Strozinsky v. School Dist. of Brown Deer

• Decision Date: 12 July 2000
• Docket Number: No. 98-0454.,98-0454.
• Parties: Cathy STROZINSKY, Plaintiff-Appellant, v. SCHOOL DISTRICT OF BROWN DEER, Defendant-Respondent-Petitioner.
• Court: Wisconsin Supreme Court

237 Wis.2d 19

2000 WI 97

614 N.W.2d 443

Cathy STROZINSKY, Plaintiff-Appellant, v. SCHOOL DISTRICT OF BROWN DEER, Defendant-Respondent-Petitioner.

No. 98-0454.

Supreme Court of Wisconsin.

Oral argument March 2, 2000.

Decided July 12, 2000.

For the defendant-respondent-petitioner, there were briefs by M. Elizabeth O'Neill and Whyte Hirschboeck Dudek, S.C., Milwaukee, and oral argument by M. Elizabeth O'Neill.

For the plaintiff-appellant, there was a brief by Alan C. Olson, Robert M. Mihelich and Alan C. Olson & Associates, S.C., New Berlin, and oral argument by Alan C. Olson.

¶ 1. DAVID T. PROSSER, J.

The School District of Brown Deer (the District) seeks review of an unpublished decision of the court of appeals.¹ The court of appeals reversed a decision of the Circuit Court for Milwaukee County, John F. Foley, Judge. The circuit court granted summary judgment to the District, holding that the wrongful discharge claim of Cathy Strozinsky (Strozinsky) was not actionable because Strozinsky did not satisfy the public policy exception to the employment-at-will doctrine. The circuit court, however, urged Strozinsky to proceed on an alternative theory, constructive discharge.

¶ 2. Strozinsky resigned from her position as payroll clerk in the District's central office after she and her supervisors disagreed about the tax withholdings from a bonus check. Strozinsky filed a wrongful discharge claim, contending that the District had forced her to resign because of her efforts to comply with the public policy reflected in Wis. Stat. § 943.39² and federal tax laws.

¶ 3. After the circuit court granted summary judgment to the District, Strozinsky submitted a motion for reconsideration. The circuit court, Christopher R. Foley, Judge, denied the motion for the wrongful discharge claim. The court also found that Strozinsky could not pursue a constructive discharge claim because constructive discharge is not actionable as a distinct cause of action and offers relief only when raised in conjunction with an underlying theory of recovery. The court therefore granted the District's motion to dismiss the case.

¶ 4. The court of appeals reversed. The court did not expressly address whether the constructive discharge doctrine applies to common-law claims filed under the narrow public policy exception to the rule of employment-at-will established in Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 335 N.W.2d 834 (1983). The court applied the doctrine, holding that a jury should decide the question "whether the conditions at Strozinsky's workplace were so intolerable that a reasonable person would be forced to resign." Strozinsky v. School Dist. of Brown Deer, No. 98-0454, unpublished slip opinion at 8 (Wis. Ct. App. May 18, 1999) (per curiam). The court also found that Strozinsky set forth questions of fact about whether her attempts to comply with the Internal Revenue Code created intolerable working conditions that triggered a discharge in violation of public policy. Id. ¶ 5. We frame two issues in this case. First, we address whether Strozinsky identified a fundamental and well defined public policy sufficient to meet the narrow cause of action for wrongful discharge under the public policy exception to the general rule of employment-at-will first recognized by this court in Brockmeyer, 113 Wis. 2d 561. Second, we consider whether the constructive discharge doctrine applies to a common-law claim for wrongful discharge under the same exception.

¶ 6. We hold that the wrongful discharge claim is actionable under the narrow public policy exception to the employment-at-will doctrine because Strozinsky identified a fundamental and well defined public policy in the provisions of Wis. Stat. § 943.39(1) and 26 U.S.C. §§ 3101, 3102, and 6672(a). The granting of the District's summary judgment motion was therefore inappropriate. Our approach to this first issue differs from that of the court of appeals because we conclude that whether a plaintiff identifies a public policy is a question of law to be decided by the court, not a jury. For the second issue, we agree with the circuit court inasmuch as the constructive discharge doctrine does not present an independent cause of action. We hold, however, that the doctrine of constructive discharge can be applied as a defense in a common-law claim under the public policy exception because some resignations are, in fact, involuntary. In this case a question of fact exists under the constructive discharge standard, namely whether Strozinsky's working conditions were so intolerable that a reasonable person in her position would have been compelled to resign. We agree with the court of appeals that this question requires resolution by a jury, and hence, we conclude that the District's motion to dismiss the case should not have been granted. Accordingly, we affirm the decision of the court of appeals and remand the cause to the circuit court for trial for determination whether Strozinsky's resignation was a constructive discharge and, if so, whether the discharge violated public policy.

