Wage Payment of Commission Sales Employees in Wisconsin

WP&S's Focus on Wisconsin Labor and Employment Law Developments complimentary newsletter is distributed periodically throughout the year to
Wisconsin clients and friends of the firm.  Below is a copy of the April 2001 issue.

WISCONSIN SUPREME COURT OVERTURNS $24.7
MILLION AWARD IN "SEINFELD CASE"

On March 20, 2001 the Wisconsin Supreme Court unanimously upheld the Court of Appeals’ reversal of a $24.7 million jury award against Miller Brewing Co. over the firing of one of its employees. This highly anticipated decision, which has come to be known as the "Seinfeld case" for its reference to the once popular television show, centered on a claim of intentional misrepresentation against Miller by Jerold Mackenzie, a former employee.

Mackenzie claimed that Miller failed to inform him when his position had been downgraded as a result of company reorganization. Because of Miller’s failure to inform Mackenzie of the change in his job status, Mackenzie claimed Miller induced him to continue his employment there.

The Supreme Court took up the issue of whether Miller had a duty to disclose information to Mackenzie that potentially affected his decision to continue employment with Miller. In affirming the Court of Appeals decision, the Supreme Court ruled that Miller did not have such a duty and that under Wisconsin law, the tort of intentional misrepresentation does not exist in the context of the employment relationship.

As support for its decision, the Supreme Court listed public policy considerations, including the idea that the market will police itself. For example, if employers continually mislead employees, the employees will move to different jobs. Thus, if employers engage in this type of behavior, they are ultimately harming themselves.·

To obtain a copy of this court decision or if you have any questions, please contact the Milwaukee office of Wessels Pautsch & Sherman P.C. at (414) 291-0600.

LABOR PEACE ORDINANCE DEBATE REMAINS HOT TOPIC

Wessels Pautsch & Sherman P.C. is part of a coalition led by the Metropolitan Milwaukee Association of Commerce challenging the controversial Labor Peace Ordinance. The ordinance requires all employers with Milwaukee County contracts in excess of $250,000 to remain neutral in union organizing drives and limits the information employers are allowed to give to employees during those drives. Because of its adverse effect on employer rights guaranteed under the National Labor Relations Act, there is great concern over the legality of the ordinance. As a result, several companies with large county contracts have already delayed or protested signing new contracts that include the Labor Peace neutrality language.

The Milwaukee County Board of Supervisors passed the ordinance in September, despite warnings from its own attorneys who questioned the measure’s constitutionality. In response, the MMAC filed a lawsuit in federal court alleging violations of due process, free speech and violations of the NLRA. The County has approved spending at least $50,000 of taxpayer money to defend against this lawsuit. The County’s retention of outside attorneys is necessary because its own Corporation Counsel earlier took the stance that the Labor Peace Ordinance is plainly unconstitutional. As always, we will continue to keep you updated on all developments concerning this hotly debated issue.·

TRUTHFUL REPORTS TO POLICE BY EMPLOYER NOT "ADVERSE ACTION"

In a recent decision entitled Alfredo Aviles v. Cornell Forge, the Seventh Circuit Court of Appeals rejected an employee’s retaliation claim that a call to police by his employer constituted an "adverse action." Wessels Pautsch & Sherman P.C. argued on behalf of the employer, Cornell Forge.

Alfredo Aviles, who is of Mexican descent, alleged that while he held the job of shipping clerk at Cornell Forge, he was subjected to insults, racial slurs, and was also deprived of a number of his assigned duties. As a result, Aviles filed charges with the Equal Employment Opportunity Commission (EEOC) in May of 1994 alleging that he was being harassed, discriminated and retaliated against based on national origin.

Shortly after filing his claim, Aviles was suspended for five days for non-related disciplinary reasons. Upon refusing to leave the premises once notified of his suspension, a supervisor called the police to escort Aviles from the property. Though instructed not to return, Aviles later returned and parked his car approximately one and one-half blocks from the plant. Someone from the plant, noticing that Aviles had returned, called the police to report Aviles’ presence. In response to an officer’s question as to whether Aviles may be armed, the caller responded that "he might be." Based on the caller’s acknowledgement that Aviles could be armed, the police approached Aviles’ parked car with "a great display of force" and, according to Aviles, officers rousted him from his car with their guns drawn, ultimately to find out that he was unarmed.

Aviles argued that Cornell Forge’s act of notifying the police of his presence outside the plant after his suspension, and the ensuing dramatics with the police, constituted an "adverse action" supporting his claim of retaliation by his employer. Affirming an earlier decision of the district court, the Seventh Circuit held that Cornell Forge’s actions did not constitute an adverse action.

The Court emphasized in its decision that although it did acknowledge in an earlier appeal of this same case "that a false report to the police that Aviles was armed and laying in wait outside the plant after threatening his supervisor could certainly be construed as a retaliatory action meant to dissuade Aviles from pursuing his EEOC charge against the company," this does not mean "that a truthful report to police regarding an employee could be construed as an adverse action."·  

CONGRESS REPEALS OSHA RULES

In the last issue of Focus on Wisconsin Labor and Employment Law Developments, we discussed many of the potential problems employers faced as a result of the promulgation of OSHA’s new ergonomics rules. We were not alone in our concern over the negative impact the new rules would have. On March 7, 2001 Congress voted to repeal the new workplace rules.

Congress’s swift action on this highly controversial set of OSHA regulations will save employers untold dollars that would have been spent implementing the new rules. The cost of compliance was expected to exceed five percent of profits in 27 industries. For example, men’s clothing producers were expected to see almost 170 percent of their profits lost as a result of the new standards! These prohibitive costs had the potential to force many business owners to close their doors. This potential to destroy small businesses weighed heavily on the minds of numerous lawmakers. "There’s a sure way to make all the injuries go away, and that’s to make all the jobs go away," said Rep. Anne Northup of Kentucky in arguing against the OSHA rule.·

UNITED STATES SUPREME COURT UPDATE

In a 5-4 decision on March 21, 2001, the United States Supreme Court in Circuit City Stores v. Adams (No. 99-1379) ruled that employers could require their employees to sign mandatory arbitration agreements as a condition of employment. This means that employees can be compelled to take job-related disputes to arbitration rather than file an action against an employer in court. Some employers favor arbitration because it has the potential to end disputes relatively quickly without time consuming and costly litigation. This ruling does not fundamentally alter Wisconsin law, but rather reaffirms the current law in our state.·

For more information on this case or if you have questions regarding arbitration or employment contract issues, please contact Wessels Pautsch & Sherman P.C.’s Milwaukee office at (414) 291-0600.