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Repudiation Case Analysis

In the wake of the decision, municipal employers would be well-advised not to refuse to submit grievances up the chain as a tactic in the "give and take of day to day labor relations."

In this case, the only sanction against the department was attorney’s fees and costs. However, courts can award up to either 50 percent increased wages, or 100 percent increased wages, depending on the circumstances. In addition, there is a potential for criminal liability.

A question not presented in the case, but providing interesting food for thought is whether the employees’ compliance with the notice of claim statute, sec. 893.80(1), was necessary.

Traditionally, the statute was limited to tort claims, but was extended to all claims against municipalities in DNR v. City of Waukesha, 184 Wis.2d 178, 515 n.W.2d 888 (1994). Since then, however, DNR v. Waukesha has been distinguished in many cases where compliance with both the notice of claim requirement and a short statute of limitations would be chronologically impossible.

The statute of limitations under Chapter 109 is two years, so that is not the case here. However, in a recent court of appeals decision (recommended for, but still pending a decision on publication), Nesbitt Farms, LLC, v. City of Madison (No. 02-2212) 2003 WL 21027117, decided May 8, 2003), the court held that chronological impossibility is not a prerequisite for escaping the notice of claim requirement.

In Nesbitt Farms, the court permitted a property owner to challenge the amount of compensation it received from the city in a takings case, even though the statute of limitations was (as it is here) two years. Were Nesbitt Farms to be published, a strong case could be made that municipal employees making wage claims need not comply either.

Nesbitt Farms modified the three-factor test of Town of Burke v. City of Madison, 225 Wis.2d 615, 593 N.W.2d 823 (Ct.App.1999), as follows: whether there is a specific statutory scheme for such actions; whether enforcement of the notice of claim requirement would hinder a legislative preference for prompt resolution or efficiency and consistency; and whether the purposes of sec. 893.80(1) would be furthered by requiring a notice of claim.

Looking at the first factor, clearly, Chapter 109 qualifies as a specific statutory scheme, just as Chapter 32 does for condemnation actions.

Looking at the third factor, the purposes of sec. 893.80(1) would not be furthered by the notice of claim statute, just as in Nesbitt Farms.

In Nesbitt Farms, the court noted that the city could not reasonably claim that it required advance notice of a lawsuit in order to investigate and settle the claim, because the city had initiated the taking.

In the case at bar, a similar consideration applies. The employees had already submitted a grievance that the city refused to consider. The department could not reasonably argue that it needed more time to investigate the claim.

The interesting factor is the second. Because the statute of limitations is two years, prompt resolution of the claim is not a consideration that would necessarily be thwarted by requiring a notice of claim, nor would efficiency or consistency.

In Nesbitt Farms, the court noted that, where there is more than one party to a condemnation action, the notice of claim requirement would be unworkable.

In Chapter 32 actions, additional parties with an interest in the property at issue who wish to join a court challenge to the taking must do so within 10 days of receiving notice.

Because it would be chronologically impossible for those parties to both file a notice of claim and timely join the suit, the court in Nesbitt Farms concluded that enforcement of sec. 893.80(1) would hinder Chapter 32 claims, and both original plaintiffs and intervening plaintiffs should be exempted from it.

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Repudiation excuses
exhaustion of remedies

In the case at bar, no such similar considerations are present. The notice of claim requirement could be enforced without foreclosing any other party’s claims.

Nevertheless, employees do have statutory authority to support a claim that the notice of claim statute would thwart a legislative preference for prompt resolution of claims.

Section 109.03(1) provides that wages should be paid within 31 days after performance.

In addition, sec. 109.11(2)(a) provides that, if an employee files a wage claim before the DWD completes its investigation of a complaint, up to a 50 percent increase in wages is permitted. However, subsection (2)(b) permits a 100 percent increase if the employee must file an action after the investigation is completed.

None of these provisions is necessarily eviscerated by requiring an employee to file a notice of claim before bringing suit. Nevertheless, these provisions do evidence a very strong legislative preference that due wages should be paid promptly, a preference thwarted by the notice of claim requirement.

This is especially true in a case such as this, where the employer has already rejected a grievance by the employees, and thus, filing a notice of claim would plainly be an exercise in futility.

— David Ziemer

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David Ziemer can be reached by email.

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