, October 29, 1986) (employer learned of employee's illegal conduct through information provided to it by a co-worker of the employee who had also been involved, by questioning the employee himself, who admitted to the conduct).
(3)( Back ) Garton v. Wal-Mart Stores (LIRC, January 27, 2000), aff'd sub nom. Wal-Mart Stores v. LIRC (Dane Co. Cir. Ct., August 21, 2000) (Onalaska defense not available where employee's statements to employer were not admission of conduct, and employer simply assumed employee was guilty of possessing illegal drugs in violation of company policy, based entirely on the fact of her arrest record); Maline v. Wisconsin Bell (LIRC, October 30, 1989) (Onalaska rule not applicable where sole basis for employer's belief that Maline had engaged in the misconduct in question was its awareness that he had been arrested on a charge of engaging in such conduct); Gustafson v. C.J.W., Inc. (LIRC, March 21, 1989) (employer learned of arrest from employee, who told it he had been driving while drunk, had been in an accident, and had been arrested for DUI; discharge was because of arrest record, rather than employer's beliefs about employee's conduct, where employer stated discharge was because it did not want anyone working for it who had a "driving while intoxicated" offense on his record).
(4)( Back ) In Seever, the employee was a live-in resident manager of a group home, and when the employer admitted the police to the employee's residence so they could execute a search warrant, the employer discovered a number of unacceptable conditions and circumstances (mishandled files, dangerous and unhealthy items such as weapons and ammunition and improper storage of food items), not connected to the matter the police were investigating, which formed the basis for the employer's decision to discharge the employee. In Williams, the employer first learned of possible financial misconduct by the employee from the police when they contacted the employer in the course of their investigation, but the employer thereafter conducted its own internal investigation separate and apart from the criminal investigation, in which the employer checked its own internal financial records and interviewed its own employees about the employee's handling of checking account.