Wisconsin Supreme Court Clears The Air: Disability Discrimination Claims Under State Law Require Evidence of Employer’s Discriminatory Intent

The Wisconsin Supreme Court handed down a key decision last week in Wisconsin Bell, Inc. v. Labor and Industry Review Commission and Charles Carlson (June 26, 2018). The Court ruled that an employee must present evidence that his employer intended to discriminate against him based upon a disability to sustain a claim under the Wisconsin Fair Employment Act (“WFEA”).  In doing so, the Court explicitly rejected the Labor and Industry Review Commission’s (“LIRC’s”) “inference method” of finding discrimination where an employer disciplines or discharges an employee for misconduct that is arguably caused by a disability, without any evidence of the employer’s actual knowledge or intent.

What Happened in the Workplace

Charles Carlson worked for Wisconsin Bell as a Technical Support Representative in its call center, fielding calls from customers and field technicians to resolve phone, internet and TV service issues. Throughout the relevant time, he received treatment for a bipolar disorder, which caused him to experience symptoms of mania and depression for brief periods of time. While conducting a quality assurance check in February 2010, a manager observed Carlson deliberately hang up on at least 8 customer calls within a 10-minute time frame, and Carlson was suspended pending termination. During a review board hearing to challenge the suspension, Carlson presented two letters to Wisconsin Bell from his health care providers that described his disorder; neither letter drew a connection between his disorder and the actions that led to his suspension. Wisconsin Bell placed Carlson on a 50-day suspension without pay and informed him that he could request accommodation for his condition in the future if necessary. The Company also required Carlson to sign a last-chance agreement, in which he specifically acknowledged that future instances of customer-care neglect or mistreatment would provide just cause for his termination.

Shortly before that last chance agreement was set to expire, Carlson was involved in another customer care incident. In this instance, Carlson entered a “health” call-blocking code on his phone for approximately 38 minutes so that he would not receive incoming customer calls during a time when the Company was experiencing a heavy call volume. While blocking customer calls, Carlson chatted with 15 co-workers using Wisconsin Bell’s instant messaging system. Carlson subsequently left work for the day, claiming he was ill. After reviewing Carlson’s call-blocking code use and instant messages, Wisconsin Bell concluded that he had not really been ill but had used the health call-blocking code to avoid taking customer calls in direct violation of company policy and his last chance agreement. The Company suspended him pending termination. During a subsequent grievance hearing to appeal his suspension, Carlson stated that he used the health call-blocking code because he was upset after losing out on a promotion and used the instant messaging system to reach out to co-workers for support. Carlson also presented another letter from his health care provider regarding his bipolar disorder, but nothing in the letter connected the disorder to the latest instance of misconduct. Shortly after the grievance hearing, Wisconsin Bell terminated Carlson’s employment.

How Carlson Made Its Way to the Supreme Court

After his termination, Carlson filed complaints with the Equal Rights Division (“ERD”) claiming that he was suspended and then terminated based upon his disability. (Carlson also filed a retaliation claim, which he later withdrew). The Administrative Law Judge ruled in Carlson’s favor on both claims, concluding that Wisconsin Bell had discriminated against Carlson based upon his disability and failed to accommodate him in violation of the WFEA.

Wisconsin Bell appealed that decision to LIRC. LIRC reversed the ALJ’s decision as to Carlson’s suspension and accommodation claims. However, LIRC concluded that Wisconsin Bell violated the WFEA when it terminated Carlson’s employment. LIRC found that the Company was aware of Carlson’s bipolar disorder at the time of the termination, and that disorder caused the misconduct which led to Carlson’s termination. Therefore, the discharge was “in legal effect” because of Carlson’s disability.

Wisconsin Bell appealed LIRC’s decision to the Milwaukee County Circuit Court, which remanded the case to LIRC for further findings on the issue of whether Wisconsin Bell knew that Carlson’s misconduct was caused by his bipolar disorder at the time it decided to terminate his employment. Wisconsin Bell then appealed to the Wisconsin Court of Appeals. Affording great deference to LIRC’s initial decision, the Court of Appeals concluded that LIRC’s use of the “inference method” was reasonable, but that the employer must know of the causal link between the employee’s disability and the conduct that leads to the adverse employment action. Finding sufficient evidence that Wisconsin Bell was aware of this causal link, the Court of Appeals affirmed LIRC’s original decision. Wisconsin Bell filed a petition for review with the Wisconsin Supreme Court.

The Supreme Court Rejects LIRC’s “Inference Method” of Proving Disability Discrimination

In a striking decision, notable for its explicit rejection of LIRC’s long-standing “inference method” of analysis, the Supreme Court reversed the decision of the Court of Appeals and dismissed the Carlson case in its entirety. At the outset, the Court confirmed that an employee can only prevail on a disability discrimination claim if he shows that he was terminated “because of” a disability; this requires evidence that the employer acted with discriminatory intent. However, LIRC’s “inference method” allows a finding of discrimination where an employer takes action against an employee based upon conduct that is caused by a disability, without requiring any evidence that the employer actually knew of the causal connection between the disability and the conduct. This, the Supreme Court found, is the fatal flaw in the LIRC analysis, as it is entirely inconsistent with the employee’s burden to prove intent under the WFEA. The Court explained that “excusing an employee from proving the employer’s knowledge of a causal connection allows LIRC to find intentional discrimination where there is no proof of it.” The Court specifically concluded that “an employer does not engage in intentional discrimination when it bases an adverse employment action on the employee’s conduct unless the employee proves the employer knew his disability caused his conduct.”

Reviewing the facts of the Carlson case against this legal framework, the Supreme Court found that as of the date on which Wisconsin Bell terminated Carson’s employment, there was no substantial evidence that it knew that Carlson’s bipolar disorder caused his misconduct. The Court emphasized that it is the employer’s intent at the time of the adverse action that must be reviewed, and this intent can only be determined based upon facts available to the employer at that time of its decision; it cannot be based on an employee’s bare assertions of causation or evidence brought forth after the fact, with the benefit of hindsight. Absent any evidence that Wisconsin Bell knew Carlson’s disability caused his misconduct when it decided to terminate, Carlson could not show the necessary discriminatory intent to sustain a claim under the WFEA.

What Can Employers Learn from the Carlson Case?

Only time will tell how LIRC and lower courts will interpret the details of the Carlson decision.  However, the Supreme Court’s view on the need to prove discriminatory intent in disability discrimination cases under the WFEA is clear. Wisconsin employers retain the right to discipline or discharge all employees for poor performance, unacceptable behavior or misconduct, as long as there are no facts available at the time of the decision to suggest that an employee’s behavior or misconduct is caused by a disability. Although the Carlson case provides clarity and greater certainty in this area, employers are well-advised to consult with legal counsel when making employment decisions that affect employees with known disabilities.