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Jerold Mackenzie v. Miller Brewing

Summer 1997

The recent $26 million jury verdict in favor of Miller Brewing Company's former executive, Jerold Mackenzie, has generated a great deal of media attention, as well as confusion. It is our hope that this letter will answer some frequently asked questions concerning this case and its implications for you as a Wisconsin employer.

As you may have read, Mr. Mackenzie sued Miller Brewing Company for, among other things, fraud in connection with conduct by Miller which culminated in a decision to terminate his employment. The termination decision was allegedly prompted by an employee complaint concerning sexually offensive conduct. The facts presented to the jury suggested that Miller had been less than totally forthcoming to Mr. Mackenzie concerning his employment status before this incident and that Miller may have acted prematurely in terminating his employment. In any event, the jury returned a verdict against Miller and the female employee who had complained of his conduct.

We regard this case as an unusual one. It is very likely that this case will be appealed. And there are significant doubts as to whether this judgment will remain intact if appealed.

The following "lessons," however, can be drawn from the Miller case, regardless of its ultimate disposition:

- Employers still must promptly respond to sexual or other harassment complaints and, where such harassment is found to exist, take appropriate action. The Miller decision has not repealed the sexual harassment laws and the legal obligation of employers to provide an atmosphere free from sexual harassment.
- Before an employer takes any action as a result of a harassment complaint, it is essential to perform a thorough and impartial investigation. We encourage you to consult with a member of this Firm prior to undertaking such an investigation because the investigation will have a critical impact on potential employer liability.
- Employer liability risks for employment-related decisions will substantially increase if the employer can be viewed by a jury as "acting unfairly." For example, failing to clearly communicate a demotion decision may be problematic. Likewise, terminating an employee for poor performance has greater risks if performance expectations have not been previously communicated.
- Employees whose employment is adversely affected as a result of a company's investigation of a harassment claim may be encouraged by the Miller verdict. A thorough investigation, accordingly, has even greater importance.
- Employees with harassment claims may be more reluctant to raise such concerns as a result of the Miller decision. We recommend that employers have written harassment policies which invite employee complaints to supervisors, human resource administrators and other appropriate individuals.

Please do not hesitate to contact any of our offices should you wish to discuss the Miller case, issues respecting sexual harassment, or any other matters.


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