COURT OF APPEALS
DATED AND FILED
June 2, 2010
Clerk of Court of Appeals
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
STATE OF WISCONSIN
IN COURT OF
Mary K. Farady-Sultze,
Aurora Medical Center of Oshkosh,
from an order of the circuit court for Winnebago County: karen
l. seifert, Judge. Affirmed.
Before Brown, C.J., Anderson and Snyder, JJ.
¶1 BROWN, C.J. Aurora
Medical Center of Oshkosh, Inc., fired Mary K. Farady-Sultze from her job after
discovering that it had mistakenly overpaid her for a period between June 13,
2008, and October 13, 2008, and concluding that Farady-Sultze kept those
overpayments to herself. Farady-Sultze
sued Aurora, noting that an exception to Wisconsin’s
employee-at-will doctrine occurs when the termination violates public policy. She claimed that the firing was contrary to Wis. Stat. § 103.455 (2007-08)
(outlining the process due before an employer may deduct wages for faulty
workmanship, loss, theft or damage). But
we hold that Aurora
did not run afoul of this statute, which is designed to offer certain
protections for an employee who has earned
wages taken away. Here, Farady-Sultze
never earned the extra payments; the statute does not protect her. We also reject her intentional infliction of
mental distress and defamation claims and affirm.
¶2 This appeal is, technically speaking, a review of the circuit
court’s grant of a motion to dismiss the complaint. In such circumstances, this court’s
examination would be limited to the allegations in the complaint. Noonan v. Northwestern
Mut. Life Ins. Co., 2004 WI App 154, ¶30, 276 Wis. 2d 33, 687 N.W.2d
254. But where a circuit court considers
matters outside the complaint, we may treat the appeal as though it were from a
summary judgment. Converting/Biophile Labs., Inc.
v. Ludlow Composites Corp., 2006 WI App 187, ¶2, 296 Wis. 2d 273, 722
N.W.2d 633. The circuit court in this
case considered not only the complaint, but all the pleadings and briefs of
both parties, in rendering its decision.
The briefs included attachments such as the appeal tribunal decision
from Farady-Sultze’s unemployment compensation hearing. So, we will consider the briefs and
attachments as well. Because the facts
contained within the tribunal decision are undisputed and provide the proper
background for discussion of this case, we will use those facts.
¶3 Farady-Sultze was employed as a social worker for Aurora. She was paid every two weeks via automatic
deposit. She worked at both Aurora’s Wautoma and Oshkosh
locations for a period of time. She
worked sixteen hours per pay period at the Wautoma location. As of May 24, 2008, she stopped working at
the Wautoma location. But her supervisor
in Wautoma failed to remove her from the payroll for that location. So, on her paychecks from June 13, 2008,
through October 31, 2008, she was paid for sixteen hours of work every pay
period at the hourly rate of $19.75 that she did not perform. This pay was in addition to the pay that she
received for the hours that she actually worked at the Oshkosh location.
¶4 On or about November 11, 2008, Aurora discovered its error. It suspended Farady-Sultze pending an
investigation. On November 18, Aurora terminated
her. At the unemployment compensation
hearing, Aurora’s contention was that she knew
she was being paid more than she should and yet did not bring the error to Aurora’s attention. Farady-Sultze countered that she did not know
she was being paid incorrectly; she was not required to enter her work hours
for a pay period as those were entered by the employer’s staff. And she claimed that, even though she did
have access to an electronic copy of her paycheck stubs, she did not receive a
paper copy every two weeks. Those are
the pertinent facts.
¶5 Independent of her unemployment compensation claim, she
brought this action. She claimed that
she was wrongfully terminated and that, although Wisconsin is a termination-at-will state,
our courts will allow wrongful termination actions to proceed if the employer
has terminated an employee in violation of some recognized state policy. She also claimed, inter alia, intentional
infliction of emotional distress and defamation. The circuit court granted Aurora’s motion to dismiss which we are
reviewing as though it was a summary judgment. We will conduct a de novo review because the
issues are issues of law and the facts are undisputed. See
v. Napiorkowski, 2003 WI App 249, ¶12, 268 Wis. 2d 673, 673 N.W.2d 351.
¶6 It has long been the law in Wisconsin that employees are terminable at
will, for any reason, without cause and with no judicial remedy. See
v. Miller Brewing Co., 2001 WI 23, ¶12, 241 Wis. 2d 700, 623 N.W.2d 739. So, it matters not that she claims her inaction
was unintentional in that she just did not pay close attention to her pay
stubs. It also matters not that Aurora decided to fire
her rather than ask that the money be paid back. Aurora
can fire her for any reason, reasonable or not.
¶7 Knowing that this is the law in Wisconsin, she tried to
convince the circuit court, as she tries to convince this court, that she falls
under the very narrow exception to the employee-at-will doctrine. That doctrine was explained as follows by our
supreme court: “an employee has a cause
of action for wrongful discharge when the discharge is contrary to a
fundamental and well-defined public policy.”
Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 572-73, 335 N.W.2d 834
(1983). She does so by hitching her
wagon to the statute successfully invoked by the plaintiff in Wandry
v. Bull’s Eye Credit Union, 129 Wis. 2d 37, 384 N.W.2d 325 (1986).
