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COURT OF APPEALS
NOTICE
DECISION
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.
June 18, 2013
A party may file with the Supreme Court a
Diane M. Fremgen                                                                                    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.
                                                                                                    Cir. Ct. Nos.                                   2011CV2577
Appeal Nos.                                      2012AP2256
2011CV4908
2012AP2257
STATE OF WISCONSIN                               IN COURT OF APPEALS
                                                 DISTRICT I
JUDITH PASKO,
PLAINTIFF-RESPONDENT,
V.
MILWAUKEE COUNTY,
DEFENDANT-APPELLANT.
ROBERT B. PORTH,
PLAINTIFF-RESPONDENT,
V.
MILWAUKEE COUNTY,
DEFENDANT-APPELLANT.




No.   2012AP2256
2012AP2257
APPEALS  from  judgments  of  the  circuit  court  for  Milwaukee
County:   WILLIAM S. POCAN, Judge.   Affirmed.
Before Curley, P.J., Fine and Brennan, JJ.
¶1                                                                                          FINE, J.    This is a sick-leave-benefits case similar to the one we
decided in Champine v. Milwaukee County, 2005 WI App 75, 280 Wis. 2d 603,
696 N.W.2d 245.   Indeed, as the circuit court recognized, Champine is dispositive
of the core issue.
¶2                                                                                          Milwaukee County appeals amended judgments in favor of Judith
Pasko and Robert B. Porth, former Milwaukee County employees.   The circuit
court consolidated the matters pursuant to the parties’ stipulation.    Milwaukee
County’s notice of appeal in both cases recites that the circuit court erroneously:
“[o]rdered  the  payment of  Plaintiff’s unused paid sick leave  accrued prior  to
Plaintiff’s voluntary promotion to [a] management position which did not offer
that benefit[.]”   Milwaukee County argues that:                                            (1) until Pasko and Porth retired,
it was free to modify the accrual of their sick-leave hours; (2) by accepting their
managerial  promotions,  Pasko  and  Porth  waived  their  right  to  some  of  their
accrued sick leave; and (3) the circuit court should have ordered that Pasko’s and
Porth’s use of sick leave be applied on a first-in, first-out basis, irrespective of
how much sick leave they actually took during the “first-in” period.   We review
de novo  the  legal  issues  decided  by  the  circuit  court.    See  Loth  v.  City  of
Milwaukee, 2008 WI 129, ¶10, 315 Wis. 2d 35, 39, 758 N.W.2d 766, 768.   The
circuit court’s findings of fact are invulnerable on appeal unless they are “clearly
erroneous.”   WIS. STAT. RULE 805.17(2) (“Findings of fact shall not be set aside
unless clearly erroneous, and due regard shall be given to the opportunity of the
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trial court to judge the credibility of the witnesses.”).   We affirm and commend the
circuit court for a well-reasoned and helpful written opinion.
I.
¶3                                                                                      Pasko started to work for Milwaukee County in July of 1987, and
was represented by the Wisconsin Federation of Nurses & Health Professionals
Union.   In April of 2004, she accepted a management position for which she got a
pay raise, and was no longer represented by the union.   Pasko retired from her
Milwaukee County employment in March of 2008.
¶4                                                                                      Porth started to work for Milwaukee County in December of 1984,
and was represented by the American Federation of State, County and Municipal
Employees Local 882.   In August of 2006, he accepted a management position for
which he got a pay raise, and was no longer represented by the union.    Porth
retired from his Milwaukee County employment in July of 2010.
¶5                                                                                      Before 2000, Milwaukee County permitted non-union employees to
get paid for unused sick leave but capped the payment accumulation at four-
hundred hours, plus sixteen-percent of any unused sick-leave hours exceeding four
hundred.   Champine, 2005 WI App 75, ¶3, 280 Wis. 2d at 609-610, 696 N.W.2d
at  248. The four-hundred-hour cap was removed in  2000 by an ordinance that
provided,  as  material,  that  those  non-union  members  of  the  “Employes’  [sic]
Retirement System” whose membership antedated  “January  1,  1994,” were to
“receive full payment of all accrued sick allowance at the time of retirement (total
hour[s] accrued times hourly rate at the time of retirement).   Such payment shall
be made in a lump sum.”   Id., 2005 WI App 75, ¶3 & ¶2 n.4, 280 Wis. 2d at 609-
610 & 608 n.4, 696 N.W.2d at 248 & n.4 (parenthetical in original).   Effective
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March 15, 2002, the cap was restored by a new ordinance.   As we explained in
Champine:   “Under the 2002 Ordinance, non-union employees who have accrued
sick allowance at the time of their retirement may claim a maximum of only fifty
days  (four hundred hours), plus sixteen hours for each additional one hundred
hours of accrued sick allowance.”   Id., 2005 WI App 75, ¶6, 280 Wis. 2d at 610-
611, 696 N.W.2d at 249.
