Opinion
23-2963
08-09-2024
GREG GILSINGER, Plaintiff-Appellant, v. CITIES AND VILLAGES MUTUAL INSURANCE COMPANY, Defendant-Appellee.
NONPRECEDENTIAL DISPOSITION
Submitted May 14 2024[*]
Appeal from the United States District Court for the Eastern District of Wisconsin. No. 21-CV-831 J. P. Stadtmueller, Judge.
Before DIANE S. SYKES, Chief Judge DORIS L. PRYOR, Circuit Judge JOSHUA P. KOLAR, Circuit Judge
ORDER
Greg Gilsinger worked in worker's compensation for Cities and Villages Mutual Insurance Company ("CVMIC"). CVMIC offered Gilsinger a severance package after company leadership decided to restructure, but then fired him for cause upon discovering he was operating a side business during company time and using company servers and documents. Gilsinger sued CVMIC, complaining largely about receiving insufficient process before he was fired. The district court entered summary judgment in favor of CVMIC, and we affirm.
I. Background
A. Factual Background
We view the facts in the light most favorable to Gilsinger and give him the benefit of all reasonable inferences. Biggs v. Chicago Bd. of Educ., 82 F.4th 554, 559 (7th Cir. 2023).
CVMIC, an insurance company owned by Wisconsin municipalities, hired Gilsinger in December 1997 as a worker's compensation claims manager. By 2016, CVMIC had promoted him to be the director of worker's compensation claims. Gilsinger had no written employment contract, but CVMIC's employee manual stated that employees were "at-will." This meant that CVMIC could terminate Gilsinger's employment "with or without cause, and with or without notice." Gilsinger, however, could grieve "any matter concerning employment" through discussions with supervisors and written appeals to CVMIC management and the Board of Directors.
In 2014, Gilsinger developed a "narrow network" of healthcare providers to treat injured employees of CVMIC members, saving those members millions of dollars. Gilsinger was later encouraged by a CVMIC consultant to further develop this concept into a business. In April 2018, Gilsinger formed Quality Care Medical Solutions ("QCMS"). While getting QCMS off the ground, Gilsinger sent CVMIC documents from his work email address to himself.
It appears that Gilsinger was not forthcoming about his side business to CVMIC leadership. The CEO of CVMIC, Ken Horner, learned about QCMS about a year after it was formed. Horner initially worried Gilsinger might be misappropriating funds, but an investigation revealed no evidence of this.
Around this same time (the record does not reveal exactly when), Horner decided to restructure CVMIC. This decision came after learning that the director of liability claims planned to retire. Horner determined that one person could handle both the soon-to-be-vacant position as well as Gilsinger's job. Believing Gilsinger unsuitable for this dual role, Horner decided to eliminate Gilsinger's position.
Horner informed the Board of Directors of his decision and terminated Gilsinger's employment on October 31, 2019. CVMIC offered Gilsinger a severance agreement with a 21-day acceptance period.
Gilsinger requested to appeal his position's elimination at the November 2019 Board meeting. Horner initially confirmed that this in-person appeal would be heard. Later, Horner asked Gilsinger if he was waiving his right to a written grievance. When Gilsinger responded that he was not, Horner revoked the opportunity for an in-person appeal, insisting that Gilsinger file a written grievance as per the employee manual.
Gilsinger then appealed to the Board, arguing that restructuring was a pretext for firing him. He claimed that CVMIC leadership was retaliating against him for-among other things-speaking out in 2017 at a CVMIC Board meeting against the company's "mismanagement" of claims handling for Green Bay, one of CVMIC's largest members. Although the record does not reveal precisely what Gilsinger said to the Board, he recounts that he raised concerns about how losing the Green Bay account would impact CVMIC's reputation.
Gilsinger's 2019 appeal to the Board included an email that caught Horner's attention. This email was forwarded from Gilsinger's work account to a QCMS email account. Horner launched an internal review of CVMIC's servers, which revealed thousands of emails sent to that QCMS email address, many with CVMIC documents attached.