¶8 Wandry involved a woman who was employed as a cashier for a
credit union. Id. at 39. She cashed a stolen check and the credit
union demanded that she reimburse the credit union for its loss. Id. When she refused, the credit union fired
her. Id. at 40. She brought a wrongful termination suit and
argued that she satisfied the narrow exception to the employee-at-will doctrine
because the credit union had violated Wis.
Stat. § 103.455, which she asserted was an expression of Wisconsin public policy.
Wandry, 129 Wis.
2d at 43. The supreme court agreed and
Wandry won her case. Id. at 47-49. Because Farady-Sultze asserts that the same
statute applies in her case, we will undertake close examination of that
statute. The pertinent part of
§ 103.455 states as follows:
No employer may make any deduction from the wages due
or earned by any employee … for defective or faulty workmanship, lost or stolen
property or damage to property, unless the employee authorizes the employer in
writing to make that deduction or unless the employer and a representative
designated by the employee determine that the … theft … is due to the
employee’s negligence, carelessness, or willful and intentional conduct, or
unless the employee is found guilty or held liable in a court of competent
¶9 The intent of the statute is quite clear. Once the employee earns wages, that employee is protected from having the employer deduct
those earned wages on charges that the employee was responsible for defective
or faulty workmanship, or lost or stolen property or damaged property unless
one of three things occur: (1) the
employee agrees in writing to the deduction, (2) the employer and a
representative designated by an employee determines that the employee is
responsible, or (3) that the employee’s responsibility is found after court
proceedings. The public policy goal of
the statute is to prevent the employer from arbitrarily deducting hard earned
wages at its prerogative. The statute
accords a method of due process.
¶10 Farady-Sultze does not begin to come under the statute. She never earned that sixteen hours of wages
in Wautoma every pay period after she was reassigned. So, the goal of the statute, to protect earned wages, never came into play.
Moreover, the purpose of the statute is to prevent unauthorized
deduction from earned wages. There was
no deduction of earned wages here.
Therefore, despite her claim that she simply did not know that she was
getting more wages than she was supposed to, the fact remains that her claim is
not protected by public policy.
¶11 One issue remains—or should we say, one issue with two parts
remains. In addition to her wrongful
termination claim, Farady-Sultze also claimed that Aurora
intentionally inflicted emotional distress on her and, in a separate claim,
defamed her. To both of these claims,
the circuit court held that they were barred by the exclusivity provision of
the Worker’s Compensation Act, Wis.
Stat. § 102.03. On appeal,
Farady-Sultze challenges the use of the exclusivity provision by the circuit
court. While she acknowledges that “an
action for infliction of emotional distress arising in the scope of employment
is barred by the exclusivity provision of the Worker’s Compensation Act,” she
claims that such an action may not be barred when the injuries arise in the
context of termination rather than employment.
She cites an unpublished opinion by a federal district court, Keenan v. Foley Co., 35 FEP Cases
937 (E.D. Wis. 1984), to say that the exclusivity provision in the Worker’s
Compensation Act does not apply when the act is done in the context of
termination rather than employment.
¶12 We have a few responses to that. First, the obvious one. We are not bound by federal court decisions
in civil cases which attempt to construe state law. Johnson v. Crawford
County, 195 Wis. 2d 374, 383, 536 N.W.2d 167 (Ct. App.
1995). Second, Keenan was decided in
1984, long before relevant appellate cases by our supreme court and court of
appeals were written, so the district judge had no guidance. Third, now on the books is Jenson
v. Employers Mutual Casualty Co., 161 Wis. 2d 253, 257, 468 N.W.2d 1 (1991), which
held that the tort of intentional infliction of mental distress is barred by
the exclusivity provision of the Worker’s Compensation Act. While it is true that the acts in Jenson
occurred during employment and not after termination, the Jenson court did not make
or discuss the distinction that Farady-Sultze now raises. See id. at 261-63. We are bound by Jenson. Fourth, even if we were to accept Farady-Sultze’s
qualification of Jenson on the law, she would still lose on the facts. Farady-Sultze claims that the investigation
process and the conclusion that she was guilty of theft were what caused her
this emotional distress. All of this
happened while she was still employed and before termination. So, even assuming arguendo that a distinction
exists, it is not found on the facts here.
¶13 Her defamation claim also fails. She contends that Aurora
expressly informed her that, pursuant to Aurora
policy, it would affirmatively disclose to potential employers the reason for
termination (theft). But, we held, in Becker
v. Automatic Garage Door Co., 156 Wis.
2d 409, 418, 456 N.W.2d 888 (Ct. App. 1990), and then again in Wolf
v. F & M Banks, 193 Wis. 2d 439, 455, 534 N.W.2d 877 (Ct. App.
1995), that defamation claims by an employee against an employer are preempted
by the Worker’s Compensation Act. And,
we note that, in Wolf, the claimed defamation occurred after discharge, which is
similar to what Farady-Sultze alleges is the case here. See Wolf, 193 Wis. 2d at 447-48. We say “similar” because the argument is
similar. But the facts are not
similar. In Wolf, the claim was that
the defamation, broadcasting the reason for his firing, was alleged to have
actually occurred. Id.
Here, Farady-Sultze cannot point to any fact showing that Aurora has actually
carried through with its stated policy decision to affirmatively disclose the
reason for her firing to potential employers.
In other words, if there is to be such an allegation of defamation,
there is no evidence that it has occurred yet or that it ever may occur. For all these reasons, her defamation claim
was properly dismissed. We affirm in
By the Court.—Order affirmed.