¶6                                                                                    Neither  Pasko  nor  Porth  were  non-union  employees  before  they
accepted  their  managerial  promotions  and  were  thus  not  covered  by  the
ordinances.   Rather, their employment relationship with Milwaukee County was
governed by union contracts that had, according to the joint stipulation of the
parties to this appeal,  “provisions substantially similar to the”  2000 ordinance
applicable to non-union employees.   The parties’ stipulation agrees that the union
contracts affecting both Pasko and Porth provided, as material:                       “Members of the
Employees Retirement System, whose membership began prior to September 27,
1995  shall receive  full payment of  all accrued sick allowance  at  the  time  of
retirement.   Such payment shall be made in a lump sum.”   They also agree that,
“[n]one  of  the  union  contracts  were  changed  by  the                            2002  Ordinance.”
Nevertheless, Milwaukee County applied the four-hundred-hour/sixteen-percent-
overage cap to all of Pasko’s and Porth’s sick-leave accruals when they retired.
The parties stipulated:
                                                                                     “At the  time  of  retirement from the  County,  Pasko  had accrued
                                                                                      1,426.2 total hours of unused sick leave.”
                                                                                     “Upon retirement, the County applied the 400-Hour Rule to all of
Pasko’s accrued sick leave, resulting in a payout for 576 hours of her
1,426.2 hours of accrued unused sick leave.”   (Emphasis in original.)
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No.   2012AP2256
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                                                                                “At the time of retirement, Porth had accrued 2163.5 total hours of
                                                                                 unused sick leave.”
                                                                                “Upon retirement, the County applied the 400-Hour Rule to all of
                                                                                 Porth’s accrued sick leave, resulting in a payout for 688 hours of his
                                                                                 2163.5 hours of accrued unused sick leave.”   (Emphasis in original.)
¶7                                                                               In  granting  judgment  to  Pasko  and  Porth,  the  circuit  court
determined, as material here, that:
(1)                                                                              Pasko and Porth had vested rights in the sick-leave hours that they
accumulated before they became non-union managerial employees.
(2)                                                                              Pasko and Porth did not by accepting their promotions waive their
contractual entitlement to the unused sick leave they accumulated
before they became non-union managerial employees.
(3)                                                                              Milwaukee  County  could  not  “assign[]  sick  leave  usage  to  the
earliest accrued hours” in Pasko’s and Porth’s accounts if they did
not  use  the  sick  leave  during  that  time,  because  that  would
“effectively be taking away the benefit that was earned while  it
accrued and went unused.”
¶8                                                                               We address Milwaukee County’s contentions in turn.
                                                                                 II.
A. Vested rights in accumulated sick-leave hours.
¶9                                                                               The circuit court held that the sick-leave hours that Pasko and Porth
accumulated under their unions’ contracts with Milwaukee County vested as they
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No.   2012AP2256
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were earned.   Milwaukee County challenges this, arguing in essence that Pasko
and Porth should not be able to bank those hours in order to get a cash payout at
retirement because sick leave is designed to allow ill persons to stay home rather
than go to work where they might not only infect others but also delay their
recuperation.    Milwaukee County ignores, however, that its contracts with the
unions representing Pasko and Porth permitted precisely that.   Although, as we
have  seen,  Milwaukee  County  reinstated  for  non-union  employees  the  four-
hundred-hour/sixteen-percent-overage cap on the accumulation of sick-leave hours
used to calculate the retirement payout, it did not do so in the union contracts
under which Pasko and Porth worked before they were promoted to managerial
non-union positions.   Thus, the circuit court recognized that Champine required
the conclusion that during their tenure under those union contracts, Pasko’s and
Porth’s sick-leave hours accumulated uncapped and became vested as they were
earned.
