New Wellness Associates Inc. v. Risa Lynn Janowski ( 2023 )

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
July 25, 2023
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2021AP1301 Cir. Ct. No. 2019CV1544
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
NEW WELLNESS ASSOCIATES INC.,
PLAINTIFF-APPELLANT,
V.
RISA LYNN JANOWSKI,
DEFENDANT-RESPONDENT.
APPEAL from a judgment of the circuit court for Brown County:
TIMOTHY A. HINKFUSS, Judge. Affirmed.
Before Stark, P.J., Hruz and Gill, JJ.
Per curiam opinions may not be cited in any court of this state as precedent
or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
¶1 PER CURIAM. New Wellness Associates Inc. appeals a judgment
affirming an arbitration award in favor of New Wellness’s former employee,
No. 2021AP1301
Risa Janowski.1 New Wellness argues that the arbitration award should be
vacated because New Wellness properly terminated Janowski’s employment after
she “accept[ed] employment” with Counseling Specialists. In the alternative,
New Wellness argues that the arbitration panel miscalculated the arbitration award
by not considering Janowski’s subsequent earnings with her new employer. We
reject these arguments and affirm.
BACKGROUND
¶2 New Wellness is a business that provides outpatient mental health
services. In March 2017, New Wellness hired Janowski as a therapist, and the two
parties executed an employment contract. Prior to working at New Wellness,
Janowski had worked at her own business, Promises Counseling Services, LLC.
A number of clients at Promises Counseling subsequently followed Janowski to
New Wellness.
¶3 As relevant to this appeal, the employment contract allowed either
party, with some limitations, to terminate the contract upon written, ninety days’
notice. The contract further provided, however, that Janowski’s employment
would terminate automatically if, among other things, she “accept[ed]
employment, without Company approval, as a therapist with another legal entity.”
In addition, the contract contained an arbitration clause, requiring the parties to
arbitrate any dispute with respect to the performance or interpretation of the
contract or whether either party had breached the contract.
1
Janowski filed a pro se response brief in this appeal. She was also pro se during the
circuit court proceedings, but she was represented by an attorney during the arbitration
proceedings.
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No. 2021AP1301
¶4 In April 2018, Janowski notified New Wellness that she would be
ending her employment. In a written letter to Janowski, New Wellness confirmed
its receipt of Janowski’s notice and stated that her last day of employment would
be July 20, 2018. The letter further stated that “[t]he clinic will notify patients of
the clinic and you can notify ‘Promises Counseling’ clients of this change.”
Janowski subsequently told New Wellness that she would be notifying all of her
clients of her departure because she had legal and ethical duties to do so. Shortly
thereafter, New Wellness sent a letter to its clients stating that Janowski’s
employment would end on July 20, 2018, and that New Wellness would transfer
client records to Janowski’s “new location” if the clients chose to follow her.
Likewise, Janowski created and dispersed her own letter notifying clients of her
departure.
¶5 On May 4, 2018, New Wellness terminated Janowski’s employment.
In a written letter, New Wellness explained to Janowski that she had breached the
employment contract by “accept[ing] a position [at] Counseling Specialists with a
start date of [June 11, 2018].” Janowski later commenced an arbitration action
alleging that New Wellness breached the employment contract by terminating her
employment.
¶6 The arbitration panel held a hearing on the dispute and considered
documents submitted by the parties. Thereafter, the panel issued a written
decision concluding that New Wellness had prematurely terminated Janowski’s
employment because she had not “started” working for Counseling Specialists
when New Wellness terminated her employment on May 4, 2018. The panel also
noted that the termination of Janowski’s employment, “while apparently consistent
with the termination provisions of the contract[,] was not consistent with the
behaviors of [New Wellness] and Ms. Janowski’s provision of services to
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Promises Counseling clients.”2 The arbitration panel later issued a second
decision, which denied a request to reconsider its prior decision and awarded
Janowski roughly $9,200 in compensation for lost wages.
¶7 New Wellness subsequently sought judicial review of the arbitration
award, arguing that the arbitration panel “exceeded [its] powers” by improperly
interpreting the meaning of “accept[s] employment” and by assuming facts that
were not in evidence. The circuit court held a hearing at which Janowski, the
office manager of New Wellness, and the three arbitrators testified. Ultimately,
the court rejected New Wellness’s arguments, affirmed the arbitration award, and
granted Janowski a money judgment for the award.
