Wirig v. Kinney Shoe Corp., C5-89-653

Decision Date05 December 1989
Docket NumberNo. C5-89-653,C5-89-653
Citation448 N.W.2d 526
Parties51 Fair Empl.Prac.Cas. (BNA) 885, 5 IER Cases 44 Margaret WIRIG, Respondent, v. KINNEY SHOE CORPORATION, Appellant.
CourtMinnesota Court of Appeals

Syllabus by the Court

1. Pursuant to Minn.Stat. § 363.11, a cause of action for sexual harassment under Minn.Stat. § 363.03 of the Minnesota Human Rights Act is the exclusive procedure when a claimant brings a concurrent claim for common law battery arising from the same facts which support the sexual harassment claim; it is error for the trial court to submit special verdict questions on both claims to the jury.

2. When an employer calls a meeting and publishes defamatory matter about an employee for the purpose of making an example of and punishing the employee in front of nonsupervisory co-employees, the publication is for an improper purpose and upon an improper occasion; the employer does not act under a qualified privilege and the employee need not prove the employer acted with actual malice.

Lawrence R. Altman & Sandra F. Gilbert, Courey, Schwinn & Kodadek, P.A., Minneapolis, for respondent.

Joseph J. Roby, Jr., Johnson, Killen, Thibodeau & Seiler, P.A., Duluth, for appellant.

Heard, considered and decided by PARKER, P.J., and SHORT and GARDEBRING, JJ.

OPINION

PARKER, Judge.

Respondent Margaret Wirig sued her former employer, appellant Kinney Shoe Corporation, for sexual harassment and battery by the same co-employee and for defamation by certain supervisors. Kinney appeals the trial court's denial of a new trial following a judgment that it was liable for both sexual harassment under the Minnesota Human Rights Act and for common law battery and awarding Wirig damages under both claims. Although Kinney admits its liability for sexual harassment, it asserts the trial court erred in finding that recovery under the statutory claim does not preclude recovery under the common law battery claim based on the same acts, and in awarding punitive damages or failing to remit the punitive damage award. Wirig seeks review of the trial court's denial of damages under the defamation claim. She contends the trial court erred in finding that Kinney's managers had a qualified privilege to publish the defamatory matter to her co-employees. We affirm in part, reverse in part and remand.

FACTS

Margaret Wirig and Mark Thorson were co-employees at the Kinney shoe store located at Southdale Shopping Center. They worked together over a period of four months, until Wirig was fired. Thorson was a nonsupervisory, nonmanagerial salesperson.

The trial court found that on repeated occasions Thorson made statements to and about Wirig and exhibited conduct toward her of a sexual nature. The statements included comments about her body, offensive sexual names, repeated requests for dates with her after she expressed her refusal to date him, and discussions of what he would like to do to her sexually. On a number of occasions and without Wirig's consent, Thorson kissed her and touched her in sexually offensive ways.

Kinney's managers were aware of this harassment. Four managers at different times observed Thorson pinch, pat, kiss or put his arm around Wirig and direct sexually offensive comments to her. Co-employees also testified that they observed such conduct and complained to Kinney managers about Thorson's offensive behavior toward Wirig. Over a period of four months, she complained to several managers and asked them to stop him from touching her and asking her out on dates.

On only one occasion did a Kinney manager confront Thorson about his behavior toward Wirig. During the first two months they worked together, an assistant manager witnessed Thorson either pinch or pat Wirig on her backside. He pushed Thorson up against a wall in the storeroom and threatened to fire him the next time he harassed her. This inappropriate use of physical force had no effect; Thorson continued to harass her.

Another assistant manager admitted that Wirig complained to him about Thorson on at least three occasions. He described Thorson as a "forward sort of guy" and said he saw him grabbing Wirig's arms, patting her and making comments about her physical appearance. When he reported to manager Ed Schultz that there were problems between Thorson and Wirig, Schultz told him, "you are going to have to get them guys working together * * * we are all a team and you have to have a well-oiled machine in order for everything to run smoothly."

Thorson was never disciplined for harassing her. Kinney managers never made an investigation to discover whether she was in fact sexually harassed.

At the time Wirig worked for Kinney, the company had no sexual harassment policy in effect. Kinney had not trained any of its managers to identify or deal with sexual harassment and had not instructed its employees about sexual harassment.

