Tatge v. Chambers & Owen, Inc.

• Decision Date: 13 March 1997
• Docket Number: No. 95-2928,95-2928
• Citation: 210 Wis.2d 51,565 N.W.2d 150
• Parties: , 12 IER Cases 1385 Wayne G. TATGE, Plaintiff-Appellant-Cross Respondent, d v. CHAMBERS & OWEN, INC., Defendant-Respondent-Cross Appellant.
• Court: Wisconsin Court of Appeals

Page 150

565 N.W.2d 150

210 Wis.2d 51, 12 IER Cases 1385

Wayne G. TATGE, Plaintiff-Appellant-Cross Respondent, ^d v. CHAMBERS & OWEN, INC., Defendant-Respondent-Cross Appellant.

No. 95-2928.

Court of Appeals of Wisconsin.

Submitted on Briefs Dec. 9, 1996.

Opinion Released March 13, 1997.

Opinion Filed March 13, 1997.

[210 Wis.2d 52] For the plaintiff-appellant-cross respondent the cause was submitted on the briefs of Richard R. Grant of Consigny, Andrews, Hemming & Grant, S.C. of Janesville.

For the defendant-respondent-cross appellant the cause was submitted on the briefs of Fred Gants and Erica M. Eisinger of Quarles & Brady of Madison.

Before DYKMAN, P.J., and ROGGENSACK and DEININGER, JJ.

DYKMAN, Presiding Judge.

Wayne Tatge appeals from a judgment granting Chambers & Owen, Inc.'s post-verdict motion to dismiss his claim for negligent misrepresentation and from an order for summary judgment dismissing his claim for wrongful discharge. He argues that Chambers & Owen violated the public policy set forth in § 103.465, STATS., when it fired him for refusing to sign a non-compete agreement. He also argues that Chambers & Owen misrepresented that it would not discharge him for failing to sign the agreement. We conclude that an employer's discharge of an employee for failing to sign an unreasonable non-compete agreement does not give rise to a wrongful discharge claim. We also conclude that a breach of an employment contract is not actionable in tort. Accordingly, we affirm.

Chambers & Owen cross-appeals from the trial court's denial of its motion to remit damages and its alternative motion for a new trial. Chambers & Owen concedes that if we affirm the judgment below, we need not address its cross-appeal. Having affirmed, we need not address the cross-appeal.

BACKGROUND

Wayne Tatge had been employed by Chambers & Owen since 1981. In early 1993, Chambers & Owen asked Tatge to sign a non-compete agreement which required that, among other things, he not disclose customer data, programs and business practices of Chambers & Owen during or after his employment with the firm. Tatge had objections to the agreement and discussed them with the company's president. He testified that he asked what would happen if he refused to sign the agreement and the president replied "nothing." Tatge also discussed job security with the president and testified that the president told him his employment would be ongoing and terminable only for what amounted to good cause. Tatge had not signed the non-compete agreement by April 5, 1993, when Chambers & Owen terminated his employment because he had not signed the agreement.

Tatge brought suit against Chambers & Owen. His amended complaint alleged five causes of action: wrongful discharge, breach of contract, and strict liability, intentional and negligent misrepresentation. Both parties moved for summary judgment. The trial court dismissed the wrongful discharge claim, concluding that the management agreement did not violate Wisconsin's restrictive covenant statute, § 103.465, STATS. It concluded, however, that the breach of contract claim should be tried, as should the misrepresentation claims, but only as to alleged statements that Tatge's employment would be ongoing and that he could be fired only for cause.

The trial was bifurcated. At the end of the first phase, the jury found no contract between Chambers & Owen and Tatge, but determined that Chambers & Owen made a misrepresentation of fact that Tatge was entitled to ongoing employment and termination only for good cause.

During the second phase, Chambers & Owen moved to dismiss the misrepresentation claims. The trial court dismissed the intentional and strict liability misrepresentation claims, but allowed the negligent misrepresentation claim to go to the jury. The jury found for Tatge on that claim, assessed his damages at $250,000, and found him forty percent contributorily negligent. The trial court dismissed Tatge's negligent misrepresentation claim on Chambers & Owen's post-verdict motions for judgment notwithstanding the verdict, to change answers, and for directed verdict. Tatge appeals.

WRONGFUL DISCHARGE CLAIM

Tatge argues that the trial court erred in denying his motion for summary judgment on the wrongful discharge claim and dismissing this claim on Chambers & Owen's motion for summary judgment. We review summary judgment motions de novo and use the same methodology as the trial court. Envirologix Corp. v. City of Waukesha, 192 Wis.2d 277, 287, 531 N.W.2d 357, 362 (Ct.App.1995). That methodology is well known and we will not repeat it here. Whether Wisconsin recognizes a cause of action by an employee at-will for wrongful discharge is a question of law. We review In Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834 (1983), the court adopted a limited exception to the "employment at-will" doctrine, which provides that in the absence of a contract, an employer could fire an employee for any reason or no reason. Id. at 567, 335 N.W.2d at 837. The court said:

questions of law de novo. Kara B. v. Dane County, 205 Wis.2d 140, 145, 555 N.W.2d 630, 632 (1996).

[W]e hold 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.

Public policy is a broad concept embodying the community common sense and common conscience. The provisions of the Wisconsin Constitution initially declared the public policies of this state. Each time the constitution is amended, that also is an expression of public policy. In addition, public policy is regularly adopted and promulgated in the form of legislation.

Id. at 573, 335 N.W.2d at 840 (emphasis added; citation omitted).

Tatge argues that he was wrongfully discharged under Brockmeyer because his termination for failing to sign the non-compete agreement was contrary to the public policy set forth in § 103.465, STATS. This statute provides:

A covenant by an assistant, servant or agent not to compete with his or her employer or principal during the term of the employment or agency, or thereafter, within a specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal. Any such restrictive covenant imposing an unreasonable restraint is illegal, void and unenforceable even as to so much of the covenant or performance as would be a reasonable restraint.

We agree that § 103.465, STATS., is an expression of public policy. However, that does not necessarily mean that if an employer violates this statute, the Brockmeyer public policy exception to the at-will doctrine is triggered, giving rise to a claim for wrongful discharge.

Tatge's argument, although interesting, cannot be correct. Were Tatge correct, all restrictive covenant cases would become wrongful discharge cases. The "narrow public policy exception" of Brockmeyer would become the rule and the at-will doctrine would be swallowed up where employers and employees sign restrictive covenants. Section 103.465, STATS., sets out its own remedy. That remedy is not an automatic wrongful discharge claim for violating the statute. Rather, an overly expansive restrictive covenant is "illegal, void, and unenforceable even as to so much of the covenant or performance as would be a reasonable restraint." When a restrictive covenant is unreasonable, the public policy of Wisconsin is not to create a cause of action, but to void the covenant. Therefore, it is irrelevant whether the unsigned management agreement would have been an illegal restraint on trade. Even were we to conclude that the agreement was an illegal restraint on trade, Tatge would not have a cause of action for wrongful discharge. The trial court did not err by dismissing this cause of action. ¹

MISREPRESENTATION

After verdict, the trial court signed an order for judgment which reads: "Defendant's motion to dismiss plaintiff's cause of action for negligent misrepresentation is GRANTED." Tatge and Chambers & Owen differ as to the nature of the trial court's order. We need not determine this, however, because Tatge's brief shows that he considers this issue to be a question of law, as does Chambers & Owen. We decide questions of law de novo. Kara B. v. Dane County, 205 Wis.2d 140, 145, 555 N.W.2d 630, 632 (1996).

Tatge contends that Chambers & Owen negligently misrepresented to him that he was entitled to ongoing...