¶8 New Wellness now appeals. Additional facts will be provided as
necessary below.
DISCUSSION
I. Standard of review
¶9 Our review of an arbitrator’s award is generally “very limited” and
seeks to ensure that the parties received the arbitration process for which they
bargained. Racine County v. International Ass’n of Machinists & Aerospace
Workers, Dist. 10, AFL-CIO, 2008 WI 70, ¶11, 310 Wis. 2d 508, 751 N.W.2d
312. “We give deference to the arbitrator’s factual and legal conclusions.”
Baldwin-Woodville Area Sch. Dist. v. West Cent. Educ. Ass’n - Baldwin
2
Janowski also sought unemployment insurance benefits. Although an administrative
law judge initially awarded those benefits to Janowski, the Labor and Industry Review
Commission (LIRC) reversed on appeal. The arbitration panel specifically noted in its decision
that it was “not bound by the findings or rulings of [LIRC].”
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No. 2021AP1301
Woodville Unit, 2009 WI 51, ¶20, 317 Wis. 2d 691, 766 N.W.2d 591. We also
presume arbitration awards are valid and will disturb them “only where invalidity
is shown by clear and convincing evidence.” Kadlec v. Kadlec, 2004 WI App 84,
¶8, 272 Wis. 2d 373, 679 N.W.2d 914 (citation omitted). Thus, we cannot vacate
an arbitrator’s decision “for mere errors of judgment as to law or fact.” Joint Sch.
Dist. No. 10 v. Jefferson Educ. Ass’n, 78 Wis. 2d 94, 117, 253 N.W.2d 536(1977).
¶10 Despite acknowledging our limited review of an arbitration award,
New Wellness contends that we should review the instant award de novo because
we are “more properly equipped” than the arbitration panel to determine whether
New Wellness rightfully terminated Janowski’s employment. In support,
New Wellness cites Glendale Professional Policemen’s Ass’n v. City of
Glendale, 83 Wis. 2d 90, 264 N.W.2d 594 (1978), for the proposition that this
court can proceed to the merits of a dispute “when the expertise of the courts more
closely matches the question raised in arbitration.”
¶11 New Wellness misapprehends Glendale. In that case, our supreme
court reviewed de novo whether a provision in a contract was enforceable because
that determination was dispositive of whether the dispute was subject to
arbitration—an issue that the arbitrator had only “initial authority” to decide under
the contract. Id. at 98-101. The court also declined to give great weight deference
to the arbitrator’s determination of whether the contract was enforceable because
that issue involved “the relationship between two state statutes, [which] is within
the special competence of the courts rather than the [arbitrator].” Id. at 100-01.
¶12 The issues in Glendale are not present in this case. New Wellness
does not challenge the enforceability of any provision in the employment contract,
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No. 2021AP1301
nor does the contract permit a de novo review of the arbitrator’s decision. Thus,
the standard of review in Glendale is inapplicable here, where the main issue
presented to the arbitration panel was merely whether New Wellness had breached
the terms of the employment contract.
¶13 New Wellness also argues that our review is guided by the common
law rather than WIS. STAT. ch. 788 (2021-22)3 because chapter 788 does “not
apply to contracts between employers and employees.” See WIS. STAT. § 788.01.
Even if we assume, without deciding, that chapter 788 does not apply, the
application of only common law does not appear to meaningfully alter our review
in this case. As our supreme court previously explained:
The standard of review of an award under both
[chapter 788] and common law is substantially the same.[4]
The court will not relitigate issues submitted to arbitration.
The parties contracted for the arbitrator’s decision, not the
court’s. Under common law rulings, an award may be set
aside for fraud or partiality or gross mistake by the
arbitrator; fraud or misconduct by the parties affecting the
result; or want of jurisdiction in the arbitrator.
Chapter [788] … sets forth similar standards. If these
standards were not violated by the arbitrators’ award, the
[reviewing] court should confirm the award.
Joint Sch. Dist., 78 Wis. 2d at 116-17 (emphasis added; footnotes omitted).
3
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.
