Nat. Landscapes v. LIRC: Worker Misclassification Penalties Upheld

Natural Landscapes, Inc. hired Steven Armus in 2016 to perform vegetation management work. Armus had prior felony convictions for conspiracy to distribute cocaine and possession with intent to distribute, which became final in 2015. After his arrest in 2009, Armus underwent rehabilitation and cooperated with law enforcement as part of a plea agreement. Natural Landscapes terminated Armus's employment after learning about his convictions through an online search.

Armus filed a complaint under the Wisconsin Fair Employment Act (WFEA), which prohibits employment discrimination based on conviction record unless the conviction is substantially related to the job. The administrative law judge initially ruled against Armus, but the Labor and Industry Review Commission reversed the decision. Natural Landscapes appealed, and the circuit court upheld the Commission's decision.

Review of employment context and legal standard

The Court of Appeals of Wisconsin reviewed whether Natural Landscapes had met its burden under the "substantial relationship test." Under Wis. Stat. § 111.335(3)(a)1, employers may only terminate based on a conviction if the circumstances of the conviction are substantially related to the job. The court deferred to the Commission’s factual findings, which noted that Armus worked alone in open prairie areas, with limited supervision and minimal contact with coworkers or the public.

The Commission found that Armus's convictions did not present a specific or significant opportunity for recidivism in the context of his job duties. Armus had a low likelihood of reoffending, based on his rehabilitation, time elapsed since conviction, cooperation with law enforcement, and lack of further offenses.

The Commission emphasized that while Armus's job involved unsupervised work, it did not include factors like handling money or interacting regularly with the public that might relate to his past offenses. The court rejected Natural Landscapes' arguments that autonomy alone created an unacceptable risk or that speculative reputational harm justified termination.

Court's ruling and analysis

The court upheld the Commission's interpretation that the substantial relationship test requires a demonstrated risk tied to specific job duties. It found that Natural Landscapes failed to show that Armus's convictions were materially connected to the work he was performing. The court affirmed that generalized fears or speculative concerns do not meet the legal threshold.

The appellate court also rejected Natural Landscapes' reliance on internet articles and unverified allegations. It noted that the employer’s burden under the WFEA cannot be satisfied with unsupported claims or speculative concerns about future conduct.

Final outcome

The Court of Appeals of Wisconsin affirmed the circuit court’s order upholding the Commission’s determination. The court concluded that Natural Landscapes failed to demonstrate a substantial relationship between Armus’s convictions and his employment duties, and therefore violated the WFEA by terminating him based on his conviction record.

Help with labor and employment law issues

If you’ve experienced workplace discrimination, retaliation, or termination based on background history, Whitcomb, Selinsky PC handles labor and employment matters including wrongful termination, conviction record discrimination, and employer retaliation. Reach out to schedule a consultation and learn how our team can assist with your claim.