A Wisconsin jury recently awarded $26.6 million, $18 million of which were punitive damages, to a former Miller Brewing Company executive who was terminated after he was accused of sexual harassment by a coworker. Mackenzie v. Miller Brewing Co., 1997 WL 463195 (Wis Cir. Ct. July 1997.) In 1993, Jerold Mackenzie was fired from his $95,000 a year job after discussing a risque episode of the popular NBC sitcom "Seinfeld" with a female colleague.

Seinfeld Episode in Question

In the episode, actor Jerry Seinfeld is unable to remember his girlfriend's name, but recalls that it rhymes with a part of the female anatomy. Only after the girlfriend realizes Seinfeld doesn't know her name and storms off does Seinfeld remember and yell out "Dolores!" In recounting the episode to Patricia Best, his coworker, Mackenzie pointed to the word "clitoris," which he had photocopied from a dictionary. Mackenzie did not, however, say the word aloud or touch Best.

Best complained to Miller Brewing management that she considered Mackenzie's comments to be sexually harassing. Shortly thereafter, Miller fired Mackenzie. Mackenzie sued the company, Miller vice-president Robert Smith and Best, alleging that Smith and Best had unlawfully interfered with his employment.

A ten woman, two man jury agreed and awarded Mackenzie $26.6 million in damages, the largest award in Wisconsin history. Jurors concluded that Mackenzie's comments did not qualify as sexual harassment, and that attorneys for Miller had greatly exaggerated how offensive the "Seinfeld" episode was. The company had argued that Mackenzie's actions were the culminating event of a series of mistakes on the job which justified his termination, including another allegation of harassment four years before. Jurors, however, quickly sided with Mackenzie, stating that "just talk with no touching didn't strike [them] as that offensive."

The implications of the decision are clear. While allegations of sexual harassment must be dealt with quickly and effectively, they also should be dealt with fairly. As this case demonstrates, overreacting to alleged harassment can be as costly as failing to take prompt remedial action.

Appellate Court Overturns Award

The verdict was ultimately overturned by the court of appeals, Mackenzie v. Miller Brewing Company, 234 Wis.2d 1, (2000) and the judgment nullified. The case ultimately did not turn on a reverse sexual discrimination claim, but on misrepresentations by Miller Brewing Company. The Wisconsin Supreme Court upheld the appellate decision.

The appeal centered on the misrepresentations that Miller made to Mackenzie about his employment. Mackenzie worked from Miller Brewing from 1974 to 1993, moving up the company ladder in what the company called "grade levels." In about 1987, the company reorganized and adjusted some of the grade levels for some employees. One of those employees who had had his position adjusted downward was Mackenzie.

Mackenzie, concerned about the re-organization, asked whether or not his position and grade level had been affected. Miller Brewing Company lied to Mackenzie and said that his position was not affected. It was this lie and the misrepresentation by Miller that was the subject of the case review at the appellate level and then at the supreme court level. The Wisconsin Supreme court held that there is no such thing as a cause of action for intentional misrepresentation to induce continued employment and therefore Mackenzie had failed to state a cause of action upon which recovery could be based.

Neither the appellate court nor the supreme court took up a discussion of whether or not the Seinfeld episode discussion at work constituted sexual harassment.