Wirig v. Kinney Shoe Corp.

• Decision Date: 19 October 1990
• Docket Number: No. C5-89-653,C5-89-653
• Parties: 54 Fair Empl.Prac.Cas. (BNA) 352, 55 Empl. Prac. Dec. P 40,513, 5 IER Cases 1562 Margaret WIRIG, Appellant, v. KINNEY SHOE CORPORATION, Respondent.
• Court: Minnesota Supreme Court

Page 374

461 N.W.2d 374

54 Fair Empl.Prac.Cas. (BNA) 352,

55 Empl. Prac. Dec. P 40,513, 5 IER Cases 1562

Margaret WIRIG, Appellant, v. KINNEY SHOE CORPORATION, Respondent.

No. C5-89-653.

Supreme Court of Minnesota.

Oct. 19, 1990.

Syllabus by the Court

1. A sexual harassment action brought pursuant to the Minnesota Human Rights Act does not bar a parallel action for common law battery.

2. Double recovery for the same harm is prohibited; therefore, where compensatory and punitive damages are awarded for the same harm suffered as a result of sexual harassment and battery, the damage awards for battery are vacated.

3. An employer's interest in protecting itself and the public from dishonest employees provides a proper purpose and occasion for making a defamatory communication, but employer's failure to conduct any private investigation of report of theft before accusing, even indirectly, an employee of that theft, does not provide probable or reasonable grounds for the communication; as a result, the employer does not enjoy a qualified privilege as a matter of law.

4. Punitive damages cannot be awarded under Minn.Stat. § 549.20, subd. 1 (1988) against an employer who defames an employee under circumstances of gross negligence when the facts negate a finding of willful indifference to the employee's rights.

5. Under the facts of this case, there was no abuse of discretion by the trial court when it did not assess a civil penalty under the provisions of Minn.Stat. § 363.071, subd. 2 (1988).

Lawrence R. Altman, North Oaks, Sam T. Courey, Courey, Schwinn & Kodadek, Minneapolis, for appellant.

Joseph J. Roby, Jr., Johnson, Killen, Thibodeau & Seiler, Duluth, for respondent.

Sonja R. Peterson, Horton & Assoc., Minneapolis, for amicus curiae MN Now & Les Soers.

Minn. Dept. of Human Rights, Earll M. Pott, Sp. Asst. Atty. Gen., St. Paul, amicus curiae.

Minn. Trial Lawyers Ass'n, David Singer, Karla R. Wahl, amicus curiae.

Women's Legal Defense Fund, Andrea F. Rubenstein, Douglas A. Hedin, Minneapolis, amicus curiae.

Heard, considered and decided by the court en banc.

KEITH, Justice.

Margaret Wirig commenced this action seeking damages against her former employer Kinney Shoe Corporation (Kinney) for sexual harassment under the Minnesota Human Rights Act (MHRA), for common law battery arising from the same set of facts and for defamation of an employee by an employer. At the end of trial, the jury found in favor of Wirig on all three counts. The jury awarded the following damages: $30,000 compensatory, $7,100 future, and $5,000 punitive damages for sexual harassment; $14,000 compensatory and $100,000 punitive damages for battery; and $13,000 compensatory and $225,000 punitive damages for defamation. All awards were by special verdict, although the jury acted only in an advisory capacity on the sexual harassment claim.

The trial court accepted the advisory jury's findings and damage awards on the battery and sexual harassment claims, modifying only the award for punitive damages for sexual harassment by increasing it to the then statutory maximum of $6,000. It rejected any award for defamation, concluding as a matter of law that Kinney had a qualified privilege with respect to its defamatory statements, and that, absent a finding of malice, the privilege was not abused. It declined to assess a civil penalty.

Kinney's post trial motions for amended findings, JNOV, remittitur and a new trial were denied, and Wirig's pending motion for attorneys fees, costs and disbursements was in part granted. Kinney appealed the order denying it a new trial, while Wirig filed a notice of review of that part of the judgment denying her the defamation damages awarded her by special jury verdict.

The court of appeals, holding that pursuant to Minn.Stat. § 363.11 (1988), an action for sexual harassment brought under the Minnesota Human Rights Act bars a common law battery claim arising from the same acts, vacated the award of compensatory and punitive damages for battery. Wirig v. Kinney Shoe Corp., 448 N.W.2d 526, 531, 536 (Minn.App.1989). It reinstated the damages awarded for defamation, holding as a matter of law that Kinney did not enjoy a qualified privilege for its accusation of theft against Wirig. Id. at 532-35. Finally, it remanded the case to the trial court for assessment of civil penalties to the state pursuant to Minn.Stat. §§ 363.14, subd. 2, 363.071, subd. 2 (1988). Id. at 536.

