Truthful Information is a Defense to Tortious Interference Claims in Wisconsin

January 20, 2017

Unlike claims filed under most employment laws, claims for tortious (wrongful) interference with a contract can be filed against coworkers and supervisors. In a recent case, the 7th Circuit held that providing information that is substantially truthful cannot constitute unlawful interference.

Facts

Steven Wesbrook was employed by Marshfield Clinic Research Foundation. He was the deputy director and reported to Dr. Humberto Vidaillet, the foundation’s director. The foundation is one division of Marshfield Clinic, a healthcare system headquartered in Marshfield. Dr. Carl Ulrich was the president and CEO of Marshfield Clinic and a member of its board of directors. Although Wesbrook got along well with Vidaillet, he was involved in a number of run-ins with Ulrich over the years.

During Wesbrook’s time as deputy director, various employees raised a number of concerns about him. In March 2010, an employee told Marshfield Clinic’s HR director that Wesbrook and Vidaillet had made derogatory statements about foundation scientists, which prompted some scientists to resign. Another employee informed the foundation’s board of trustees that 15 scientists had left since 2006, the year Wesbrook was hired as deputy director. Marshfield Clinic’s board of directors asked HR to investigate why the 15 scientists had left and determine whether there was a “culture of intimidation” at the foundation.

The HR director investigated the concerns and spoke to nine of the 15 scientists who had left the foundation. During the meetings with the scientists, Wesbrook’s management style was described as cold, harsh, retaliatory, abusive, negative, hostile, and confrontational. During the investigation, other employees brought concerns about Wesbrook to Ulrich’s attention and described his management style as oppressive and retaliatory. One scientist described him as intimidating and vindictive and blamed him for creating a “toxic” environment.

Ulrich scheduled a meeting with Wesbrook in early September 2010 to discuss his management style and the possible consequences of his behavior. Ulrich notified Vidaillet of his intentions for the meeting, and Vidaillet told Wesbrook to take the day off, which he did. Ulrich terminated Wesbrook’s employment because of the complaints about him and his absence from the meeting. That decision was overruled by a 9-8 vote of Marshfield Clinic’s board of directors, and Wesbrook was reinstated as deputy director several days later.

Not surprisingly, complaints about Wesbrook’s management style continued to be brought to the attention of the HR director. The complaints included allegations of micromanagement and retaliation.

In November 2011, a research administrator who reported to Dr. Edward Belongia, a senior research scientist and research center director, resigned from the foundation, saying her frustration with Wesbrook was a key factor in her decision to leave. Belongia sent Ulrich a letter identifying four categories of concerns with Vidaillet’s and Wesbrook’s leadership of the foundation. Belongia wrote that several scientists and staff members had expressed their frustration to him in confidence, while others had “already filed complaints with human resources regarding the deputy director.” Belongia stated that Wesbrook used “coercion and intimidation in his interactions with scientists and administrators.” He claimed that he could “provide specific examples” and that other employees could “corroborate this and provide other examples.”

In the summer of 2011, at Ulrich’s direction, Marshfield Clinic’s process improvement group evaluated the time Vidaillet was committing to the foundation as director. During the evaluation, several employees volunteered complaints about Wesbrook, including retaliation and his creation of a hostile work environment. In September 2011, Marshfield Clinic’s board of directors reviewed the findings and directed Vidaillet and Ulrich to jointly develop a performance improvement plan (PIP) for Wesbrook.

Following the meeting, Ulrich worked with Pauline Pritzl, an HR manager, to draft a PIP for Wesbrook. Ulrich and Pritzl presented a draft to Vidaillet, who disagreed with it. Vidaillet then drafted his own version, which he presented to Ulrich and Pritzl. Ulrich stated that only one PIP would be implemented, so he asked Pritzl to incorporate relevant sections of Vidaillet’s proposal into their own draft. The integrated document was forwarded to Wesbrook.

In December 2011, Ulrich, Pritzl, Vidaillet, and Wesbrook met to review the PIP. Wesbrook handed out a memorandum in which he responded only to the concerns identified in Vidaillet’s version of the plan. At Ulrich’s request, several HR professionals reviewed Wesbrook’s memorandum and agreed it was not an appropriate response. The following day, Ulrich informed Wesbrook that he either could resign or be terminated. He then placed Wesbrook on administrative leave pending board review.

