By Ruder Ware Alumni
August 2, 2017
A recent decision from the Wisconsin Court of Appeals has upheld the concept of “employment-at-will” and determined that an employment-at-will provision in an employment contract superseded company policies that provided alternative procedures to be followed when investigating inappropriate conduct of an employee. In a recent decision of the District IV Court of Appeals, the Court held that the employment-at-will provision in a written employment agreement between a physician and Dean Health Systems, Inc. was the controlling principle when a legal challenge was filed to the termination of the physician (Bukstein v. Dean Health Systems, Inc. (Case No. 2016AP920)).
The physician was employed by Dean Health Systems, Inc. under a written employment agreement indicating that the physician was employed at-will and could be terminated at any time “without cause.” The Clinic terminated the employment of the physician after conducting an investigation regarding allegations of inappropriate conduct by the physician when interacting with patients. The physician argued that the Clinic had adopted a “management policy” that described the procedure that would be followed by the Clinic when investigating conduct of an employee, and that such policy should supersede the at-will employment provision in the employment agreement. The argument was made that the Clinic violated the management policy when it failed to properly comply with all aspects of the policy and that the policy created a duty of good faith and fair dealing when considering the termination of an employee.
The ultimate conclusion of the Court of Appeals was that the management policy did not supersede the employment contract and did not modify the right of the Clinic to terminate the employee under the at-will provision. The Court of Appeals reaffirmed the at-will employment rule holding that “at-will employees are terminable at will, for any reason, without cause and with no judicial remedy.” The Court of Appeals did acknowledge that an employment at-will provision could be modified under the “only when” rationale which holds that an employment-at-will relationship may be altered “only when” the management policy (as described in a handbook manual or procedure) contains express provisions from which it can be reasonably inferred that the parties intended to bind themselves to a different employment relationship other than the employment-at-will relationship. The Court held that the “only when” rule must be very clear in the management policy adopted by the company so that there was a definite intention to modify the at-will relationship by the adoption of such a policy.
The importance of this decision is a recognition of the employment-at-will relationship and a clarification of when that relationship may be altered by other actions taken by the company. The Court of Appeals also noted that there was no automatic good faith requirement when terminating an employee that is subject to an at-will employment provision in an employment agreement. Employers are again informed that an at-will employment provision is enforceable provided the employer has not adopted other policies or procedures that are designed to modify that relationship.
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