Upon discovering this "theft and transfer of documents for personal use," Horner rescinded the severance agreement and terminated Gilsinger for cause. The termination letter informed Gilsinger of his right to appeal through the grievance procedure. Gilsinger later filed an appeal with the Board, which was denied.
Two other events-both of which are disputed-allegedly occurred around the time of Gilsinger's termination. First, Gilsinger alleges that CVMIC leadership told Glen Boyle, who works for a CVMIC contractor, that Gilsinger had misappropriated CVMIC contracts. Boyle, however, denied being told about any misappropriation. Second, CVMIC leadership allegedly accused Rick Ceman-an attorney who did work for both CVMIC and QCMS-of double billing CVMIC for work that was actually done for QCMS. CVMIC leaders deny that this accusation happened. Gilsinger asserts that these incidents led Boyle and Ceman to halt their professional relationship with him and QCMS.
B. Procedural Background
In due course, Gilsinger sued CVMIC. He pursued two federal claims, alleging that CVMIC fired him (1) without due process in violation of the Fourteenth Amendment and (2) in retaliation for protected speech in violation of the First Amendment. Gilsinger also claimed that CVMIC committed several state-law torts, including (1) defamation; (2) intentional interference with contractual relationships; (3) breach of contract; (4) breach of the covenant of good faith and fair dealing; and (5) promissory estoppel.
CVMIC moved for summary judgment on all counts. CVMIC contended that all of Gilsinger's claims failed as a matter of law. It also argued that, because it is not a state actor, it could not be liable for any alleged constitutional violations.
The district court granted the summary judgment motion. Gilsinger v. Cities &Villages Mut. Ins. Co., 693 F.Supp.3d 975 (E.D. Wis. 2023). In regards to the constitutional claims, the court found that CVMIC was a state actor and therefore could be liable for constitutional violations. Id. at 986-88. Nevertheless, the court ruled that CVMIC had not violated Gilsinger's constitutional rights and entered summary judgment on Gilsinger's federal claims. Id. at 988-93. The court then exercised supplemental jurisdiction over Gilsinger's state-law claims, entering summary judgment to CVMIC on those as well. Id. at 993-98. Gilsinger appeals.
II. Analysis
We review the entry of summary judgment de novo. Navratil v. City of Racine, 101 F.4th 511, 518 (7th Cir. 2024). Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a).
A. Constitutional Claims
Gilsinger alleges that CVMIC fired him without due process (violating the Fourteenth Amendment) and in retaliation for protected speech (violating the First Amendment).
The First and Fourteenth Amendments protect citizens from government conduct, not from conduct by private actors. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 815 (7th Cir. 2009). The district court determined that CVMIC, as a municipality-owned insurance company, was a state actor. CVMIC disagrees but concedes this point for present purposes. We accept that concession and turn to the merits of Gilsinger's constitutional claims.
1. Fourteenth Amendment Procedural Due Process Claim
Gilsinger alleges that CVMIC violated the Fourteenth Amendment by firing him without sufficient process-namely, a hearing. While the Constitution prohibits state actors from depriving a person of property without due process of law, U.S. CONST. amend. XIV, § 1, we must first determine "whether a protected property interest actually exists." Cheli v. Taylorville Cmty. Sch. Dist., 986 F.3d 1035, 1039 (7th Cir. 2021) (citation omitted). Property interests are not inherent in the Constitution but "are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.'" Id. (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)).
Gilsinger identifies his property interest as one in continued employment. But Wisconsin state law has not given him such an interest. By default, employees in Wisconsin can be fired at will. Mackenzie v. Miller Brewing Co., 623 N.W.2d 739, 747 (Wis. 2001). The CVMIC employee manual confirms this default rule, stating that "at-will" employees are subject to termination at any time, with or without cause or notice. Under Wisconsin law, "at-will" workers lack a property interest in continued employment; only employees with "just cause" protection possess such an interest. Beischel v. Stone Bank Sch. Dist., 362 F.3d 430, 436 (7th Cir. 2004). Because Gilsinger has no protected property interest, the Fourteenth Amendment did not require CVMIC to provide any process before firing Gilsinger. Id.
