Mackenzie v. Miller Brewing Co.: 1997, 1999, 2000

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Mackenzie v. Miller Brewing Co.: 1997,
1999, 2000

Plaintiff: Jerold J. Mackenzie
Defendant: Miller Brewing Company and two Miller employees, Robert L. Smith and Patricia G. Best
Plaintiff Claim: Intentional misrepresentation, tortious interference with prospective contract, tortious interference with contract
Chief Lawyer for Plaintiff: Gerald P. Boyle
Chief Defense Lawyer: Frank J. Daily
Circuit Court Judge: Louise Tesmer
Appeals Court Judges: Ralph Adam Fine, Charles B. Schudson and Ted E. Wedemeyer, Jr.
Places: Milwaukee and Madison, Wisconsin
Date of Trial: June 27, 1997-July 15, 1997
Dates of Appeal: Oral arguments: August 18, 1999. Opinion filed: February 22, 2000
Verdict: Jury awarded Mackenzie $26.6 million: $24.5 million from Miller Brewing Co.; $1.5 million from coworker Best, and $601,500 from former supervisor Smith. Judge Tesmer set aside judgment against Best and reduced award to $24.7 million. Miller appealed the judgment to Wisconsin Court of Appeals, District I. Appeals Court reversed judgment with orders affirmed in part and reversed in part. Mackenzie has appealed to Wisconsin Supreme Court. Decision expected in 2001.

SIGNIFICANCE: This case ultimately hinged on the simple question: Do employers have the legal right to lie to employees? The Wisconsin Supreme Court has agreed to review the case, which involved a record damage award. The high court could clarify state tort law govering what obligations employers have or don't have to tell at-will employees the truth about their job status.

This case gained national attention as "The Seinfeld Case" because the plaintiff alleged in part that he was fired from Miller Brewing Company after discussing a risque episode of the television show with a female coworker. But during Jerold Mackenzie's complex five-year court battle, this aspect of the case was dropped early on. Mackenzie maintains, however, that the media frenzy surrounding the sexual harassment allegation labeled him a pervert and precluded job possibilities anywhere in the country.

In his suit, Mackenzie argued that Miller shabbily dismissed him without fairly investigating coworker Patricia Best's claim of sexual harassment. He claimed Best was fraudulent when she reported that Mackenzie's conversation about the Seinfield episode made her uncomfortable.

He also argued in his trial that Miller never told him about his 1989 demotion. Mackenzie claimed his boss lied to him about his job status. When a 1992 memo tipped him off about the secret demotion, Mackenzie claimed he was too old to find a new job, being past "marketable age." This argument became the heart of his case.

Mackenzie said that although he was unaware of his job downgrade, it prohibited him from moving up the corporate ladder. If he had known his gradelevel had been reduced, he would have left Miller at the time of the demotion. He suffered behind-the-scenes career sabotage and was summarily fired after Best's bogus sexual harassment complaint. Mackenzie argued that his firing was improper, Best was not harassed, and Miller was looking for an excuse to unfairly get rid of him.

Mackenzie v. Miller involved years of litigation, including a three-week jury trial, a 10,000-page record, more than 300 pages in briefs, national publicity, and nearly $25 million awarded in punitive damages, in part for being improperly fired. In his civil action, Mackenzie had sought damages for lost salary and benefits as well as for the salary he would have received had he become a director at Miller, his career goal. He asked for $9.2 million in compensatory damages.

Corporate Deceit or a Manager's Incompetence?

Here are the events that led to Mackenzie's suit against Miller:

Mackenzie joined Miller in 1974 when he was 31 years old, taking a grade 7 job. He moved often for the company and climbed the corporate ladder quickly. He reached grade level 14 by 1982. He was assigned to corporate headquarters in Milwaukee.

From 1984 to 1990, Miller experienced downsizing and mergers. In the process, Mackenzie's responsibilities were reduced. In 1989, his position was lowered to grade level 13. Mackenzie said he was not told of the downgrade. His benefits and perks had continued, apparently because his $95,000-peryear position had been "grandfathered" in 1989. Miller also considered him for additional management responsibilities during this period. But Mackenzie alleged that his boss, Robert Smith, sabotaged those chances for advancement by bad-mouthing him behind his back.

