Brockmeyer v. Dun & Bradstreet

• Decision Date: 01 July 1983
• Docket Number: No. 81-2024,81-2024
• Citation: 113 Wis.2d 561,335 N.W.2d 834
• Parties: , 115 L.R.R.M. (BNA) 4484, 98 Lab.Cas. P 55,398 Charles J. BROCKMEYER, Plaintiff-Respondent and Cross-Appellant-Petitioner, v. DUN & BRADSTREET, a foreign corporation with registered agent being C.T. Corporation System, Defendant-Appellant and Cross-Respondent.
• Court: Wisconsin Supreme Court

Page 834

335 N.W.2d 834

113 Wis.2d 561, 115 L.R.R.M. (BNA) 4484,

98 Lab.Cas. P 55,398

Charles J. BROCKMEYER, Plaintiff-Respondent and Cross-Appellant-Petitioner, v. DUN & BRADSTREET, a foreign corporation with registered

agent being C.T. Corporation System,

Defendant-Appellant and Cross-Respondent.

No. 81-2024.

Supreme Court of Wisconsin.

Argued June 1, 1983.

Decided July 1, 1983.

Kent C. Jones, Milwaukee, argued for respondent and cross-appellant-petitioner; Cape & Jones, Milwaukee, on brief.

Reuben W. Peterson, Jr., Milwaukee, argued for defendant-appellant and cross-respondent; Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee, on brief.

John R. Sapp, Thomas W. Scrivner and Michael, Best & Friedrich, Milwaukee, amicus curiae for The Wisconsin Ass'n of Mfrs. & Commerce.

Kenan J. Kersten, Randall E. Reinhardt and Kersten & McKinnon, Milwaukee, amicus curiae for The Wisconsin Academy of Trial Lawyers.

STEINMETZ, Justice.

The principal issue on appeal is whether Wisconsin has any judicial exceptions to the employment at will doctrine. ¹ We hold that in certain limited circumstances as discussed below, there are exceptions.

I.

This is a review of the court of appeals decision reversing the circuit court for Milwaukee county, the Honorable Ralph G. Gorenstein. The plaintiff, Charles J. Brockmeyer, began his employment with Dun & Bradstreet in August, 1969, as a business analyst trainee. From June, 1977, until his termination in May, 1980, he held a management position as district manager of the credit services division for the State of Wisconsin. Brockmeyer had no contract of employment.

Brockmeyer's career with Dun & Bradstreet as a district manager could be characterized as erratic. For a time in 1978, he was on employment probation. By improving his performance, Brockmeyer removed himself from probation. His sales ability potential was considered quite good. His income production was above average, but nevertheless, his superiors in Chicago were not satisfied with the performance of his other duties as a manager.

The events of the weekend of February 16, 1980, caused his immediate superiors some concern. They were informed that Brockmeyer, who was married but separated, was vacationing in Montana with his secretary when it was believed that he was performing his normal duties as district manager. Additional inquiries revealed that Brockmeyer had also smoked marijuana in the presence of company personnel. Supervisory personnel in Chicago sought permission from the national office to terminate or reassign Brockmeyer should they receive verification of these reports. Because of Brockmeyer's above average performance record, permission for termination or reassignment was denied. Instead, the supervisory personnel were directed to confront Brockmeyer with the information received to resolve the problem. Brockmeyer was called to a meeting in Chicago for this purpose. At that meeting he acknowledged the relationship with his secretary. He apologized for his absenteeism without notice. He admitted smoking marijuana and promised not to do it again. It was suggested at this meeting that either Brockmeyer or his secretary consider a job in another division of Dun & Bradstreet. At the conclusion of the meeting, Brockmeyer was firmly told that he would be terminated or reassigned if existing conditions did not improve.

Brockmeyer attempted to find a position for his secretary within the company, but was unsuccessful. The Chicago office then told him that the only remaining alternative was to obtain her resignation. Her resignation was received on February 25, 1980.

Shortly thereafter, Brockmeyer's former secretary filed a sex discrimination claim against Dun & Bradstreet. In May, 1980, on a variety of separate occasions, Brockmeyer was asked by his superiors to submit a written report about the course of events which led to her resignation. Brockmeyer refused because he feared he would become Dun & Bradstreet's scapegoat for the alleged discrimination actions taken against his former secretary. He also indicated that if called to testify at a hearing or trial, he would tell the truth.

