Hausman v. St. Croix Care Center, 96-0866

• Decision Date: 19 December 1997
• Docket Number: No. 96-0866,96-0866
• Citation: 214 Wis.2d 655,571 N.W.2d 393
• Parties: , 135 Lab.Cas. P 58,420, 13 IER Cases 995 Jane HAUSMAN and Karen Wright, Plaintiffs-Appellants-Petitioners, v. ST. CROIX CARE CENTER, Defendant-Respondent.
• Court: Wisconsin Supreme Court

Page 393

571 N.W.2d 393

214 Wis.2d 655, 135 Lab.Cas. P 58,420,

13 IER Cases 995

Jane HAUSMAN and Karen Wright, Plaintiffs-Appellants-Petitioners, v. ST. CROIX CARE CENTER, Defendant-Respondent.

No. 96-0866.

Supreme Court of Wisconsin.

Argued Oct. 8, 1997.

Decided Dec. 19, 1997.

For the plaintiffs-appellants-petitioners there were briefs by Carol N. Skinner, Peter M. Reinhardt and Bakke Norman, S.C., New Richmond and oral argument by Carol N. Skinner.

For the defendants-respondents there was a brief by Maureen A. Molony, John M. Loomis, Katherine L. Williams, and Beck, Chaet, Loomis, Molony & Bamberger, S.C., Milwaukee and oral argument by Katherine L. Williams.

Amicus curiae brief was filed by William P. Donaldson for the Wisconsin Board on Aging and Long Term Care, Madison.

Amicus curiae was filed by Betsy J. Abramson for the Elder Law Center of the Coalition of Wisconsin Aging Groups, Madison.

Amicus curiae was filed by Timothy G. Costello, Mark A. Johnson, and Krukowski & Costello, S.C., Milwaukee for the Wisconsin Manufacturers & Commerce.

¶1 ANN WALSH BRADLEY, Justice

Plaintiffs Jane Hausman and Karen Wright seek review of a published court of appeals' decision affirming a circuit court order that dismissed the plaintiffs' suit for failure to state a claim upon which relief could be granted. ¹ The plaintiffs, discharged employees of the defendant, St. Croix Care Center, Inc. (St.Croix), first assert that the facts as alleged conform to the established public policy exception to the employment-at-will doctrine. In the alternative, the plaintiffs ask this court to broaden the public policy exception. The plaintiffs also argue that Wis. Stat. § 50.07(1)(e)(1993-94) ² provides an implied private right of action for retaliatory discharge.

¶2 We reject the plaintiffs' claims that the facts as alleged fit within the existing public policy exception and we decline to adopt a broad whistle-blower exception. However, we recognize that the plaintiffs' compliance with an affirmative legal duty requiring them to take action to prevent abuse or neglect of nursing home residents comports with a well-defined public policy and the rationale of our public policy exception to the employment-at-will doctrine. Accordingly, we apply the public policy exception to the allegations here and conclude that the trial court erred in granting St. Croix's motion to dismiss. Therefore, we reverse the decision of the court of appeals.

¶3 St. Croix, a private nursing home facility in St. Croix County, Wisconsin, employed the plaintiffs, Jane Hausman and Karen Wright. , a licensed nurse, worked as St. Croix's Resident Care Coordinator, while Hausman, a licensed social worker, was the Director of Social Services at St. Croix. Both women were also members of a five-person interdisciplinary care team at St. Croix charged with ensuring that St. Croix provided appropriate and sufficient care to its residents.

¶4 In late 1992, Hausman, Wright, and two other members of the care team became concerned that certain residents of St. Croix's nursing home were not receiving appropriate care. These concerns included: patients falling from beds and suffering injuries, staff members failing to respond to residents' calls for help, disrespectful treatment of patients, improper diets, and a failure by St. Croix to investigate injuries to residents. Hausman and Wright approached St. Croix's director of nursing, also a member of the interdisciplinary care team, about these concerns. ³ No action was taken.

¶5 Undeterred by the nursing home's lack of reaction, Hausman and Wright approached St. Croix's administrators in 1993. Once again, St. Croix failed to act to alleviate Hausman and Wright's fears of abuse and neglect. Hausman and Wright then moved beyond filing internal complaints. Instead, the plaintiffs contacted the Regional Ombudsman, the state officer entrusted by statute with the duty of identifying, investigating, and resolving complaints made by or on behalf of providers of nursing home care. ⁴ After an investigation, the Regional Ombudsman concluded that "areas of concern" existed at St. Croix. Hausman asked the Regional Ombudsman to request an investigation of St. Croix by the Bureau of Quality Compliance. Hausman also contacted the relatives of some of St. Croix's residents and ultimately approached St. Croix's Board of Directors.

