State fair employment claims are not barred by federal action

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Previously filing a discrimination claim with the EEOC doesn’t bar a state claim under the Wisconsin Fair Employment Act (WFEA).

Joyce Aldrich resigned after being demoted by her employer, Best Buy, Inc. She then filed charges with both the EEOC and the Equal Rights Division of the Wisconsin Department of Workforce Development (ERD), alleging both sex and age discrimination.

Pursuant to a work-sharing arrangement between the EEOC and ERD, under which the first agency to receive a claim processes it first, EEOC processed and dismissed Aldrich’s claim in January 2005.

Her subsequent federal lawsuit was unsuccessful, because the court concluded she failed to file the charge within 300 days of the alleged discrimination.

After losing in federal court, Aldrich asked the ERD to renew its investigation of her WFEA claims.

Although the ERD found probable cause, the administrative law judge and the Labor and Industry Review Commission dismissed the claims, concluding that the unsuccessful federal case barred the state claims under the doctrine of claim preclusion.

The circuit court reversed, and the Court of Appeals affirmed the circuit court on Mar. 18, in a decision by Judge Edward R. Brunner.

The court noted that the exclusive means of asserting a WFEA claim is through the ERD. Because federal courts would not have jurisdiction to consider Aldrich’s WFEA claims, the court held that the doctrine of claim preclusion cannot apply to them.

The court acknowledged that, in Schaeffer v. State Personnel Commission, 150 Wis.2d 132, 441 N.W.2d 292 (Ct.App.1989), it held that a federal court judgment did bar an employee’s handicap discrimination claims based on state law.

As in the case at bar, the employee in Schaeffer filed discrimination claims with both federal and state agencies. The state proceedings were stayed pending resolution of the federal action.

The Court of Appeals affirmed the grant of summary judgment to the employer, holding that the state claims were barred by the doctrine of claim preclusion.

However, after Schaeffer was decided, the Court of Appeals decided Parks v. City of Madison, 171 Wis.2d 730, 492 N.W.2d 365 (Ct.App.1992). There, the court held that, because the federal court declined jurisdiction over the state law claims, the doctrine did not apply.

In the case at bar, the court decided to follow Parks, rather than Schaeffer, reasoning that, in Schaeffer, the court was not presented with the argument adopted in Parks -– where a federal court would have declined jurisdiction over a state claim, the doctrine does not bar that claim.

Before concluding, however, the court added that parties can assert issue preclusion as a bar to relitigating individual issues in the state proceedings.

Analysis

Even though the holding in the case at bar is the same as in Parks, it is significant, because it cites both Parks and Schaeffer.

Apparently, when the Court of Appeals decided Parks, it was not aware of its previous holding in Schaeffer.

The court there stated that whether the dismissal of federal discrimination claims bars state law claims is “a question of first impression in Wisconsin.” Parks, 492 N.W.2d at 367-368. Nowhere in Parks does the court cite, distinguish, or even acknowledge the existence of Schaeffer.

Thus, lower courts, ALJs, and LIRC could reasonably have been unsure what law to apply in cases such as this. Previous decisions by LIRC have also barred WFEA claims because of federal court proceedings. See Rogers v. Wisconsin Knife Works, ERD Case No. CR200002066, EEOC Case No. 260990779.

With the opinion in the case at bar, however, which squarely acknowledges the conflicting precedents, the answer is now clear.

The decision also eliminates an illogical asymmetry that would exist if federal proceedings did bar state discrimination claims.

The Seventh Circuit long ago held that an unsuccessful state action under the WFEA is no bar to later litigating a discrimination claim in federal court. Brye v. Brakebush, 32 F.3d 1179 (7th Cir.1994).

Thus, it makes no difference whether a discrimination claim is first processed by a state or the federal agency.