Vol. 73, No. 7, July 2000
Hausman Eliminates Wrongful
Discharge for Protecting Public Policy
by Carol N. Skinner
Employer advocates may argue that Hausman was decided
the way it was merely because the facts of the case were so egregious
that a remedy had to be fashioned to address the plaintiffs'
specific problem. This is an over-simplistic view. What happened
to Jane Hausman and Karen Wright was not a blip on the screen.
Many would-be reporters of abuse or neglect of vulnerable persons,
whether they be the elderly, infirm, incompetent, or children,
face a Hobson's choice. They can come forward with their
concerns and risk retaliation, or remain silent and thus share
in the blame for the unlawful conduct. These reporters may be
employees (including employees from temporary agencies) of facilities
caring for the vulnerable person, the vulnerable person him or
herself, or a friend or relative of that person. Retaliation
can take the form of loss of job and professional standing, as
occurred in Hausman, further abuse, loss of privileges,
demotion, ostracization, and isolation.
Wisconsin Employment Law Includes
Chapter on Employment-at-will
At-will employment, including public policy limitations to
the at-will doctrine, is discussed at length in Wisconsin
Employment Law (State Bar of Wisconsin CLE Books, second
edition, 1998). The 1999 supplement to Chapter 1 of the book
specifically addresses the Wisconsin Supreme Court's decision
in Hausman v. St. Croix Care Center.
For more information or to order Wisconsin Employment Law
(which includes the 1999 supplement), call the State Bar at (800)
728-7788 or visit the online CLE
Hausman was decided as it was because the case illustrated the
real-life problems resulting from the overly restrictive interpretation
of the public policy exception to the employment-at-will rule adopted
by the Wisconsin Supreme Court in 1986 in Bushko v. Miller Brewing
Co.5 Following a well-reasoned opinion
in Brockmeyer v. Dun & Bradstreet, which held that "an
employee has a cause of action for wrongful discharge when the discharge
is contrary to a fundamental and well-defined public policy as evidenced
by existing law," the Bushko court retreated. The plaintiff
in Bushko claimed he was fired for making internal complaints about
plant safety, hazardous waste, and honesty. The employer argued that
it had every right to discharge its employee, as he had no contract
of employment. Obviously troubled by the prospect of every adverse employment
decision being open to court scrutiny, and thus swallowing up the employment-at-will
rule, the Bushko court sought to balance the employer's
and employees' interests. It opted to limit the public policy exception
(and thus an actionable claim for wrongful discharge) to those employees
fired for refusing a command, instruction, or request of the employer
to violate public policy as established in existing law.6
The stated impetus for the Bushko court's restriction
of the public policy exception was to preserve an employer's
right to make personnel decisions unfettered by the possibility
of frivolous lawsuits by disgruntled employees who could seemingly
challenge any adverse employment action merely because they had
engaged in "praiseworthy conduct." The fallacy of this
reasoning stems from a misinterpretation of the balancing act
language of Brockmeyer, which was reiterated by the supreme
court in Hausman:
- "We believe that the adoption of a narrowly circumscribed
public policy exception properly balances the interests of employees,
employers, and the public. Employee job security interests are
safeguarded against employer actions that undermine fundamental
policy preferences. Employers retain sufficient flexibility to
make needed personnel decisions. ... Finally, the public is protected
against frivolous lawsuits, since courts will be able to screen
cases on motions to dismiss for failure to state a claim or for
summary judgment if the discharged employee cannot allege a clear
expression of public policy."7
The problem with Bushko's "balancing act"
is that it goes far beyond the concern of Brockmeyer,
which was that discharged employees be able to allege a clear
expression of public policy or face dismissal of their claim.
In fact, Bushko eliminates many claims where employees
can allege a clear expression of public policy, in favor of employers
"retaining sufficient flexibility to make needed personnel
decisions." This was never the intent of Brockmeyer.
Allowing employers to retain "flexibility to make personnel
decisions" at what cost? Yes, an employer's power to
discipline and discharge employees must certainly be protected,
but not at the cost of public safety. As the concurring opinion
in Bushko pointed out, "The unifying principle of
the Brockmeyer doctrine is that an employer may not use
the power to discharge to undermine a fundamental and well-defined
public policy embodied in the literal language or in the spirit
of a statute or constitutional provision. Not only employees
but also the public would suffer if the discharge power enhanced
the abilities of employers to violate public policy."8
The facts of the Hausman case clearly illustrated that
the Bushko limits were unworkable. Two reporters of suspected
elder abuse were fired for reporting, and yet without remedy.
The tail was now wagging the dog, and many meritorious claims
were falling through the enormous chasms left in the wake of
Bushko. Rather than overruling Bushko, however,
the supreme court carved out an exception to its restrictive
language. Because the plaintiffs in Hausman were bound
by law to take action such as reporting suspected abuse, the
court used that fact to extend protection to the plaintiffs.
It concluded that the public policy exception to the employment-at-will
doctrine may apply beyond the four corners of Bushko:
- "The public policy of protecting nursing home residents
from abuse is fundamental and well-defined. Where the law imposes
an affirmative obligation upon an employee to prevent abuse or
neglect of nursing home residents and the employee fulfills that
obligation by reporting the abuse, an employer's termination
of employment for fulfillment of the legal obligation exposes
the employer to a wrongful termination action."9
The Effects of Hausman
While Hausman was working its way through the court system, various
elder advocacy groups were lobbying for legislative amendments to existing
law to protect vulnerable adults and children by protecting those who
were in a position to ensure their safety, the prospective reporters.