¶10    Champine  concerned  whether  the  2000  Ordinance  permitted  the
non-union employees:                                                                   “to have all accrued sick [leave] allowance through March
14, 2002, [the day before the effective date of the 2002 ordinance that restored the
four-hundred-hour cap] paid out in full at retirement.”   Champine, 2005 WI App
75, ¶15, 280 Wis. 2d at 614, 696 N.W.2d at 250.   We held that it did, and that the
employees were:                                                                        “entitled, upon retirement, to a payout consistent with the terms
of the 2000 Ordinance of their sick allowance that had accrued as of March 14,
2002, and is not used prior to retirement.”   Id., 2005 WI App 75, ¶15, 280 Wis. 2d
at 614, 696 N.W.2d at 250-251.   (Footnote omitted.)   We further explained:
Although  an  employee  does  not  automatically  have  the
right to be paid for accrued sick allowance, an employer
may provide a payout provision.   Where that occurs, as in
this  case,  such  a  benefit  represents  a  form  of  deferred
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No.   2012AP2256
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compensation that is earned as the work is performed.   The
benefit can be changed, but only as it is related to work not
yet performed…
… The only issue, then, is whether the ability to be
paid  for  all  accrued  sick  allowance  already  earned  is  a
benefit that could be taken away on March 15, 2002, after
the employees had performed work while the promise was
in effect, or whether that benefit attached itself to all hours
accrued as of March 14, 2002.   Just as the employees were
entitled to, and received, pay increases for the work they
performed during the time the wage increase was in effect,
they are also entitled to retain the benefit of an unlimited
payout of sick allowance that accrued prior to the time that
the  new  policy outlined  in  the  2002  Ordinance  became
effective.    Once  work  is  performed  while  a  contract  or
unilateral  promise  is  in  effect,  permitting  retroactive
revocation of that promise would be unjust and inequitable.
Id.,                                                                                       2005 WI App  75,  ¶¶16-17,  280 Wis.  2d at  615-616,  696 N.W.2d at  251
(internal citation omitted).
¶11    Loth approved Champine’s vested-as-earned deferred-compensation
analysis, noting that while the 2000 ordinance was in effect, the sick-leave hours
earned by employees covered by the ordinance was the quid pro quo for their
work as it was performed.    Loth,  2008 WI  129,  ¶46,  315 Wis.  2d at  53,  758
N.W.2d at 775 (“An employee accrues sick allowance (and may earn the right to
receive payout for the accrued sick allowance) gradually as the employee performs
his  or  her  work.”)  (parenthetical  in  original).    Loth  held  that  the  Champine
situation was thus different from what Albert Loth wanted:   enforcement of the
City of Milwaukee’s post-retirement health-insurance obligation that he said was
triggered when he had satisfied the fifteen-year employment eligibility threshold
even though the terms of that obligation were later changed before he retired.
Loth, 2008 WI 129, ¶13, 315 Wis. 2d at 40, 758 N.W.2d at 768.
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¶12    Loth held, in contrast to Champine, where the employees earned
their sick leave by their day-by-day work, and, critically, could make use of the
sick-leave hours that they had thereby earned, that Loth was not entitled to the
post-retirement health-insurance benefit until he had actually retired, which was
the vesting trigger in that case.   Loth, 2008 WI 129, ¶28, 315 Wis. 2d at 46, 758
N.W.2d at  771  (“The documents demonstrate that the City’s no-premium-cost
health  insurance  plan  for  retirees  came  into  effect  only  when  a  management
employee like Loth retired after attaining the age of 60 and having been in City
service for at least 15 years.”).   Thus, unlike the situation in Champine and here,
Loth’s acceptance of the City’s unilateral offer of post-retirement health-insurance
was not his day-to-day work, but rather his retirement, and this permitted the City
to alter the terms before that final acceptance.   This is akin to the situation in
Champine and here where Milwaukee County could prospectively change the
sick-leave formula that would affect the day-by-day accumulation from the date of
that change forward.   See Loth, 2008 WI 129, ¶39, 315 Wis. 2d at 50, 758 N.W.2d
at 773 (“The City is not attempting to modify any contractual obligation to Loth.
Loth  did  not  accept  the  City’s  unilateral  promise  of  no-premium-cost  health
insurance benefits; he had not fully performed the services entitling him to such
benefits when the City amended in [sic] policy in 2002 effective in 2004.”); id.,
2008  WI  129,  ¶45  n.24,  315  Wis.  2d  at  53  n.24,  758  N.W.2d  at  774  n.24
(Champine “did not hold that the retired employees were entitled to receive full
payout for any sick allowance that they had accrued after the amended ordinance
took effect on March 14, 2002.                                                          [Champine] stated that ‘[t]he ability to obtain
payout  for  sick  allowance  accrued  after  March                                     14,                                               2002,  may  be  modified
prospectively by the County.’” (citation of quoted source omitted)).   That under
Milwaukee County ordinances, an employee may forfeit his or her accumulated
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No.   2012AP2256
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sick leave if he or she is either laid off for “in excess of two (2) years and one
(1) day  or                                                                            [is  no  longer  employed  by  the  County  because  of]  voluntary  or
involuntary  separation,”  Milwaukee  County  Code  of  General  Ordinances,
§ 17.18(3), does not mean that the accumulated sick leave is not otherwise vested,
as Milwaukee County argues.1   If Milwaukee County wanted to be able to modify
the vesting trigger from a day-by-day accrual, as recognized by Champine to
something else, and thereby preserve its freedom to make retroactive changes, it
could have sought to do so in its contracts with the unions representing Pasko and
Porth.   It did not.
