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Wisconsin Supreme Court Tackles Thorny Contours of Arrest Record Discrimination
At a Glance
- Wisconsin Supreme Court took a broad view of what constitutes an arrest record for purposes of the state’s employment discrimination law.
- Applicants and employees with non-criminal arrests can be protected under the anti-discrimination provisions, and exceptions to the law’s protections are likely to be interpreted narrowly.
In a recent case, Oconomowoc Area School District v. Cota, the Wisconsin Supreme Court examined the definition of “arrest record” and the circumstances under which employers may lawfully consider arrest records in making employment decisions. As a practical matter, the decision is likely to increase the risk of employment claims by individuals subject to adverse employment actions in connection with arrest records in Wisconsin, though the case involved unique facts that may not apply in many situations.
Background of Existing Wisconsin Law on Arrest Record Discrimination
The Wisconsin Fair Employment Act (WFEA) generally prohibits employers from discriminating against applicants and employees on the basis of their arrest and conviction records.1 It also generally prohibits employers from requesting information about an arrest record unless the arrest record is a pending charge.2 Nevertheless, the law specifically allows employers to “refuse to employ . . . or to suspend from employment . . . any individual who is subject to a pending criminal charge if the circumstances of the charge substantially relate to the circumstances of the particular job.”3 In addition, preexisting case law in Wisconsin, City of Onalaska v. LIRC, 120 Wis. 2d 363, 354 N.W.2d 223 (Ct. App. 1984), had held that an employer that concludes from its own investigation that an employee has committed unlawful conduct and terminates the employee as a result of its own investigation does not engage in unlawful arrest record discrimination.4
Background Facts of the Oconomowoc Area School District Case
The employees at issue were members of the School District’s grounds crew and, as part of their duties, recycled scrap metal for the School District. The employees, along with a coworker, brought scrap metal to a local processor, which paid with cash or checks made out to “cash.” Their coworker reported that, approximately, two years prior, he and the employees delivered scrap metal to the processor but had kept the payment and split the money among themselves, i.e., they stole from the School District.
The School District undertook an internal investigation into the alleged theft, but was unable to determine whether the employees were responsible for the missing funds, and it did not take any adverse employment action against the employees at that time. Instead, the School District referred the allegations to local law enforcement. Ultimately, law enforcement did not uncover any new information implicating the employees. The employees were cited for municipal theft, which in Wisconsin is a non-criminal offense.
Approximately one year after the employees were cited for theft, an assistant city attorney informed the School District that he believed he could obtain convictions and that he also believed the case could be settled. The assistant city attorney proposed dismissing the citations against the employees in exchange for a $500 payment, which he characterized as “restitution.” The School District indicated that it supported the proposal, but the employees had not agreed.
The next day, the School District terminated the employees’ employment, claiming the School District had “learned” that the employees “were, in fact, guilty of theft of funds from the School District” and that they had lied about this during the School District’s internal investigation. The municipal citations against the employees were ultimately dismissed. The employees never pleaded guilty to or were convicted of municipal theft.
After their termination, the employees filed administrative agency complaints alleging arrest record discrimination. The Wisconsin Labor and Industry Review Commission (LIRC) ultimately concluded that the School District had unlawfully discriminated based on their “arrest records.” After the School District appealed, the circuit court affirmed the LIRC’s decision, finding it was supported by “substantial evidence.” The Court of Appeals reversed in the School District’s favor, and the Wisconsin Supreme Court then took up review of the employees’ appeal.
Wisconsin Supreme Court’s Analysis
The first issue to be decided was whether the employees’ municipal citation for theft was a qualifying “arrest record” under the WFEA’s definition entitling them to protection under the law.
The School District argued that the employees did not have an “arrest record” because they were cited only for municipal theft, which is a non-criminal offense in Wisconsin. The definition of a qualifying arrest record “includes, but is not limited to, information indicating that an individual has been questioned, apprehended, taken into custody or detention, held for investigation, arrested, charged with, indicted or tried for any felony, misdemeanor or other offense pursuant to any law enforcement or military authority.”5 The Wisconsin Supreme Court rejected the School District’s argument and held that the “any . . . other offense” language in the definition is broad enough to include alleged violations of both criminal and non-criminal laws. The conclusion was driven in part by the court’s observation that Wisconsin law “expressly authorizes arrests in in connection with non-criminal offenses” such as for traffic violations. Thus, the Supreme Court held that the WFEA’s “arrest record” discrimination protections apply to people arrested in connection with non-criminal matters, for example, municipal citations and non-criminal traffic offenses.
The second issue to be decided was whether the School District terminated the employees because of their “arrest record” under the unique circumstances of the case.6 The School District argued that it terminated the employees’ employment because of the conclusions from its own internal investigation, not because of their arrest records, and therefore the termination decisions were lawful. The School District’s argument was based on Onalaska. The Wisconsin Supreme Court found the so-called Onalaska defense inapplicable, however, after determining that substantial evidence supported the conclusion that the School District was not motivated to act by its internal investigation. The court found compelling, among other things, that the School District had earlier concluded its internal investigation without being able to find that the employees had stolen, and that the only new events that had occurred thereafter—the municipal theft citations and the assistant city attorney’s statements that he believed he could convict the employees and that he anticipated reaching a settlement—were part of the employees’ “arrest records,” not the School District’s own internal investigation. Therefore, the Wisconsin Supreme Court affirmed the determination that the School District had violated the state’s arrest record discrimination protections in terminating the employees.
What this Means for Employers
The Oconomowoc Area School Districtdecision serves as a stark reminder that Wisconsin employers addressing situations involving applicant or employee arrest records should proceed cautiously. After the decision, it is clear that even applicants and employees with non-criminalarrests can be protected under the law and that exceptions to the law’s protections are likely to be interpreted narrowly. When Wisconsin employers rely on their own independent investigations of the underlying facts related to arrest records or pending criminal charges to make employment decisions, they must be cognizant of the substantial scrutiny LIRC and Wisconsin courts often place on such assertions. Employers should consider reviewing their practices related to the handling of such matters in Wisconsin to ensure that they can appropriately defend their employment decisions if challenged.
