Arrest and conviction record discrimination is unlawful in Wisconsin. Wisconsin employers may consider a pending charge (but not an arrest that is no longer pending) or a conviction only if the pending charge/conviction is "substantially related" to a job. Over the last several years, the "substantial relationship" defense has almost constantly taken twists and turns, and it has just taken another. In a decision dated October 11, 2012, the Wisconsin Labor and Industry Review Commission (LIRC) reversed an administrative law judge’s ruling that the circumstances of an employee’s alleged crime of sexual abuse of a minor were substantially related to the circumstances of his job as Deputy Director of Operations and Maintenance at General Mitchell International Airport. LIRC concluded that the employee’s suspension from employment was unlawfully based upon his arrest record, in violation of the Wisconsin Fair Employment Act (WFEA). However, LIRC found that the employee would have been terminated anyway once the employer found offensive and pornographic material in his computer. Consequently, LIRC only awarded the employee a cease and desist order and reduced attorney’s fees, but did not order his reinstatement.

Unbeknownst to the employer, the employee, Kenneth Kraemer, allegedly corresponded with his girlfriend via email from his work computer. His girlfriend sent him numerous pornographic and sexually-explicit emails both to his personal email account and his work email account. In February of 2007, Kraemer was arrested related to allegations of sexually abusing a minor, physically abusing a minor, and having child pornography stored on his computer. The employer placed Kraemer on suspension. As part of its investigation of the charges, the Milwaukee Police Department took possession of Kraemer’s work computer. Although the Police did not find child pornography, they suggested to the employer that it take a look at what was stored in the computer. The employer found numerous pornographic images and evidence that Kraemer had been using his work computer to set up sexual encounters. Kraemer’s supervisor, Barry Bateman, met with him and told him that he was being terminated. Bateman told Kraemer that the reason why he was being terminated was because the County was pressuring Bateman to terminate Kraemer. Bateman told Kraemer that if the charges against him were eventually dropped, he would try to get him reinstated.

In Kraemer, LIRC found that there was no dispute that Kraemer was never charged with a "crime." Consequently, LIRC found that the "substantial relationship" defense was not available to the employer. This is the "wrinkle" in the Kraemer case. An employer can only use the substantial relationship defense where there is a pending charge for a "crime." The statutory definition of "arrest" includes law enforcement contact for non-crimes, and is broader than what most people would imagine. Hence, although Kraemer was arrested, LIRC held that since he was never "charged," he had no "pending" charge, and so the substantial relationship defense was unavailable.

Even if Kraemer had been charged with a crime, the LIRC held that there was no substantial relationship between the allegations against Kraemer and his job. LIRC noted that there was no record evidence that Kraemer had contact with the general public, "let alone with children."

LIRC concluded that Kraemer’s suspension and termination were actually motivated by his employer’s fear of the stigma and scandal that could arise from his arrest and the nature of the allegations against him. LIRC based this conclusion on what Kraemer’s supervisor said when terminating him, as well as on the fact that the decision to terminate Kraemer was made before his employer found pornography on his work computer. LIRC concluded that the rationale for these employment actions was unlawful discrimination under WFEA.

However, LIRC concluded that this was a mixed-motive case, because the employer had learned of Kraemer’s myriad violations of its Use of Technologies Policy while Kraemer had been suspended. LIRC believed that the employer was genuinely concerned about these violations and would have eventually terminated Kraemer independent of his arrest record. Based on prior LIRC authority in cases when an employee is terminated because of both permissible and impermissible motivating factors, the only remedy awarded to Kraemer was a cease and desist order and attorney’s fees. The attorney’s fees awarded to Kraemer were reduced by 25%, given his partial success.

LIRC’s decision in Kraemer shows that, in arrest/conviction cases, LIRC will scrutinize the employer’s stated reason for termination, even if valid, and will work off of the assumption that the employer was mainly concerned with the stigma presented by the employee’s arrest. Lesson one of Kraemer is this: even if you have a valid, lawful reason for an employment action, understand that LIRC will suspect that your "real" motivation was unlawful. Accordingly, scrupulously avoid any appearance of concern over a person’s "record" or stigma attached to their "record."

Second, the decision should also make employers aware that the definition of "arrest" is broader than the definition of "crime" for WFEA purposes. The substantially-related defense is only available for criminal activities or pending criminal charges. Thus, if an employee is arrested for a non-criminal offense or is never actually charged with a crime, the employer cannot lawfully act on the offense, regardless of whether or not it is substantially related to his or her job. Employers in this circumstance should seek legal counsel. Another defense is potentially available in these circumstances. Employers can conduct their own investigation, usually by interviewing the accused employee. If the employer bases its decision on the employee’s admitted behavior, the employer’s decision may be lawful under Wisconsin law. This is called the "Onalaska" defense, named after a case involving the City of Onalaska. The LIRC has taken a narrow and crabbed view of the Onalaska defense as well, and employers should consult counsel before using this defense.