4
Although our supreme court actually cited WIS. STAT. ch. 298 (1975-76), that chapter
was later renumbered to WIS. STAT. ch. 788 in 1979. See 1979 Wis. Laws, ch. 32, § 64. We are
not aware of any amendments to chapter 788 that would affect the court’s discussion in Joint
School District No. 10 v. Jefferson Education Ass’n, 78 Wis. 2d 94, 116-17, 253 N.W.2d 536(1977), regarding the differences between our standard of review under common law and under
the Wisconsin Statutes.
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No. 2021AP1301
¶14 Notably—despite arguing that this case is governed by the common
law and complaining that the circuit court erred by relying on WIS. STAT.
ch. 788—New Wellness does not argue that the arbitration panel’s award should
be set aside based on any of the common law grounds. Instead, New Wellness
repeatedly argues that the arbitration “panel exceeded [its] powers,” which is a
ground to vacate an arbitration award under WIS. STAT. § 788.10(1)(d).
Accordingly, we will analyze New Wellness’s arguments under this statutory
standard because New Wellness has not developed any argument based upon a
common law ground to vacate the arbitration award.5 See State v. Pettit, 171
Wis. 2d 627, 646-47, 492 N.W.2d 633 (Ct. App. 1992) (we need not address
undeveloped arguments).
¶15 “An arbitrator exceeds his or her powers when the arbitrator
demonstrates either ‘perverse misconstruction’ or ‘positive misconduct,’ when the
arbitrator manifestly disregards the law, when the award is illegal, or when the
award violates a strong public policy.” Racine County, 310 Wis. 2d 508, ¶11. A
perverse misconstruction of a contract occurs where there is no reasonable
foundation for the arbitrator’s interpretation. Baldwin-Woodville, 317 Wis. 2d
691, ¶¶22-23. In other words, “there is no contractual language that would allow
5
New Wellness argues that the circuit court erred by relying on WIS. STAT. ch. 788
instead of the common law. In doing so, New Wellness seems to imply that it properly raised that
issue for that court’s consideration. The record, however, belies this implication. New Wellness
explained to the circuit court that it was “challenging the decision of the arbitration panel because
the panel exceeded its powers and considered evidence that was not in the record.” (Emphasis
added.) Then, when the court cited WIS. STAT. § 788.10(1)(d) for the proposition that an
arbitration award can be vacated if the arbitrators exceeded their powers, New Wellness did not
object or inform the court that only the common law applied. Accordingly, New Wellness has
forfeited any challenge to the circuit court’s reliance on chapter 788. See Townsend v. Massey,
2011 WI App 160, ¶¶24-25, 338 Wis. 2d 114, 808 N.W.2d 155 (we need not consider an
argument raised for the first time on appeal).
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No. 2021AP1301
for the arbitrator’s construction.” Id., ¶23. “Whether an arbitrator has exceeded
his [or her] authority by perversely misconstruing the parties’ agreement is a
question of law that this court reviews independently of the [circuit court’s]
determination[].”6 Id.
II. The arbitration panel did not exceed its powers in determining that
New Wellness breached the employment contract
¶16 New Wellness argues that the arbitration “panel exceeded [its]
powers by changing the terms of the employment contract to terms that the parties
did not select.” Specifically, New Wellness asserts that the panel changed
“accepts” to “start[s]” in the provision that states that Janowski’s employment is
automatically terminated if she “accepts employment, without Company approval,
as a therapist with another legal entity.” According to New Wellness, “accept”
means “to agree to undertake, as in a responsibility,” which “doesn’t necessarily
mean someone has started that responsibility, but there is an agreement that they
will start at some point.”
¶17 New Wellness’s argument arises from the arbitration panel’s
conclusion that New Wellness prematurely terminated Janowski’s employment.
In reaching that conclusion, the panel explained that
[i]f [New Wellness] thought [Janowski] was starting
another job with a competitor on 6/11/18, [it] should not
6
To the extent New Wellness argues that Racine County permits this court to
independently determine all of the legal issues presented to the arbitration panel, we reject that
assertion. See Racine County v. International Ass’n of Machinists & Aerospace Workers, Dist.
10, AFL-CIO, 2008 WI 70, ¶11, 310 Wis. 2d 508, 751 N.W.2d 312. Racine County recognized
that the determination of whether an arbitrator exceeded his or her powers is a question of law
subject to de novo review. Id. In other words, our supreme court was determining that particular
legal issue independent of the circuit court and this court. Id. It did not give courts authority to
independently determine all legal issues presented to the arbitrator.
