OCONOMOWOC — The Oconomowoc Area School District illegally fired men who were found to have stolen proceeds of scrap metal recycling, a divided Supreme Court ruled Thursday.
The opinion reversed a Court of Appeals opinion that itself reversed the findings of Waukesha County Circuit Judge Lloyd Carter. He upheld the ruling made by the state Labor and Industry Review Commission, which ruled in a July 2021 decision that the OASD improperly fired Gregory and Jeffrey Cota by taking into account that they were cited for the thefts after the district completed its own internal investigation that led to it suspending the men and a co-worker. After a later Town of Oconomowoc police investigation saw citations issued, the district fired the men.
The Cotas, who are brothers, and Garrett Loehrer, a co-worker, had accounts at a Waukesha recycling facility where they turned in scrap metals. The men were to give scrap proceeds to Greg Cota to give to his supervisor at the OASD. After the Cotas complained about Loehrer’s work performance, he reported in 2014 that he and the Cotas in 2012 delivered scrap for recycling. Greg Cota split the proceeds between them, with Loehrer getting $80, court records said. A district investigation found the scrap yard paid the men a combined $10,613 over three years, but only $4,929 was turned over to the district.
OASD Director of Human Resources Pam Casey investigated, and found that although $5,681 in scrap metal transactions were paid to Loehrer, the Cotas and others, she was unable to determine who was responsible for the missing funds. She recommended turning the investigation over to local police, which the district did, saying employment-related disciplinary decisions can be better made after any criminal investigation.
The Cotas were cited for municipal theft, and a year later, an assistant city attorney told the district he believed he could obtain convictions and the case could be settled by dismissing the citations in return for $500 in "restitution." The Cotas did not agree, and were fired the next day. The citations against the Cotas ultimately were dismissed and they were never convicted of municipal theft.
The LIRC ruled in July 2021 that because the district had used the men’s arrest records in its determination to fire them, it discriminated against them in violation of the Fair Employment Act, which bars legal history as a basis for considering employment. The LIRC ordered the men to be reinstated to their former positions or comparable ones, to receive back pay and full seniority rights, and attorney’s fees and costs of over $83,000.
The OASD appealed to the circuit court and in June 2022, Judge Lloyd Carter upheld the LIRC ruling. The state Court of Appeals District II reversed the ruling in January, ruling the Fair Employment Act, which prohibits firing people on the basis of "arrest records," does not apply to civil, municipal charges and returned the case to the LIRC for outright dismissal.
In its opinion Thursday, the majority of the court found the statute in question does apply to civil and noncriminal arrests, such as first-offense operating while intoxicated, and “any ... other offense.” Therefore, in considering the citations issued to the men, the OASD unlawfully discriminated against them on the basis of their arrest records when it fired then, the court ruled.
“Substantial evidence supports LIRC’s conclusion that the District was not motivated to act by its internal investigation, despite Casey’s testimony before (the Department of Workforce Development) that she formed a personal belief in the Cotas’ guilt during the investigation. … When referring the matter to the police for further investigation, the District’s attorney told the investigator that the District could not conclude who was responsible, and Casey testified before DWD that this was a true statement. Finally, Casey also testified that while she was suspicious of the Cotas during the internal investigation, she was not suspicious enough to fire them,” the court said. “Substantial evidence likewise supports LIRC’s conclusion that the District’s decision to terminate the Cotas was motivated by arrest record information. Before DWD, Casey testified that three new pieces of information came to her attention between the close of her internal investigation — when she was not ready to fire the Cotas — and her decision to fire them nearly two years later. That new information included: (1) that the Cotas were cited for municipal theft, (2) that the assistant city attorney told Casey he believed he could convict the Cotas, and (3) that the assistant city attorney told Casey he anticipated reaching a settlement with the Cotas that included restitution. And Casey admitted that these three pieces of information caused her to terminate the Cotas. All three are components of the Cotas’ arrest records. Accordingly, substantial evidence supports LIRC’s conclusion that the District was motivated by arrest-record information when it terminated the Cotas.”
The court clarified that that state law doesn’t preclude employers from firing employees with arrest records, but it does prohibit them from doing so because of those records. “The District thus did not lose its ability to terminate the Cotas by referring the matter to the police, and it remained free to terminate the Cotas after such a referral for any lawful reason. If the District in fact believed the Cotas were guilty independent of their arrest records, it could have terminated them because of that belief. But, as we have discussed, LIRC concluded that is not what happened here, and substantial evidence supports its conclusion,” the court said Alan Olson, attorney for the Cotas, said the Cotas were fired but were ordered by the circuit court to be reinstated pending appeal.
“This is an important decision for employees who are terminated because they were falsely accused of a crime and arrested,” Olson said. “They have incurred very significant additional expense through the appellate process to the Court of Appeals and Wisconsin Supreme Court. We will be petitioning for those additional fees and costs. It will be well north of $100,000 at this point.”
A call placed to Oyvind Wistrom, attorney for the district, was not returned Thursday.
Deciding in the majority were Justices Rebecca Dallet, Ann Walsh Bradley, Brian Hagedorn, Jill Karofsky and Janet Protasiewicz. In a concurring opinion, Protasiewicz said it was clear the Fair Employment Act also covers non-criminal offenses, and the LIRC found correctly that the OASD fired the Cotas because of their arrest records.
“So we are left a strange result. The District was the victim of an offense and suspected its employees did it. It could have fired the employees, but instead asked law enforcement to investigate. Because law enforcement investigated, the employees had an arrest record which limited the District’s ability to fire the employees. In the end, under today’s decision, the District may not fire the employees that it believes stole from the District,” she wrote. “Our statutes should not hamstring employers who are victims that way. An employer should be allowed to take employment action when it is the victim of an offense and suspects an employee did it, even when it relies on information from law enforcement. … I urged the legislature to address this unjust situation.”
Chief Justice Annette Kingsland Ziegler filed a dissenting opinion, saying, “The court’s decision sends a message to employers across the state: If the employer believes one of its employees may have committed a crime — say, stealing from that employer — based upon its own internal investigation, it should quickly fire the employee rather than have its suspicions confirmed by a full investigation by law enforcement. The court’s decision forecloses an employer from firing such an employee even when the employer’s suspicions about the employee’s conduct are confirmed by law enforcement’s investigation,” she wrote. “The majority’s conclusion flouts common sense and insists upon the unbelievable.”
Justice Rebecca Grassl Bradley also dissented, saying, “The record confirms the Cotas’ arrest records merely corroborated conclusions the employer had already drawn.”
