WI Court of Appeals rules lying to disabled is misrepresentation.

Byline: David Ziemer

Punitive damages were properly awarded to an employee on leave who was told he had a job waiting when he got better, but who had actually been terminated, the Wisconsin Court of Appeals held on Feb. 17.

Duane D. Betterman worked for Fleming Companies, Inc., for more than 31 years. In February 1997, he suffered a mental breakdown at work, and was diagnosed with a major depressive disorder and anxiety related to his job.

Fleming's human resources manager, Susan Morrison, sent Betterman forms to fill out for leave under the Family and Medical Leave Act (FMLA), and helped him fill out the forms.

The forms stated Fleming's leave policy that after FMLA leave was exhausted, an employee could go on paid medical leave for approximately 14 weeks. Then the employee could either go back to work or resign and receive long-term disability benefits. MetLife, Fleming's disability insurance carrier, would provide the long-term disability benefits.

Under Fleming's policy, the employee would be terminated if he or she did not return to work immediately following the leave of absence. However, Morrison never told Betterman that he would be resigning by doing so.

On April 1, 1997, Fleming sent Betterman a letter stating that long-term disability benefits would begin on Aug. 21, 1997. This is the day Fleming considered Betterman's employment to be terminated, pursuant to its policy.

After Betterman's breakdown, he went to Fleming several times, and had conversations with Morrison and others, but no one ever told him that he was terminated. Instead, they told him that when he was better, he could return to work.

In November 1997, Betterman decided to take funds out of his 401(k) but the fund manager told him he could not withdraw funds because Fleming notified the fund that Betterman was terminated. Consequently, Betterman could only take all the money out of his 401(k) or none at all.

Betterman then called Morrison, who assured him that he was not terminated and that she would take care of the problem. Betterman contacted the fund several times and was told each time that he was terminated. Eventually, Betterman rolled his 401(k) over into a different account.

In April 1998, MetLife notified Betterman that his disability benefits would terminate on May 21. Betterman went to Fleming to see about returning to work. Morrison told him he would need a letter from a doctor authorizing his return to work. Betterman's psychologist, Dr. Ellen...