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No. 2021AP1301
have terminated her on 5/4/18. At any point between
5/4/18 and 6/11/18 (the “assumed” start date at her new
employer), Ms. Janowski could have decided not to pursue
employment with Counseling Specialist[s]. If breach of
contract is the main issue, 6/12/18 could have been the
term[ination] date by [New Wellness], ONLY if
Ms. Janowski had indeed started at Counseling Specialist[s]
on 6/11/18.
Thus, consistent with New Wellness’s argument, the panel seemingly interpreted
the phrase “accepts employment” as applying to situations where Janowski
actually started employment with another entity. Although we agree that the panel
interpreted “accepts employment” in that manner, we conclude that the panel did
not exceed its powers in doing so.
¶18 The arbitration panel’s interpretation of “accepts employment” has a
“reasonable foundation” in the ordinary meaning of those words.
See Baldwin-Woodville, 317 Wis. 2d 691, ¶22 (citation omitted). “Accept” can be
defined as “to receive with consent (something given or offered).” Accept,
WEBSTER’S THIRD NEW INT’L DICTIONARY (unabr. 1993). Furthermore,
“employment” has been defined as “work (as customary trade, craft, service, or
vocation) in which one’s labor or services are paid for by an employer.”
Employment, WEBSTER’S THIRD NEW INT’L DICTIONARY (unabr. 1993). When
read together, “accepts employment” could therefore be interpreted as
meaning: to consensually receive work in which one’s services are paid for by an
employer. Based on this interpretation, the contract provided a reasonable
foundation for the panel to conclude that a person “accepts employment”—i.e.,
receives work—only when that person starts working for the employer and
establishes an employer-employee relationship.
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No. 2021AP1301
¶19 New Wellness’s arguments to the contrary are misplaced. The
contract did not provide that Janowski’s employment could be immediately
terminated if she accepted an offer of employment; it simply stated that her
employment could be terminated if she “accept[ed] employment.” Moreover,
even if New Wellness’s interpretation of “accepts employment” is reasonable, our
standard of review would still require that we affirm the arbitration panel’s
interpretation because, as explained above, that interpretation has a reasonable
foundation in the employment contract. Accordingly, the panel did not perversely
misconstrue the employment contract—and therefore did not exceed its powers—
by concluding that Janowski did not “accept[] employment” until she began
working for Counseling Specialists.
¶20 Irrespective of the foregoing analysis, the arbitration panel’s
decision also provides an alternative basis to affirm. In particular, the panel’s
decision conveyed the notion that New Wellness had approved of Janowski
accepting an offer of employment with another legal entity. As the panel
explained in its decision, Janowski’s termination “was not consistent with the
behaviors of [New Wellness] and Ms. Janowski’s provision of services to
Promises Counseling clients.” Although the panel could have more clearly
explained how such behavior rendered Janowski’s termination premature, the
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No. 2021AP1301
panel seems to have found that Janowski did not “accept[] employment, without
Company approval, as a therapist with another legal entity.”7 (Emphasis added.)
¶21 A finding that New Wellness approved of Janowski accepting new
employment also has a sufficient factual basis in the evidence presented to the
arbitration panel. As noted above, New Wellness gave Janowski a letter
confirming her resignation notice and stating that New Wellness would notify its
patients and that Janowski could “notify ‘Promises Counseling’ clients.” Shortly
thereafter, New Wellness sent letters to its clients, acknowledging that Janowski’s
employment would be ending on July 20, 2018, and that New Wellness would
facilitate the transfer of client records to Janowski’s “new location” if clients
chose to follower her. (Emphasis added.)
¶22 From these letters, a fact finder could reasonably infer that
New Wellness knew Janowski was resigning and would eventually be providing
counseling services for a different entity. In fact, both letters explicitly
acknowledge that Janowski would be ending her employment at New Wellness.