Kinney petitioned for review on the issues of qualified privilege, affirmation of the defamation damage awards and the remand to the trial court for consideration of the imposition of a civil penalty. Wirig sought review of the determination that her battery claim was preempted by the Minnesota Human Rights Act. We affirm in part and reverse in part.

Kinney did not appeal the sexual harassment award or the facts underlying it that also support the battery award.

Wirig was employed by Kinney at its retail store in Southdale Shopping Center, Edina, Minnesota, as a part-time cashier from December 1984 until July 31, 1985, when she was fired. From April 1985 until her firing, Mark Thorson was also employed at this store as a nonsupervisory, nonmanagerial salesperson.

During the period they worked together Thorson made statements to and about Wirig which included comments about her body, offensive sexual names, and discussions about what he would like to do to her sexually. On a number of occasions, without Wirig's consent, he kissed, pinched, patted or put his arm around her. Four Kinney managers and other co-workers observed this behavior. She complained on several occasions to several managers and asked them to stop Thorson from touching her. On only one occasion did a Kinney manager confront Thorson about this inappropriate touching and this attempt had no effect on his subsequent behavior. He was never disciplined for his statements or physical touching of Wirig. At the time, Kinney had no sexual harassment policy in effect and no effort had been made to train any of its managers to identify and deal with this problem.

Near the end of Wirig's employment at Kinney, an audit was conducted because store management changed. The audit showed losses of several thousand dollars in inventory. To find out why, the incoming manager met with the other managerial personnel shortly after the audit and discussed allegations of theft. Assistant managerial employees had heard accusations that several employees had stolen merchandise. The accusations came in particular from Thorson, who said he had witnessed theft, but also from a Kinney employee from another store who testified that someone told her about the theft and that it was "big gossip" among company employees. The incoming manager believed the assertions of theft and accepted the assistant managers' conclusions regarding the employees responsible, even though he had just started as manager and was not previously acquainted with either assistant manager and even though neither assistant manager would identify the witnesses to the thefts.

No investigation was conducted on the basis of the information. The assistant managers said they had solid proof because (1) Thorson was certain of it, (2) both assistant managers had heard of the theft, (3) the three accused socialized and hung around together, and (4) actual loss occurred as shown by the audit. In the context of possible prosecution for theft, however, the outgoing manager testified that Kinney did not have sufficient proof. Nevertheless, both the assistant manager and incoming manager testified that they honestly or absolutely believed Wirig had committed theft.

The incoming manager and both assistant managers decided Wirig and two other employees had committed the thefts and should be fired to assure there would be no more problems. The firings were to occur in front of all other employees involved at the Southdale store in order to set an example and show everyone that the new manager would not tolerate short audits. A meeting of all employees including management was called the next day. An assistant manager presented results of the audit and the conclusion that theft occurred. Employees were asked if anyone wanted to admit to it or comment upon it. No one did. It was clear that Wirig was accused of theft, albeit indirectly. At the end of the meeting, Wirig and the others were discharged, but made no protest regarding the charges.

Subsequent to the firing, Wirig requested a separation report. The report listed tardiness as the reason for discharge and made no mention of theft, because, according to the assistant manager who prepared the report, he wanted her to be able to get a job in the future, which she did without difficulty. According to testimony at trial, the managerial staff had no "ill will, spite or hard feelings" towards her.

1. We first address the question of whether an employee can maintain against her employer both a statutory cause of action for sexual harassment under the Minnesota Human Rights Act (MHRA) and a common law cause of action for battery, when both claims arise from the same set of operative facts. We have long followed the presumption that statutory law is consistent with common law. In re Shetsky, 239 Minn. 463, 469, 60 N.W.2d 40, 45 (1953). If statutory enactment is to abrogate common law, the abrogation must be by express wording or necessary implication. Id. Nothing in the exclusivity provision of the MHRA, Minn.Stat. § 363.11 (1988), expressly abrogates common law battery. In its entirety, section 363.11 states:

The provisions of this chapter shall be construed liberally for the accomplishment of the purposes thereof. Nothing contained in this chapter shall be deemed to repeal any of the provisions of the civil rights law or of any other law of this state relating to discrimination because of race, creed, color, religion, sex, age, disability, marital status, status with regard to public...