In late July 1985 Kinney caused an audit to be performed at its Southdale store. During the audit Thorson told manager Schultz and two assistant managers that the audit would be bad. He said he had seen Wirig and two others steal a carload of shoes. Schultz, who was being transferred out of the store, testified that he did not take Thorson's accusation seriously. After the audit showed a substantial shortage, the assistant managers told the new store manager that they had witnesses to the theft of shoes.

Without performing an investigation and without identifying the witnesses, the manager allowed the assistants to call a meeting of all store employees, including nonsupervisory staff, for the purpose of punishing and making an example of the three accused employees. At this meeting the managers told the employees there was a shortage due to employee theft and the responsible people would be punished. After no one offered any comments, the managers singled out and publicly fired Wirig and two others. The new manager testified that he assumed Wirig would be embarrassed and humiliated by the manner in which she was fired.

As a result of her experience at Kinney, Wirig was diagnosed by her treating psychologist as having suffered from either post-traumatic stress disorder or adjustment disorder from a depressed mood. The psychiatrist testified that Wirig continued to exhibit severe symptoms two years after she worked for Kinney. The physical and emotional distress was characterized by vomiting, loss of 27 pounds, sleep disturbances and nightmares.

At trial the court used a jury, impaneled because of Wirig's common law claims, in an advisory capacity on the sexual harassment claim. Special verdict questions relating to each claim were submitted to them. The jury found Kinney liable for sexual harassment and battery. They found Kinney had defamed Wirig, but that the defamatory statement was not made with actual malice. The jury determined the following damages:

                Compensatory Damages
                 Sexual Harassment     $ 30,000
                 Battery               $ 14,000
                 Defamation            $ 10,000
                Future Damages
                 Sexual Harassment      $ 7,100
                Punitive Damages
                 Sexual Harassment      $ 5,000
                 Battery               $100,000
                 Defamation            $225,000
                

The court allowed recovery under both the statutory claim for sexual harassment and the common law claim for battery. Because the court determined that Kinney had a qualified privilege and the jury found no actual malice, there could be no recovery for defamation.

ISSUES

1. Did the trial court err in finding that recovery for sexual harassment under the Minnesota Human Rights Act, Minn.Stat. § 363.03 (1986), did not preclude recovery for common law battery when both claims were based on the same acts?

2. Did the trial court err in finding that Kinney had a qualified privilege to call a meeting of all store employees and accuse Wirig of stealing?

3. Did the trial court err in finding that the evidence supported the jury's award of punitive damages and in denying a remittance of damages?

DISCUSSION

I: Preemption

Kinney argues that the Minnesota Human Rights Act expressly preempts recovery under an alternate claim which is supported by the same facts. Statutory interpretation based on undisputed facts is a question of law, which this court reviews de novo. A.J. Chromy Construction Co. v. Commercial Mechanical Services, Inc., 260 N.W.2d 579, 582 (Minn.1977).

Minn.Stat. § 363.11 (1986), the preemption section, provides in part:

[A]s to acts declared unfair by sections 363.03 and 363.123, the procedure herein provided shall, while pending, be exclusive.

Minn.Stat. § 363.03 provides:

[I]t is unfair employment practice * * * [f]or an employer because of * * * sex * * * to discriminate against a person with respect to * * * conditions * * * of employment.

Id., subd. 1(2)(c) (1986). Sexual harassment directed at an employee by a fellow employee may constitute sex discrimination under Minn.Stat. § 363.03. Continental Can Company, Inc. v. State, 297 N.W.2d 241, 245 (Minn.1980). The statute defines sexual harassment to include

unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature * * *.

Minn.Stat. § 363.01, subd. 10a (1986) (emphasis added).

A battery is an intentional, unpermitted, offensive bodily contact with another. Paradise v. City of Minneapolis, 297 N.W.2d 152, 155 (Minn.1980). An employer may be found liable for the battery perpetrated by its agent if (1) the employer approves of or should reasonably have foreseen the battery, and (2) the battery occurred at a place and during a time related to the employment. Marston v. Minneapolis Clinic of Psychiatry, 329 N.W.2d 306, 310-11 (Minn.1982).

From the definition of battery and the statutory definition of sexual harassment, it is clear that the Minnesota Human Rights Act makes it an unfair employer practice to subject an employee to battery of a sexual nature in connection with employment. Under the...

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