FACTS

¶ 7. Strozinsky presented the following facts.³ The District employed Strozinsky as a payroll clerk from approximately January 11, 1988, until September 30, 1995. Strozinsky was responsible for bookkeeping and payroll duties, and she determined the federal and state tax withholdings for all payroll checks issued to District employees. Among the employees for whom Strozinsky computed withholding tax was the District Superintendent, Kenneth Moe (Moe). Strozinsky reported directly to the District's Business Manager, Donald Amundson (Amundson), an immediate subordinate of Moe.

¶ 8. Under his employment contract with the District, Moe received an annual bonus equal to 10 percent of his salary. The check was issued directly into a tax-sheltered annuity account that Moe selected. Before 1993, the District had paid the bonus to the annuity account without withholding any Social Security or Medicare taxes from the gross amount. Strozinsky did not recall whether she or someone else prepared those checks; issuance of the bonuses had not always been within her area of responsibility.

¶ 9. Strozinsky did remember the bonus check paid to Moe in July 1994. No taxes were withheld from that check, and Amundson instructed Strozinsky not to make any adjustments to offset the difference in the two regular paychecks issued to Moe subsequently that month. Strozinsky recalled Amundson telling her "not [to] tax Mr. Moe that high." Although Strozinsky was not comfortable, she prepared the paycheck as Amundson directed and did nothing to verify whether her actions were legal or not. Id.

¶ 10. Strozinsky described an atmosphere at the District's business office in which the payroll staff was ill at ease with procedures that were not "legally correct." A previous bookkeeper, for instance, refused to sign off on federal tax forms she issued because they were not truthful. The bookkeeper feared she might be held personally liable for falsified information. Id. Another employee also refused to sign tax documents, testifying that the materials accompanying Moe's tax-sheltered annuity were fraudulent. Strozinsky herself had learned from her membership in the American Payroll Association that she could be held liable for errors in payroll checks.

¶ 11. The following year, Strozinsky issued Moe's annual bonus check on July 7, 1995. She drew the $9,149 bonus from the District's accounts payable checking account and submitted it to Moe's annuity account. Since issuing the 1994 paycheck without the withholdings, Strozinsky had become more informed about taxation procedures from the American Payroll Association and seminars she attended. She therefore believed tax should be withheld from the bonus check, but she was unable to deduct the amount because the District's computer software was not equipped to execute the withholding from the accounts payable account. Strozinsky therefore made an adjustment to offset the necessary withholding in Moe's next regular payroll check. She did not give Moe any advanced explanation that he would be receiving a reduced net amount on the paycheck. After Strozinsky deducted this additional amount, Moe's payroll check was about $500 less than he expected.

¶ 12. Moe received this reduced paycheck on July 20, 1995, and that same day he confronted Strozinsky about the large deductions. Strozinsky explained that she "was going to tax it properly" and wanted it "done correctly in regards to taxes and with Wisconsin Retirement." She said the tax laws required her to make withholdings from the bonus check, and she therefore had deducted the required amount from the regular paycheck. Moe allegedly told her that he "didn't care" and instructed Strozinsky that he did not want his payroll check to reflect any withholding to compensate for the annual bonus payment. During this conversation, Strozinsky found Moe assertive and "threatening in his demeanor." She testified at her deposition that Moe threw the check across the desk at Strozinsky and demanded that she change it. Strozinsky felt as if she were "being chastised like a child gets yelled at."

¶ 13. After this conversation, Strozinsky called the Internal Revenue Service (IRS) for advice. The IRS representative confirmed that tax should be withheld from the bonus payment, explaining that the deduction Strozinsky made was withheld properly from Moe's next regular paycheck. Strozinsky testified that the representative suggested that Moe himself should contact the IRS directly rather than arguing with Strozinsky about the withholding. The IRS allegedly told Strozinsky that she personally could be liable for the amount owed as well as a penalty and compounded interest.

¶ 14. Strozinsky conveyed the information she had received from the IRS to her supervisor, Amundson. She explained that she faced personal liability for any unpaid taxes, plus penalties and...