On April 10, 2025, the Wisconsin Supreme Court issued a decision in Oconomowoc Area Sch. Dist. v. Cota, 2025 WI 11, in which it held that the prohibition against discrimination on the basis of arrest record under the Wisconsin Fair Employment Act (WFEA) includes non-criminal offenses. Notably, the Court reversed the Wisconsin Court of Appeals’ decision, which was the subject of a previous legal update. The Court’s decision, although clarifying a long-standing question, led to an unusual result for the school district.
Facts
An employee reported that two employees were stealing money from the school district related to recycled scrap metal. The school district investigated it and concluded that funds were missing but could not pinpoint who was responsible. The school district then reported the matter to police and decided to hold off on any disciplinary action until after the conclusion of the criminal investigation. Ultimately, the police did not find any additional evidence to show that the employees were responsible. However, the police issued citations for municipal theft, which is a non-criminal offense, based on the same information that had given rise to the school district’s investigation. A year later, a local prosecutor informed the school district that he believed he could obtain convictions and that settlement with a restitution payment may be possible. The school district then terminated the employment of the two employees. In the termination letters, the school district stated it learned the employees “were, in fact, guilty of theft of funds.” However, the citations were later dismissed with no plea or conviction.
Procedural History
The employees brought claims against the school district for arrest record discrimination under the WFEA. An Administrative Law Judge for the Department of Workforce Development, Equal Rights Division, found in favor of the school district, but, on appeal, the Labor and Industry Review Commission (LIRC) reversed, deciding that the school district had discriminated against the employees based upon their arrest records in violation of the WFEA. The school district pursued judicial review before the circuit court, which affirmed LIRC’s decision. The school district then appealed to the Wisconsin Court of Appeals, which reversed the circuit court’s decision and held that “arrest record” includes only information related to criminal offenses.
Wisconsin Supreme Court Reasoning
Reviewing LIRC’s decision, the Wisconsin Supreme Court explained that under the WFEA “arrest record” includes “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.” Wis. Stat. § 111.32(1). The Court then considered whether “any…other offense” includes non-criminal offenses.
In doing so, the Court applied the common and ordinary meaning of the term “offense,” which was “an infraction of the law,” or “a transgression of law; a crime.” The Court reasoned that including non-criminal offenses in the definition was consistent with how the term “offense” was used elsewhere in the statutes. It further reasoned that the inclusive—rather than limiting—statutory language supported a finding that it was intended to cover non-criminal offenses and that this would also be consistent with the purpose of the WFEA. Lastly, the Court examined the exceptions for conviction record discrimination and concluded that the statutory text supported a finding that the WFEA’s prohibition against arrest record discrimination includes both criminal and non-criminal offenses.
Holding
The Court answered the long-standing question that “arrest record” under the WFEA includes non-criminal offenses, like a citation for municipal theft or a forfeiture for a first offense OWI.
As to the merits of whether the school district discriminated against the employees in this particular case, the Court upheld LIRC’s determination and rejected the school district’s defense that its termination decision was motivated at least in part by the findings of its own internal investigation (known as the “Onalaska defense”). Specifically, the Court upheld LIRC’s finding that although the school district believed that the employees may have stolen money based upon its own internal investigation, it was not “persuaded of that conclusion to the point of being motivated to act” until the prosecutor’s statements regarding obtaining a conviction or a settlement.
After explaining the holding of Onalaska, that “an employer who does not rely on arrest-record information when making a discharge decision does not discriminate against an employee because of their arrest record[,]” the Court concluded that Onalaska did not apply because the school district did rely on arrest record information in deciding to terminate the employees’ employment.
Conclusion
Although the Court’s interpretation of the statute is helpful in answering a long-standing question, the facts of the specific case led to an odd result. Employers faced with similar circumstances should carefully examine the Onalaska defense when making a termination decision to avoid the result that occurred in this case.