¶6 The Bureau of Quality Compliance investigated St. Croix's facilities beginning in July 1993. The Bureau concluded its investigation without issuing any citations, and without interviewing any of the four members of the interdisciplinary team who brought forward concerns of alleged abuse or neglect. The Board of Directors of St. Croix also took no action to address the plaintiffs' concerns.

¶7 St. Croix suspended Hausman in late June 1993, pending investigation of a disciplinary matter involving a nursing assistant. She was terminated by St. Croix two weeks later, allegedly for unprofessional conduct and breach of confidence. She was never interviewed about the disciplinary matter. St. Croix also terminated Wright three months later, on ten minutes notice, claiming budgetary constraints.

¶8 Hausman and Wright filed suit in the circuit court, alleging a private right of action under Wis. Stat. § 50.07, ⁵ wrongful termination through breach of public policy, negligent misrepresentation, and strict responsibility for misrepresentation. The circuit court dismissed the plaintiffs' suit for failure to state a claim upon which relief could be granted. ⁶

¶9 The plaintiffs appealed. Affirming the circuit court, the court of appeals held that a private right of action does not exist under Wis. Stat. § 50.07. The court of appeals also held that the facts as alleged by the plaintiffs did not meet the requirements of Wisconsin's established wrongful discharge public policy exception and that it lacked the authority to apply the public policy exception to the plaintiffs' wrongful termination claim. Finally the court of appeals held that the plaintiffs' allegations did not state a claim for misrepresentation. ⁷

¶10 Dismissal for failure to state a claim is a question of law which we determine de novo. See Watts v. Watts, 137 Wis.2d 506, 512, 405 N.W.2d 303 (1987). In conducting our analysis, we must accept as true the facts alleged in the complaint as well as all reasonable inferences to be drawn from those facts. See id. Accordingly, for purposes of our review, we accept as true the plaintiffs' allegations that they were terminated in retaliation for reporting their suspicions of abuse to the Regional Ombudsman. Since the complaint is to be liberally construed, we may dismiss the claim only if it is "quite clear that under no conditions can the plaintiff recover." Evans v. Cameron, 121 Wis.2d 421, 426, 360 N.W.2d 25 (1985).

¶11 The question of whether compliance with an affirmative legal command that causes an employee to report abuse of nursing home residents constitutes an exception to the employment-at-will doctrine is one which this court has not previously faced. To resolve this issue, we must reexamine the employment-at-will doctrine, survey the breadth of the narrow public policy exception to the doctrine, and determine whether the case at hand falls within its requirements. In the event that it does not, we must consider whether applying the public policy exception to include individuals who comply with a legal obligation to prevent abuse of nursing home residents by reporting certain information comports with our prior case law.

¶12 The employment-at-will doctrine is an established general tenet of workplace relations in this jurisdiction. See Prentiss v. Ledyard, 28 Wis. 131, 133 (1871); Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834 (1983). Where applicable, the doctrine generally allows an employer to discharge an employee "for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong." Brockmeyer, 113 Wis.2d at 567, 335 N.W.2d 834.

¶13 However, the right to summarily fire an employee is not all-pervasive. In the past we have recognized that there are instances in which application of the employment-at-will rule would lead to injustice. "A wrongful discharge is actionable when the termination clearly contravenes the public welfare and gravely violates paramount requirements of public interest." Id. at 573, 335 N.W.2d 834. Accordingly, "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." Id.; see also Wis. J.I.-Civil 2750.

¶14 The Brockmeyer court discovered such fundamental and well-defined public policy in constitutional and statutory provisions. See Brockmeyer, 113 Wis.2d at 573, 335 N.W.2d 834. However, public policy statements that give rise to a wrongful termination action do not arise solely from explicit constitutional or legislative statements. In Wandry v. Bull's Eye Credit Union, 129 Wis.2d 37, 384 N.W.2d 325 (1986), we acknowledged that a plaintiff could find public policy foundations for a wrongful termination suit in "the spirit as well as the letter" of constitutional and legislative provisions. Winkelman v. Beloit Memorial Hosp., 168 Wis.2d 12, 21, 483 N.W.2d 211 (1992)(discussing Wandry ). Moreover, in Winkelman, we determined that public policy could also be evinced by an administrative rule.

¶15 Cognizant of the far reaching implications of holding that an employee's termination for acting in accordance with general public policy was actionable under the wrongful discharge doctrine, we expressly limited the scope of the policy exception to the employment-at-will doctrine in Bushko v. Miller Brewing Co., 134 Wis.2d 136, 396 N.W.2d 167 (1986). In Bushko we concluded that a discharge of an at-will employee only invokes the public policy exception where the employee is terminated for refusing a command,...