Gilsinger resists this conclusion for two reasons. Neither persuades us.
First, he contends that a Wisconsin statute providing government employees a grievance procedure, WIS. STAT. § 66.0509(1m), confers a property interest in continued employment. But that's incorrect: Gilsinger "must show entitlement to the job, not just to the procedures." Border v. City of Crystal Lake, 75 F.3d 270, 275 (7th Cir. 1996). Without Gilsinger identifying a statute giving him "just cause" protection in his continued employment, this argument must fail. See Beischel, 362 F.3d at 436 (recognizing a statute can confer a protected property interest on an employee).
Second, Gilsinger argues that CVMIC's "long-established practice" of giving employees some protection before firing them essentially gave him "just cause" protection, notwithstanding the at-will default. But no reasonable juror could find that such a practice existed. Gilsinger cites a single example in which CVMIC gave an employee a "progressive discipline" system before termination. Yet in that case, the employee was explicitly told that the agreement did not change her at-will employment status. Nothing about this one incident displaces the state's default at-will rule.
Absent a protected property interest, Gilsinger's Fourteenth Amendment claim must fail. The district court was therefore right to enter summary judgment in favor of CVMIC on this claim.
Gilsinger also suggests that his termination "imposed on him a stigma that foreclosed his freedom to take advantage of other employment opportunities." This sounds like a "stigma plus" claim, see Malhotra v. Univ. of Ill. at Urbana-Champaign, 77 F.4th 532, 538 (7th Cir. 2023), but this theory was never raised below and is therefore waived. United Cent. Bank v. Davenport Estate LLC, 815 F.3d 315, 318 (7th Cir. 2016).
2. First Amendment Retaliation Claim
Gilsinger also claims that CVMIC fired him in retaliation for statements he made at a 2017 Board meeting about CVMIC's "mismanagement" of claims handling involving the Green Bay account, in violation of the First Amendment.
To establish a First Amendment retaliation claim, a public employee must prove that: "(1) his speech was constitutionally protected, (2) he has suffered a deprivation likely to deter speech, and (3) his speech was at least a motivating factor in the employer's action." Swetlik v. Crawford, 738 F.3d 818, 825 (7th Cir. 2013) (citation omitted). We can assume without deciding that Gilsinger has met the first two elements because, regardless, Gilsinger's claim falters on the third element: causation. Massey v. Johnson, 457 F.3d 711, 716-17 (7th Cir. 2006) (explaining the third element of the First Amendment retaliation claim focuses on the causation inquiry-whether, and to what degree, the plaintiff's protected expression motivated the defendant's decision). In his opening brief, Gilsinger fails to present an argument about CVMIC's retaliatory motive-that his statements regarding alleged mismanagement were at least a "motivating factor" in CVMIC's decision to fire him. While Gilsinger does make this argument in his reply brief, it's too late; arguments raised for the first time in a reply brief are considered waived because they leave no chance for response. White v. United States, 8 F.4th 547, 552 (7th Cir. 2021). Without a properly presented causation argument, Gilsinger's First Amendment retaliation claim must fail. * * *
We therefore agree with the district court that neither of Gilsinger's constitutional claims survive summary judgment. The district court opted to exercise supplemental jurisdiction over Gilsinger's state-law claims, see 28 U.S.C. § 1367(c)(3), a decision neither party contests on appeal. We therefore proceed to analyze Gilsinger's state-law claims.
B. State-Law Claims
Gilsinger brought five state-law claims: (1) defamation; (2) intentional interference with contractual relationships; (3) breach of contract; (4) breach of the covenant of good faith and fair dealing; and (5) promissory estoppel. All agree that these claims are governed by Wisconsin law. See Schindler v. Seiler, 474 F.3d 1008, 1010 (7th Cir. 2007). We analyze each claim in turn.
