Arrested Development: Wisconsin Court of Appeals Holds ‘Arrest Record’ Does Not Include Civil Violations

Quick Hits

• The Wisconsin Court of Appeals recently issued a decision reversing a lower court, finding that two brothers who had been cited for municipal theft and whose employer had subsequently discharged them were not protected by the WFEA’s prohibition on arrest record discrimination.
• The court held that noncriminal offenses—i.e., civil offenses or violations for which incarceration is not a potential penalty—are not covered by the WFEA’s protections against arrest record discrimination.
• Following the Wisconsin Court of Appeals’ decision—which is subject to potential review by the Wisconsin Supreme Court—adverse employment action based on an individual’s arrest for a civil offense will no longer be grounds for a claim of unlawful employment discrimination under the WFEA.

Background

The case of Oconomowoc Area School District v. Cota involved two brothers who worked for the Oconomowoc Area School District in grounds crew positions. The brothers allegedly took scrap metal from the school district to a metal scrapyard and were paid money for that scrap metal. The brothers retained the money and did not remit it to the school district.

Eventually, the police investigated the brothers and issued them citations by the municipality for theft. The municipality’s attorney informed the school district that the municipality believed that the brothers were guilty of theft but had agreed to drop the citation if the brothers agreed to pay restitution to the school district. The brothers agreed to the deal and paid the restitution to the school district.

Shortly after the restitution deal was reached, the school district terminated the brothers’ employment based on the issuance of the municipal citations for theft and the municipality’s attorney’s representation that he believed the brothers were guilty. The brothers filed a complaint under the Wisconsin Fair Employment Act (WFEA) that their employment was unlawfully terminated because of their arrest records.

After a hearing before an administrative law judge, the Labor and Industry Review Commission (LIRC) and then the circuit court ruled that the school district had violated the WFEA by terminating the brothers’ employment based on the issuance of municipal citations for theft, the municipality’s attorney informing the school district that he believed he could prevail at trial, and the agreement to pay restitution. LIRC’s and the circuit court’s decisions relied on a conclusion that municipal citations issued for theft constitute arrest records under the WFEA. Therefore, the circuit court and LIRC concluded, the school district’s termination decision was unlawful under the arrest record discrimination provision of the WFEA. The school district appealed.

The Court of Appeals’ Reasoning

The court of appeals reversed, holding that a municipal citation for theft was not protected by the WFEA, and dismissed the complaint against the school district. The court of appeals’ lead opinion concluded that the phrase “other offense” must be consistent with the statutory terms immediately preceding it, which describe criminal violations (i.e., where incarceration is a potential penalty): “any felony, misdemeanor or other offense.” Therefore, a noncriminal offense (i.e., an offense, such as a municipal citation for theft, for which incarceration is not a potential penalty) is not covered by the WFEA’s protections against arrest record discrimination. On February 9, 2024, LIRC filed its petition for review to request that the Wisconsin Supreme Court review the court of appeals’ decision.

Key Takeaways

Wisconsin is one of a minority of states that prohibit discrimination against employees and applicants on the basis of arrest and conviction records. A potential discrimination claim can arise when an employer makes an adverse employment decision based on the contents of a background check, as well as when a company learns of an employee’s arrest or involvement in a police investigation. However, the Wisconsin Fair Employment Act includes a defense for the employer when a pending arrest or a conviction substantially relates to the job.

Cota is yet another recent development in Wisconsin arrest and conviction record discrimination case law. Two years ago, the Wisconsin Supreme Court ruled that the “substantially related” defense did not include a domestic violence exception. In 2022, in the Vega v. Preferred Sands decision, the Wisconsin Court of Appeals ruled that deferred prosecution agreements constituted arrest records, but not conviction records, for the purposes of the WFEA. This conclusion allowed the employer to independently investigate the facts of the offenses and base an adverse action on its conclusions from that investigation. Employers may welcome the Wisconsin Court of Appeals’ holding in Cota as narrowing the definition of what qualifies as an arrest record sufficient to raise the antidiscrimination protections of the WFEA.

Until Cota, no appellate court in Wisconsin had interpreted the WFEA provision that prohibits discrimination against an employee or applicant based on “an individual … [being] 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.” Wis. Stat. § 111.32(1) (emphasis added).

Prior to the Cota decision, the Wisconsin Department of Workforce Development’s Equal Rights Division and LIRC had consistently held that the phrase “other offense” covered noncriminal offenses that were charged by a municipality or could result in a civil fine or forfeiture, as opposed to solely criminal offenses charged by a district attorney’s office. Following Cota, arrests for civil offenses—including those related to alcohol and the operation of motor vehicles in Wisconsin—will no longer be a basis for an individual to claim discrimination under the Wisconsin Fair Employment Act.

Wisconsin employers may want to take note of this change to their compliance obligations under the WFEA. Determinations regarding whether an offense is criminal or noncriminal (i.e., civil) under Wisconsin law are important to fully understanding the antidiscrimination protections (or lack thereof) provided by the WFEA to employees and applicants.

Ogletree Deakins’ Milwaukee office will continue to monitor developments and will publish updates on the Background Checks and Wisconsin blogs as additional information becomes available.

Further information is available in the Ogletree Deakins Client Portal in the Use & Evaluation – Arrests, Use & Evaluation – Convictions, and Miscellaneous Background Checks law summaries. (Full law summaries are available for Premium-level subscribers; Snapshots and Updates are available for all registered client-users.) For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

Follow and Subscribe

LinkedIn | Instagram | Webinars | Podcasts