¶13    The circuit court correctly held that Pasko and Porth were entitled to
accumulate  uncapped  sick-leave  hours  by  virtue  of  the  union  contracts  that
governed their work for Milwaukee County before they accepted promotion to
non-union managerial positions, and that those accumulations vested before they
took their non-union management positions.
B. Alleged waiver.
¶14    Although Milwaukee County could have conditioned the offer of
promotions to Pasko and Porth on their acceptance of the four-hundred-hour cap
retroactive to the period during which they were entitled to accumulate uncapped
sick leave by virtue of the unions’ contracts with Milwaukee County, Milwaukee
County did not do so.    Now, having let that opportunity slip from its fingers,
Milwaukee County seeks to impose waiver to accomplish that result.                     “[W]aiver,”
of course, “is the intentional relinquishment or abandonment of a known right.”
1  Milwaukee  County  Code  of  General  Ordinances,                                   §                                                                         17.18(3)  may  be  found  at:
http://library.municode.com/index.aspx?clientId=12598 (last visited June 10, 2013).
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State v. Ndina, 2009 WI 21, ¶29, 315 Wis. 2d 653, 670, 761 N.W.2d 612, 620
(quoted source and quotation marks omitted).                                             “Although the waiving party need
not intend a waiver, he or she must act intentionally and with knowledge of the
material facts.”   Nugent v. Slaght, 2001 WI App 282, ¶13, 249 Wis. 2d 220, 227-
228, 638 N.W.2d 594, 597; Attoe v. State Farm Mutual Automobile Ins. Co., 36
Wis. 2d 539, 545, 153 N.W.2d 575, 579 (1967) (“Waiver has been defined as a
voluntary  and  intentional  relinquishment  of  a  known  right.     However,  in
establishing waiver, it is not necessary to prove an actual intent to waive.   Such
waiver may be shown by conduct.”) (footnotes omitted).
¶15                                                                                      “[D]eterminations of waiver generally present mixed questions of
fact  and  law.”     All  Star  Rent  A  Car,  Inc.  v.  Wisconsin  Department  of
Transportation, 2006 WI 85, ¶15, 292 Wis. 2d 615, 626, 716 N.W.2d 506, 511.
As noted earlier, a circuit court’s findings of fact are invulnerable on appeal unless
they are “clearly erroneous.”   See WIS. STAT. RULE 805.17(2).   We review de novo
whether the circuit court based its findings on a correct legal analysis.   See All
Star Rent A Car, 2006 WI 85, ¶15, 292 Wis. 2d at 626, 716 N.W.2d at 511.
¶16    The circuit court applied the correct intentional-relinquishment-of-a-
known-right analysis, and recognized that although “waiver” does not require a
specific intent to give up a known right, the act alleged to be a waiver must be
intentional and with knowledge.   Further, the circuit court also recognized, as it
wrote in its opinion, that the “knowledge of facts, which is a necessary element of
waiver, may be constructive or actual.   Attoe v. State Farm Mut. Auto. Ins. Co., 36
Wis. 2d 539, 546, 153 N.W.2d 575[, 579] (1967).   Constructive knowledge ‘is that
which one who has the opportunity, by the exercise of ordinary care, to possess.’
Id.”
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¶17    In rejecting Milwaukee County’s contention that Pasko and Porth
waived their rights to the uncapped sick leave to which they were entitled under
their  unions’  contracts  with  Milwaukee  County,  the  circuit  court  found  both:
(1) that Milwaukee County did not show that either Pasko or Porth intentionally
gave up their right to the accumulated non-capped sick leave, and also (2) that
they did not have the requisite knowledge, actual or constructive, from which that
relinquishment could be found.   The circuit court explained:
Just because Ms. Pasko and Mr. Porth may have known
about   the                                                                              400-Hour-Rule                        [applicable   to   non-union
employees covered by the  2002 Ordinance], the County
failed to prove that Ms. Pasko and Mr. Porth knew that if
they took promotions, they would waive their rights to the
[earned]  sick  leave  that                                                              [they]  had  already  accrued  and
vested with them while they were union employees.