Those efforts were largely successful, and three statutes were changed
to increase that protection. (Please see the accompanying
Although Hausman involved nursing home employees, there
is no reason to limit its holding to this group. Hausman
can be read to protect any employee who is legally obligated
to take action in the public interest, and is fired for doing
so. As the Hausman court pointed out, "The employer's
personnel decisions are not impermissibly interfered with by
a requirement that the employer not retaliate against an employee
complying with the dictates of a fundamental public policy statement."10 Examples include those employees legally
mandated to report not only abuse, but fraudulent practices,
disease control issues, child endangerment, and ethics violations.
Yet, one must ask, did the Hausman court go far enough
in protecting employees who come forward? If an airline employee
is not legally required to report falsified aircraft maintenance
reports, do we want to let his employer fire him for doing so?
How about the meat packer employee who is aware that her employer
is using unsafe handling practices in order to cut costs? The
interest in retaining an employer's "flexibility to
make needed personnel decisions" pales in comparison to
public health and safety issues such as these.
The "floodgate" argument often discussed in the
public policy cases, that every termination will be open to scrutiny,11 is overblown. Courts routinely screen
cases in many areas of law, particularly in the employment arena.
And an employer's intent, that is, whether the adverse decision
was based on the employee's sex, race, age, or other protected
status, is always at issue. Despite this, employers' motions
for summary judgment are granted quite often. Courts can be trusted
to intelligently distinguish between issues of public health
and safety, and issues internal to an employer that do not affect
the public's health or safety. The line of demarcation should
be whether an employee was truly acting in the interest of public
health or safety, not whether there is some little-known law
requiring the employee to take a particular action.
Interestingly, there is a statute that protects whistle-blowing
employees in the public sector, but not those in the private
230.83 of the Wisconsin Statutes prohibits the state from
retaliating or threatening to retaliate against an employee who
discloses certain information to persons such as his/her supervisor,
attorney, collective bargaining agent, or a legislator. The information
disclosed may include information the employee reasonably believes
demonstrates a violation of any state or federal law, rule, or
regulation, as well as mismanagement or abuse of authority in
state or local government, a substantial waste of public funds,
or a danger to public health and safety.
But where are most of the issues concerning public health
and safety going to arise? It is the private sector that
is responsible for producing our automobiles, airplanes, buses,
trains, machines, medical supplies and equipment, pharmaceuticals,
foods, and health care products, as well as providing many services
affecting the public. Section
230.83 is a good start. While it is laudable to protect state
employees who report mismanagement or abuse of authority, there
really are more pressing issues at hand, namely, public safety
in the vast majority of settings, the private sector.
Changes in Practice Resulting from Hausman
N. Skinner, Indiana University - Bloomington 1984, has been a shareholder
with Bakke Norman S.C., New Richmond, since 1990. She limits her
practice almost exclusively to employment law, representing employees
and employers. She also serves on the board of the State Bar's
Labor and Employment Law Section, has presented programs to employers'
associations and the State Bar on employment topics, and is a member
of the Wisconsin and National Employment Lawyers' Associations.
Employment law practitioners must consider this expansion
of the public policy exception to the employment-at-will doctrine,
as well as the statutory changes protecting employees and others,
whether representing prospective plaintiffs or employers. Employers
need to be advised that nonemployees who report abuse also are
protected from retaliation. This includes individuals from temporary
employment agencies and independent contractors. Agencies administering
discrimination claims (the Equal Rights Division and the Personnel
Commission) must be aware that their jurisdictions have been
increased. Obviously, more employees will have wrongful discharge
claims, at least until employers become aware that they may not
retaliate against an employee for doing something he or she is
legally obliged to do.
The result does not have to be a win for employees and a loss
for employers. Adequately educating employers about common law
wrongful discharge, as well as the statutory changes relating
to retaliation for reporting, can bring about the desired outcome
for everyone. Eliminating wrongful discharges of employees for
protecting public policy is a win-win situation. The public policy
is promoted, not thwarted; the employee is not fired; and the
employer is not sued. The Hausman decision is just one
step closer to justice for all.
1 Hausman and Wright v. LIRC,
Case Nos. 96-CV-797 and 798, (Dane County Cir. Ct., May 6, 1997)
affirming LIRC's March 7, 1996, decision.
2 Brockmeyer v. Dun & Bradstreet,
113 Wis. 2d 561, 335 N.W.2d 834 (1983).
3 Jane Hausman and Karen Wright
v. St. Croix Care Center, 207 Wis. 2d 400, 558 N.W.2d 893
(Ct. App. 1996).
Hausman and Karen Wright v. St. Croix Care Center, 214
Wis. 2d 655, 571 N.W.2d 393 (1997).
5 Bushko v. Miller Brewing Co.,
134 Wis. 2d 136, 396 N.W.2d 167 (1986).
6 Id. at 142, 396 N.W.2d
7 Brockmeyer, 113 Wis. 2d
at 574, 335 N.W.2d at 841; Hausman,
214 Wis. 2d at 667, 571 N.W.2d at 398. (Emphasis added.)
8 Bushko, 134 Wis. 2d at
157, 396 N.W.2d at 177 (Abrahamson, S., concurring, joined by
Bablitch, W. and Heffernan, N.).
214 Wis. 2d at 669, 571 N.W.2d at 399.
at 668, 571 N.W.2d at 399.
11 See, e.g., Brockmeyer,
113 Wis. 2d at 569, 335 N.W.2d at 839; Bushko, 134 Wis.
2d at 146, 396 N.W.2d at 173; Hausman,
214 Wis. 2d at 667, 571 N.W.2d at 399; Wandry v. Bulls Eye
Credit Union, 129 Wis. 2d 37, 54-55, 384 N.W.2d 167,179 (1986)
(Steinmetz, J. dissenting).
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