Ulrich drafted a chronology outlining Wesbrook’s troubled history as deputy director, including his conduct during the performance improvement process. A copy of the chronology and Belongia’s November 2011 letter was sent to Marshfield Clinic’s board of directors. After reviewing the documents and other submissions, the board voted 13-2 to support Ulrich’s decision to terminate Wesbrook’s employment. Wesbrook was fired on January 2, 2012

Tortious interference claim

Wesbrook subsequently filed a lawsuit in federal court accusing Ulrich, Belongia, and two other former colleagues of tortiously interfering with his employment with Marshfield Clinic. After various legal proceedings, the allegations against Ulrich and Belongia were narrowed to a claim for tortious interference based on four statements Ulrich provided to the board of directors:

  1. Wesbrook coerced foundation employees under his supervision.
  2. Foundation employees filed complaints against Wesbrook.
  3. Wesbrook breached the PIP.
  4. A prominent supporter of Marshfield Clinic spoke with more than 40 people associated with the organization and the foundation, and many of them complained about Wesbrook.

In his complaint, Wesbrook alleged Ulrich and Belongia sustained a campaign to have him fired by making false and defamatory statements and taking action to interfere with his employment contract. Ulrich and Belongia requested summary judgment (dismissal without a trial). The district court granted their request and dismissed the claims. Wesbrook appealed.

7th Circuit’s analysis

In conducting its analysis of the case, the 7th Circuit noted that a claim for tortious interference with a contract requires proof of five elements:

  1. There was a contract or a prospective contractual relationship with a third party.
  2. The defendant interfered with the relationship.
  3. The interference by the defendant was intentional.
  4. There was a causal connection between the interference and the damage.
  5. The defendant was not justified or privileged to interfere.
  6. The court noted that Wisconsin law recognizes a key exception to the ordinary multifactor inquiry regarding privilege. If a claim for tortious interference is based on statements that are true, it will fail. Essentially, individuals have a legal privilege to communicate truthful information. Communication of truthful information does not constitute improper interference with a contract and cannot subject an individual to liability for tortious interference with a contract or prospective contract.

The court made clear that while an individual’s motive is often relevant in deciding whether he tortiously interfered with a contract, motive is irrelevant when the individual spoke the truth. Therefore, the publication of truthful information is not interference, regardless of motivation. The court went on to say that a statement may be substantially true—and therefore privileged— even if there is room to argue about its literal truth. The 7th Circuit noted that while it was not aware of any precedential Wisconsin court decisions that explicitly extended substantial truthfulness as a defense to tortious interference claims, it saw no reason the principle would not apply in tortious interference cases as it does in defamation cases.

The court went on to analyze the statements made by Ulrich and Belongia to determine whether they were true or at least substantially true. The court made short work of determining that the four statements Ulrich provided to the board of directors were true or at least substantially true. For example, while conceding that he may have intimidated his coworkers, Wesbrook claimed he never coerced them. The court noted it would not split hairs so finely. It emphasized that tort law does not demand such artificial precision in the ordinary use of language. It found that the statement that Wesbrook used coercion and intimidation was at least substantially true. Thus, the statement was privileged.

Similarly, the court did not agree with Wesbrook splitting hairs and denying that staff had already filed complaints with HR (as opposed to having complained to HR). After finding no evidence that Ulrich had ever asserted that Wesbrook had failed to comply with his PIP, the court ruled that Ulrich had truthfully communicated that Wesbrook’s response to the proposed PIP was deficient. Finally, the court stated the Marshfield Clinic supporter’s letter Ulrich provided to the board did not contain untruthful material statements. The court found the distinction unpersuasive. Therefore, the court upheld the district court’s grant of summary judgment in favor of Ulrich and Belongia.

Bottom line

Even in tortious interference cases in which coworkers and supervisors can be defendants, raising truthful or substantially truthful concerns about a coworker or subordinate should not subject the speaker to liability. So long as the statements are substantially true, liability should not result, no matter the motives underlying the statements

This article, slightly modified to note recent updates, was featured in the December 2016 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.

For more information about "Truthful Information is a Defense to Tortious Interference Claims in Wisconsin," contact Michael J. Westcott at mwestcott@axley.com or 608.283.6722.