Strozinsky v. School District of Brown Deer
237 Wis. 2d 19, 2000 WI 97, 614 N.W.2d 443 (2000)
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Rule of Law:
An employee who resigns may pursue a wrongful discharge claim under the public policy exception to the employment-at-will doctrine if the resignation was a constructive discharge. State and federal tax laws prohibiting fraudulent reporting constitute a fundamental and well-defined public policy that can support such a claim.
Facts:
- Cathy Strozinsky was a payroll clerk for the School District of Brown Deer, responsible for calculating and withholding taxes from employee paychecks.
- In July 1994, Strozinsky's supervisor, Donald Amundson, directed her not to withhold taxes from Superintendent Kenneth Moe's bonus check, and she complied.
- In July 1995, believing it was required by law and that she faced personal liability, Strozinsky withheld taxes from Moe's regular paycheck to cover the tax obligation from his annual bonus.
- Moe confronted Strozinsky angrily, threw his paycheck at her, and demanded she reissue it without the tax withholding.
- After the IRS confirmed her potential personal liability, Amundson ordered Strozinsky to issue a new check without withholdings, which she did only after he signed a statement accepting liability.
- Moe then demanded a third check with partial withholdings. During the attempt, Moe screamed at Strozinsky, threatened her job, and stated that if she did not trust him, she should not work there.
- Following the incident, Moe and Amundson excluded Strozinsky from job duties, stopped communicating with her, and subjected her to increased workplace pressure.
- On September 13, 1995, after Amundson told her she was "working for the wrong guy" and suggested she work elsewhere, Strozinsky submitted her resignation.
Procedural Posture:
- Cathy Strozinsky filed a wrongful discharge complaint against the School District of Brown Deer in the Milwaukee County Circuit Court (the trial court).
- The District moved for summary judgment, which the circuit court granted, finding Strozinsky failed to satisfy the public policy exception.
- The circuit court suggested Strozinsky proceed on a theory of constructive discharge, but later dismissed that claim as well after Strozinsky's motion for reconsideration was denied.
- Strozinsky, as appellant, appealed the dismissal to the Wisconsin Court of Appeals.
- The court of appeals reversed the circuit court, finding that genuine issues of material fact existed regarding whether Strozinsky was constructively discharged in violation of public policy.
- The School District of Brown Deer, as petitioner, sought review from the Supreme Court of Wisconsin.
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Issue:
Does an at-will employee who resigns after being pressured to violate state and federal tax laws, and subsequently subjected to intolerable working conditions, have an actionable claim for wrongful discharge under the public policy exception to the employment-at-will doctrine?
Opinions:
Majority - Justice David T. Prosser
Yes, an at-will employee in this situation has an actionable claim for wrongful discharge. First, the employee identified a fundamental and well-defined public policy in state and federal tax laws that prohibit fraudulent reporting (Wis. Stat. § 943.39 and 26 U.S.C. §§ 3101, 3102, 6672(a)). An employer cannot require an employee to choose between violating the law and being terminated. Second, the doctrine of constructive discharge applies to common law wrongful discharge claims, meaning a coerced resignation can satisfy the 'discharge' element of the claim if the employer made working conditions so intolerable that a reasonable person would be compelled to resign.
Analysis:
This decision significantly develops Wisconsin's employment law by expanding the public policy exception to the at-will doctrine in two ways. First, it establishes that federal statutes, specifically tax laws, can serve as a source of fundamental public policy for a state wrongful discharge claim. More critically, the court formally incorporates the doctrine of constructive discharge into this common law context, preventing employers from circumventing wrongful discharge liability by creating intolerable conditions to force a resignation rather than issuing an explicit termination. While the standard for proving constructive discharge is high, this ruling provides a crucial avenue of relief for employees pressured to violate the law.