1. Defamation
To succeed on his defamation claim, Gilsinger must establish three elements: "(1) a false statement; (2) communicated by speech, conduct or in writing to a person other than the person defamed; and, (3) [that] the communication is unprivileged and tends to harm one's reputation so as to lower him or her in the estimation of the community or to deter third persons from associating or dealing with him or her." In re Storms v. Action Wis. Inc., 750 N.W.2d 739, 748 (Wis. 2008).
Gilsinger's defamation claim has two components. First, he alleges that CVMIC leadership told Glen Boyle (who works for a CVMIC contractor) that Gilsinger had misappropriated CVMIC contracts. But there is no admissible evidence that supports this claim. In his sworn deposition, Boyle denied that CVMIC leadership accused Gilsinger of any such thing. While Gilsinger stated that the incident did take place, his testimony was hearsay, as he stated in his deposition that he knew this incident took place only because Boyle told him so. The district court found this statement inadmissible, and Gilsinger has not challenged this determination on appeal, thereby waiving any such challenge. See Parker v. Four Seasons Hotels, Ltd., 845 F.3d 807, 810 n.2 (7th Cir. 2017). Without a false statement to rely on, the first component of Gilsinger's defamation claim fails.
Deposition testimony is, in general, the type of evidence that can be used to support a summary judgment motion. Jewett v. Anders, 521 F.3d 818, 821 (7th Cir. 2008) (noting that "[s]ummary judgment is proper if," among other things, "the .. depositions .. show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law" (citation omitted)). Gilsinger has not argued that Boyle's deposition is inadmissible for any reason.
The second component of this claim stems from an allegation that CVMIC representatives accused Rick Ceman, an attorney, of billing CVMIC for work he had done for Gilsinger's side business, QCMS. This theory also fails. To start, CVMIC's alleged accusations implicate only Ceman and QCMS-and not Gilsinger-as doing something wrong. Gilsinger cannot litigate for defamation of a third party. Buckley v. Fitzsimmons, 20 F.3d 789, 795 (7th Cir. 1994) ("Rights personal to their holders may not be enforced by third parties."); see 1 RODNEY A. SMOLLA, LAW OF DEFAMATION § 4:74 (2d ed. 2024 update) ("[T]here can be no vicarious defamation, or defamation through guilt by association."). Moreover, there is no admissible evidence supporting this. The CVMIC employees who allegedly made this statement testified that they did not accuse Ceman of double billing. Again, Gilsinger insisted in his deposition that the incident did happen, but only because Ceman told him so. That's hearsay, Schindler, 474 F.3d at 1011, and Gilsinger does not argue otherwise.
For those reasons, the district court was right to determine that Gilsinger's defamation claim should not survive summary judgment.
2. Intentional Interference with Contractual Relationships
To prove intentional interference with contractual relationships, Gilsinger must establish five elements: (1) that he had a contract or prospective contractual relationship with a third party; (2) that CVMIC interfered with the relationship; (3) the interference was intentional; (4) a causal connection exists between the interference and the damages; and (5) CVMIC was not justified or privileged to interfere. Burbank Grease Services, LLC v. Sokolowski, 717 N.W.2d 781, 796 (Wis. 2006); see also Briesemeister v. Lehner, 720 N.W.2d 531, 542 (Wis. Ct. App. 2006). The first element requires "an existing contract or sufficiently concrete prospective contract." Shank v. William R. Hague, Inc., 192 F.3d 675, 689 (7th Cir. 1999), overruled on other grounds by Hill v. Tangherlini, 724 F.3d 965 (7th Cir. 2013). At minimum, the plaintiff and a third party must have "manifested ... intent[] to be bound to an agreement, the terms of which are sufficiently certain and definite." Id. at 684 (citing Novelly Oil Co. v. Mathy Constr. Co. 433 N.W.2d 628, 630 (Wis. 1988)).