In addition, New Wellness’s attempt to limit the clients Janowski could notify
about her resignation could be interpreted as an attempt to limit the number of
clients who might ultimately follow her to a different employer. This inference is
7
We recognize that the arbitration panel did not expressly reference this portion of the
contract or expressly find that New Wellness approved of Janowski accepting an offer of
employment, but our interpretation of the panel’s decision is arguably the most reasonable
interpretation when considering the totality of the panel’s discussion. Indeed, the panel
specifically noted that New Wellness’s behavior suggested that New Wellness “was tolerant of
Ms. Janowski serving clients within the context of another entity.” At a minimum, the “without
Company approval” language in the contract provides a “reasonable foundation” for the panel’s
ultimate conclusion that New Wellness had prematurely terminated Janowski’s employment.
See Baldwin-Woodville Area Sch. Dist. v. West Cent. Educ. Ass’n - Baldwin Woodville Unit,
2009 WI 51, ¶¶22-23, 317 Wis. 2d 691, 766 N.W.2d 591 (citation omitted).
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No. 2021AP1301
further buttressed by New Wellness’s subsequent letter, which expressly
acknowledged that Janowski would have a “new location” as a counselor.
¶23 When these two inferences are combined with the fact that
New Wellness did not immediately object to Janowski accepting new
employment, the arbitration panel could reasonably find that New Wellness
approved of Janowski accepting new employment so long as that employment had
not yet actually begun. Accordingly, the panel did not exceed its powers when
determining that New Wellness breached the employment contract by prematurely
terminating Janowski’s employment. The panel’s conclusion was supported by a
reasonable foundation in the terms of the employment contract, and there was
sufficient evidence to find that Janowski’s termination was not consistent with
New Wellness’s behavior, including its tacit approval of Janowski accepting other
employment to begin on a later date.
III. Calculation of the arbitration award
¶24 New Wellness also argues that the arbitration panel erred in its
calculation of Janowski’s lost wages because it did not consider Janowski’s
earnings at Counseling Specialists between June 11 and July 20, 2018.
New Wellness contends that “the award should have been reduced by the earnings
she actually had as a weekly employee of Counseling Specialists.” New
Wellness’s argument fails for two reasons.
¶25 First, the circuit court determined that New Wellness did “not
challenge[]” the calculation of the arbitration award on judicial review. We agree.
Aside from several minor discussions regarding the calculation of the award and
Janowski’s testimony about her earnings between June 11 and July 20, 2018,
New Wellness never asked the court to vacate or modify the award due to a
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No. 2021AP1301
miscalculation. Indeed, New Wellness did not discuss this issue in its letter to the
court outlining the relevant issues or in its final argument to the court.
Accordingly, New Wellness forfeited this argument. See Townsend v. Massey,
2011 WI App 160, ¶¶24-25, 338 Wis. 2d 114, 808 N.W.2d 155.
¶26 Second, New Wellness’s argument on appeal is largely undeveloped
and lacks citation to any legal authority or the employment contract.
New Wellness also fails to identify any evidence establishing that Janowski
actually received any earnings between June 11 and July 20, 2018. Janowski
testified that, “[b]ased on [her] knowledge, [she] did not [have earnings during that
time], but [she could not] recall.” Although New Wellness complains that
Janowski “has not produced her earnings as an employee of Counseling
Specialists,” it fails to explain why it could not have obtained those records during
arbitration. Notably, New Wellness was able to obtain other documents from
Janowski’s personnel file at Counseling Specialists and submitted those
documents to the arbitration panel. Thus, New Wellness has failed to establish
any error in the arbitration panel’s calculation of lost wages.
¶27 Finally, Janowski requests that we modify the judgment “to
rightfully compensate [her] for lost wages, interest and legal fees.” Janowski,
however, never filed a notice of cross-appeal. “A respondent who seeks a
modification of the judgment … appealed from … shall file a notice of
cross-appeal ….” WIS. STAT. RULE 809.10(2)(b) (emphasis added). Janowski’s
failure to file a notice of cross-appeal therefore precludes us from considering her
request to modify the judgment. See Borntreger v. Smith, 2012 WI App 35, ¶20,
340 Wis. 2d 474, 811 N.W.2d 447; see also Thomsen v. WERC, 2000 WI App 90,
¶2 n.2, 234 Wis. 2d 494, 610 N.W.2d 155 (“A respondent need not file a
cross-appeal if seeking an affirmance of the circuit court’s order or judgment on
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No. 2021AP1301
other grounds, but must file a cross-appeal if seeking a modification of that order
or judgment.”).
By the Court.—Judgment affirmed.
This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.
14