On May 27, Dun & Bradstreet settled the claim with Brockmeyer's former secretary for $12,000. Three days later, Brockmeyer was discharged. At the time of the discharge, he was offered $8,500 if he would sign a release agreeing not to sue Dun & Bradstreet. Brockmeyer refused the offer.

Brockmeyer then initiated this action alleging that he was wrongfully discharged. He also requested damages for intentional infliction of emotional harm. Dun & Bradstreet claimed that Brockmeyer was terminated for: (1) smoking marijuana in front of employees; (2) lack of attention to job duties; (3) an open affair with his secretary; and (4) low morale among employees in his office.

At trial the jury was instructed that a terminated employee can recover damages from his or her employer "where the discharge violates some clear and specific public policies or where the discharge is retaliatory or is motivated by bad faith or malice." The jury found that Dun & Bradstreet had wrongfully discharged Brockmeyer and awarded him $250,000 in compensatory damages and $250,000 in punitive damages. The jury rejected Brockmeyer's claim for intentional infliction of emotional harm.

On appeal, the court of appeals held that: "Recovery will be permitted if termination offends clearly defined public policy, or results from the exercise of bad faith, or results from malicious or retaliatory activity on the part of the employer." 109 Wis.2d 44, 46-47, 325 N.W.2d 70 (Ct.App.1982). However, the court reversed the judgment and remanded the case with instructions to dismiss the complaint on the merits because the record contained insufficient evidence to sustain Brockmeyer's claim that he was wrongfully discharged. For the reasons explained below, neither the trial court nor the court of appeals applied the proper law.

II.

Under English common law, an employment contract for an indefinite period was presumed to extend for one year unless there was reasonable cause to discharge. ² The English rule had evolved from the Statute of Labourers, which provided that "no master can put away his servant." Early American courts followed this approach. In the late nineteenth century, apparently influenced by the laissez-faire climate of the Industrial Revolution, the American courts then rejected the English rule and developed their own common-law rule, the employment at will doctrine. ³ The doctrine recognized that where an employment was for an indefinite term, an employer may discharge an employee "for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong." ⁴

By the turn of the twentieth century, the at will doctrine was absolute and was even temporarily afforded constitutional protection. ⁵ However, since the New Deal, government regulation in the workplace has increased dramatically as Congress and state legislatures recognized the need to curb harsh applications and abuse of the rule in an effort to stabilize labor relations.

Statutory modification of the at will doctrine can be found in a variety of federal and state laws prohibiting certain forms of discrimination. Both Title VII of the Civil Rights Act of 1964 ⁶ and Wisconsin's Fair Employment Act, secs. 111.31-111.395, Stats., make it unlawful for an employer to discharge an employee because of race, color, religion, sex or national origin. ⁷ Similarly, the National Labor Relations Act ⁸ and the Wisconsin Employment Peace Act, sec. 111.06(1)(c)1, prevent discharges for union activities. Other forms of discriminatory discharges have also been prohibited by the legislature. ⁹

Consistent with the philosophy of the statutory modifications, many state courts have recognized the need to protect workers who are wrongfully discharged under circumstances not covered by any legislation or whose job security is not safeguarded by a collective bargaining agreement or civil service regulations. The courts have accomplished this objective by modifying the at will doctrine. The courts have recognized both contract and tort actions under assorted legal theories. Two theories are often utilized by the courts. The adoption of either theory or both theories is urged by Brockmeyer.

The first, and the more expansive of the two theories, is imposing upon an employer an implied duty to terminate an employee only in good faith. Two cases frequently cited for this theory are Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974) and Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977). In Monge, a female employee was terminated because she refused to date her foreman. In Fortune, a salesman was discharged to avoid payment of commissions. Both courts held that the employment contract contained an implied covenant of good faith and fair dealing and that a discharge made in bad faith constituted a breach.

We refuse to impose a duty to terminate in good faith into employment contracts. To do so would "subject each discharge to judicial incursions into the amorphous concept of bad faith." Parnar v. Americana Hotels, Inc., Haw., 652 P.2d 625, 629 (1982). Moreover, we feel it unnecessary and unwarranted for the courts to become arbiters of any termination that may have a tinge of bad faith attached. Imposing a good faith duty to terminate would unduly restrict an employer's discretion in managing the work force.

The second, and more popular of the two theories, is widely known as the "public policy exception." This theory allows the discharged employee to recover if the termination violates a well-established and important public policy.

The leading case on the public policy exception is Petermann v. Teamsters Local 396, 174 Cal.App.2d 184, 344 P.2d 25 (1959). In Petermann, the employee was instructed by the defendant to commit perjury before a...