Gilsinger claims that CVMIC interfered with his contractual relationships with Boyle and Ceman. He alleges that CVMIC made clear to both of these individuals that it would not do business with them if they continued working with Gilsinger. No reasonable juror, however, could find that CVMIC interfered with Gilsinger's contractual or prospective contractual relationships with either Boyle or Ceman.
Gilsinger did not have an "existing contract or sufficiently concrete prospective contract" with Boyle or the company he worked for. Shank, 192 F.3d at 689; see id. at 684 (noting that a contract requires an "intention to be bound to an agreement, the terms of which are sufficiently certain and definite" (emphasis added)). While there is evidence of a business relationship between the two, CVMIC cannot be liable for interfering with a mere business relationship. Instead, there must be a contractual relationship-either present or prospective-for CVMIC to be liable. Sokolowski, 717 N.W.2d at 796. The lack of a contractual relationship is "fatal to [Gilsinger's] claim." Shank, 192 F.3d at 684-91 (concluding Wisconsin does not recognize a claim for tortious interference with a "mere business relationship").
Regarding Ceman and his law firm, Gilsinger did not introduce admissible evidence showing CVMIC interfered with any contractual relationship he had with Ceman. Horner-the CVMIC CEO-testified that he never told Ceman that he should stop working with Gilsinger and QCMS. Gilsinger essentially admitted as much in his deposition, stating that Ceman never told him that CVMIC said he could not continue working with Gilsinger. While Gilsinger later submitted an affidavit that stated that "Ceman told me that [he] could not continue working with me without risking CVMIC's retaliation," the district court struck this statement under the sham-affidavit rule because it contradicted his prior deposition testimony. See James v. Hale, 959 F.3d 307, 316 (7th Cir. 2020). Gilsinger has not challenged this evidentiary decision on appeal, thus waiving any challenge to it. See Parker, 845 F.3d at 810 n.2. Consequently, no admissible evidence supports Gilsinger's claim as relates to Ceman and his law firm.
For those reasons, the district court correctly entered summary judgment for CVMIC on Gilsinger's intentional interference with contractual relationships claim.
3. Breach of Contract Claim
Gilsinger claims that CVMIC breached its employment contract by firing him instead of providing progressive discipline and an appeal hearing.
Recall that the default rule in Wisconsin-as also stated in the CVMIC employee handbook-is that employees like Gilsinger can be fired at will. Mackenzie v. Miller Brewing Co., 623 N.W.2d 739, 747 (Wis. 2001). At-will employment agreements are contracts. Id. at 745-47. But, because of the nature of at-will employment, "termination of an employee who has agreed to enter into an at-will employment relationship does not constitute a breach of contract justifying the recovery of damages." Bukstein v. Dean Health Sys., Inc., 903 N.W.2d 130, 134 (Wis. Ct. App. 2017) (citation omitted).
An at-will employment relationship may, however, be modified through various methods, including language in an employee handbook or an unwritten policy. Clay v. Horton Mfg. Co., Inc., 493 N.W.2d 379, 381-82 (Wis. Ct. App. 1992). In regards to the employee handbook, it will bind parties to a "different employment relationship" only when it "contains express provisions from which it can reasonably be inferred that the parties intended to" make this modification. Helland v. Kurtis A. Froedtert Mem'l Lutheran Hosp., 601 N.W.2d 318, 321 (Wis. Ct. App. 1999). "It is [also] possible for a company through its agents to modify an employment contract [through] company policies notwithstanding the [specific language in the employee handbook], if both parties intend to do so." Clay, 493 N.W.2d at 382.
Gilsinger picks up on this line of cases and argues that certain portions of CVMIC's handbook and unwritten company policies communicated through his superiors bound CVMIC and himself to a "different employment relationship." See Helland, 601 N.W.2d at 321. He first contends that the handbook's right to appeal to the Board demonstrates CVMIC intention in altering his "employment status." But "the mere existence of an employer-issued policy that provides guidelines for employees or that sets forth employer policies and procedures is not sufficient to alter an at-will employment relationship." Bukstein, 903 N.W.2d at 135; compare Ferraro v. Koelsch, 368 N.W.2d 666, 672 (Wis. 1985) (finding a handbook modified an employment contract only when it promised "continued employment"; a progressive discipline structure; a layoff procedure based on seniority; and "just cause" discharge protections).