Mackenzie remained ignorant of his demotion until 1993 when a memo advised him that all "grandfathered" jobs would no longer receive the perks of the higher level. Mackenzie then realized that since he was in fact a grade 13, his goal of rising to grade level 15 was unreachable.

Mackenzie confronted Smith about the downgrading. Mackenzie claims Smith assured him that all was well with his executive job status.

On the morning of March 18, 1993, while conversing with Best, Mackenzie asked the distributor services manager if she had seen the previous night's Seinfeld episode. She said she had not. Mackenzie told of the plot in which Jerry Seinfeld could not remember his date's name, but that the name rhymed with a female body part. The date's name was Delores. Mackenzie challenged Best to guess the body part. She could not. He then copied a page from a dictionary that defined the body part and showed the copy to Best. Mackenzie expressed his outrage that the episode had passed censors. Best said she did not want to discuss the TV show further.

On March 24, Best told Mackenzie that he had stepped over the line. Mackenzie said he couldn't believe that Best, who he claimed often used vulgar language, would be offended. Best reported this conversation to Mackenzie's current boss, David Goulet.

On March 25, 1993, Mackenzie was "invited" to Miller's law library. There, two Miller attorneys confronted him about the conversation with Best. An hour later, Goulet escorted Mackenzie out of the building and told him never to return.

Soon after he was fired, Mackenzie began working indirectly for Miller under a contract with a corporate organization consultant, Michael J. Mazzoni of Boston. Mackenzie alleged that once Miller learned that he had contacted an attorney to sue Miller, the company forced him out of the contract.

Mackenzie's lawyer Gerald P. Boyle, who had defended serial murderer Jeffrey Dahmer, argued in Mackenzie's civil trial that top Miller officials were "out to get" his client. They used a false complaint by a devious coworker to fire him and ruin his reputation.

Miller's attorneys argued that Mackenzie had past problems with female employees. In 1989, after a secretary claimed that Mackenzie had made sexual advances toward her, Mackenzie settled out of court for $16,000. Miller also argued that Mackenzie had difficulties managing employees. After the 1989 harassment complaint, the company warned Mackenzie that any future problems would mean dismissal.

Boyle in turn claimed that Miller's failure to tell the truth ruined his client's chance to reach his coveted grade 15.

"To fail to tell a man is total and complete deceit," Boyle said. "And for that they must be made to pay."

In a damage award unprecedented in size in the state of Wisconsin, the jury in a unanimous verdict demanded Miller pay Mackenzie $25 million.

The Appeals Begin

Miller appealed the judgment to Wisconsin's 1st District Court of Appeals. The company alleged Mackenzie had failed to prove that anyone at Miller had lied to him. Moreover, Mackenzie, now 56, had not looked for a job since his dismissal.

In 1998, Mackenzie and his wife Bonnie moved to Washington State, where he eventually found work with a Seattle construction company.

In a 2-1 decision on February 22, 2000, the appeals court agreed with Miller but conceded some limits. The court said at-will workers (those who work without contracts) have no legal basis to sue if their bosses lie about their job status. However, employers cannot lie in certain situations, for example, to induce someone to take a job.

Presiding Judge Ted Wedemeyer, Jr., dissented. He wrote in his dissent, "Truthfulness and integrity in an employee-employer relationship form a foundation that allows all to thrive." Mackenzie appealed to the state supreme court.

The Wisconsin Supreme Court agreed in the summer of 2000 to review the case and heard oral arguments in November 2000. Miller lawyers said upholding the verdict in Mackenzie's favor would leave Wisconsin employers more vulnerable to lawsuits. Employers would be forced to guess what information they should disclose to employees. They added that the appeals court acted entirely within prior legal limits set by the state supreme court.

"If you're terminated and you can think of something later that your employers didn't tell you, you're a millionaire," attorney Frank Daily told reporters after the arguments.

The Wisconsin Supreme Court was expected to render its decision in late 2001.

B. J. Welborn

Suggestions for Further Reading

"Fired Miller Executive Awarded $26 Million; Jury Decides Discharging Official in 'Seinfeld' Case Was Improper." Milwaukee Journal Sentinel Online (July 16, 1997).

"Jerold J. Mackenzie vs. Miller Brewing Co., Patricia G. Best and Robert L. Smith." Wisconsin Court System Online.

"Mackenzie v. Miller Brewing Co." Court TV Library Online (1999).

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Mackenzie v. Miller Brewing Co.: 1997, 1999, 2000

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