Gilsinger also argues that an unwritten practice at CVMIC modified his at-will status. He points to a statement from the HR director that "nobody is really at will anymore," and that employees tend to get certain types of "progressive discipline" before being fired. Gilsinger also cites to a "last chance agreement" that was offered to a former subordinate of his, which put that employee on a probationary period.
Neither the statement nor the last-chance agreement establishes a disputed material fact precluding summary judgment because neither suffices as a modification of Gilsinger's employment status. Clay v. Horton Manufacturing Co.-a case that Gilsinger heavily relies on-shows why. 492 N.W.2d at 379. In Clay, company superiors "repeated[ly]" assured the plaintiff that employees would be laid off based on seniority. Id. at 380. This seniority policy, the Wisconsin appellate court held, plausibly became part of the plaintiff's employment contract because it was reasonable to "conclude that the assurances evince [the employer]'s intent to alter the employment contract to encompass the company policies." Id. at 382.
We have nothing like that here. What we do have is a stray comment from an HR director noting that employees tend to get some process before termination. We also have a personnel decision that reinforces that reality. But the HR director's alleged comments never rose to the level of what happened in Clay. Critically, she never promised Gilsinger that he would get some sort of process akin to what another employee received. Because Gilsinger has failed to present evidence that his employment relationship with CVMIC was altered, this argument fails.
The district court thus rightly entered summary judgment in CVMIC's favor on the breach of contract claim.
4. Breach of Duty of Good Faith and Fair Dealing Claim
Gilsinger also contends that CVMIC breached its duty of good faith and fair dealing to him. But this claim fails at the threshold, as the Wisconsin Supreme Court has "refuse[d] to impose a duty to terminate in good faith into employment contracts." Brockmeyer v. Dun &Bradstreet, 335 N.W.2d 834, 838 (Wis. 1983). The district court thus correctly entered summary judgment for CVMIC on this claim.
5. Promissory Estoppel Claim
Gilsinger's final claim is that, even if he did not have a contract with CVMIC that required progressive discipline before termination, he reasonably relied upon CVMIC's promise of progressive protection. To succeed on this type of promissory estoppel claim, Gilsinger must establish three elements: "(1) the promise is one that the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee; (2) the promise induced such action or forbearance; and (3) injustice can be avoided only by enforcement of the promise." McLellan v. Charly, 758 N.W.2d 94, 107-08 (Wis. Ct. App. 2008). "Mere predictions or statements of opinion are not promises supportive of a promissory estoppel cause of action." Major Mat Co. v. Monsanto Co., 969 F.2d 579, 583 (7th Cir. 1992) (applying Wisconsin law).
The "promise" that Gilsinger identifies is the HR director's statement that "nobody is really at will anymore, and that's why we do [progressive discipline]." Even assuming that this statement is the type that meets the first element of a promissory estoppel claim, Gilsinger's claim still fails. That is because he makes no argument on the final two elements of the promissory estoppel analysis. He does not state how his behavior changed based on the HR director's statement, nor he does he argue why justice requires holding CVMIC to the HR director's "promise." See McClellan, 758 N.W.2d at 107-08. The failure to make either argument means that the district court was right to enter summary judgment for CVMIC on this claim.
Gilsinger mentions in a footnote on the last page of his brief that CVMIC "refused to provide" certain documents in discovery related to this claim. This skeletal argument-"really nothing more than an assertion"-is waived. United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991).
III. Conclusion
For those reasons, we AFFIRM the district court's entry of summary judgment in CVMIC's favor.
[*] The Court granted the parties' joint motion to waive oral argument. The appeal is therefore submitted on the briefs and the record. See FED. R. APP. p. 34(f).