Indeed,  to  even  suggest  otherwise,  would  impose  the  burden  of  speculative
crystal-ball gazing to divine what others might argue down the road was “waiver.”
This is especially true here because Pasko and Porth could reasonably assume that
Champine governed the earned/vesting issue in connection with uncapped sick-
leave accumulations, and that their acceptance of a promotion that then bound
them to  the  four-hundred-hour  cap,  would  not  put  them at  risk  of  having  to
retroactively give up the vested sick-leave hours that they had already earned.
¶18    Nevertheless, apparently recognizing that the circuit court’s findings
of fact cannot seriously be challenged by virtue of WIS. STAT. RULE 805.17(2),
which  its  briefs  do  not  even  cite,  Milwaukee  argues  implied  waiver:            “By
accepting their promotions without saying anything about the sick leave allowance
reduction or their retention of the union version, they waived whatever right they
now claim to a larger sick leave allowance.”                                             (Emphasis added.)   As we have
already noted, however, if Milwaukee County wanted to condition Pasko’s and
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No.   2012AP2256
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Porth’s promotions on their retroactive acceptance of the four-hundred-hour cap,
Milwaukee County could have done so.   It did not, and the circuit court did not err
in concluding that neither Pasko nor Porth waived their right to the earned and
vested sick leave they accumulated while still working for Milwaukee County
under their unions’ contracts with the County.
C. Apportioning sick leave in calculating the final payout at retirement.
¶19    As we have seen, Pasko and Porth accumulated unused sick leave
(1) during their employment by Milwaukee County under the union contracts; and
(2) during  their  employment  by  Milwaukee  County  as  non-union  managerial
employees.   In assessing how much Milwaukee County owed them at retirement
for their unused sick leave, Milwaukee County wanted to deduct their sick-leave
starting with their non-managerial employment.   As phrased by the circuit court:
Milwaukee  County sought  “application of  a  ‘First In,  First Out’”  calculation,
which  would  “assign[]  sick  leave  usage  to  the  earliest  accrued  hours  in  the
employee’s account.”   Again, as phrased by the circuit court, Milwaukee County
claimed  that  this  was  its  “‘customary practice.’”    Pasko  and  Porth,  however,
argued that they were entitled to, again as phrased by the circuit court, “a damages
calculation that takes the amount of sick leave hours that accrued and vested as a
union employee, multiplied by the hourly rate, added to the amount of hours
accrued as a non-union employee under the  400-Hour rule.    Then, the monies
already paid would be subtracted from the total.”   The differences in the amounts
payable  were:                                                                            Pasko—$21,779.63  under  her  calculation  method  versus
$16,136.41 under Milwaukee County’s; Porth—$30,174.18 under his calculation
method versus $30,046.12 under Milwaukee County’s.   The circuit court adopted
the calculation method sought by Pasko and Porth.
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¶20    As the circuit court recognized, when Champine determined that the
non-union employees covered by that decision, “who did not retire prior to [March
15, 2002,] [a]re ‘entitled, upon retirement, to a payout consistent with the terms of
the 2000 Ordinance of their sick allowance that had accrued as of March 14, 2002,
and is not used prior to retirement,’” see id., 2005 WI App 75, ¶15, 280 Wis. 2d at
614, 696 N.W.2d at 250-251, Champine took no position “as to how post-March
14, 2002, use of accrued sick allowance or accrual of additional sick allowance is
to be counted[,]” see id., 2005 WI App 75, ¶15 n.5, 280 Wis. 2d at 614 n.5, 696
N.W.2d at  251 n.5.   The circuit court noted, however, that all the plaintiffs in
Champine  were  non-union  employees  subject  to  the  ordinances  and  thus
Champine “never [had to] consider[] what pool of accrued sick leave time (union
vs. non-union) used days would properly be depleted from.”                               (Parenthetical in
original.)
¶21    The  circuit  court  declined  to  rule  whether  the  first-in,  first-out
method  “is actually the County’s  ‘customary practice,’” as Milwaukee County
asserted.   Rather, the circuit court concluded that to allow that method to invade
the sick leave Pasko and Porth accumulated while they were working under the
no-cap  provisions  of  their  unions’  contracts  with  Milwaukee  County,  which
became vested as they earned that sick leave, “would effectively be taking away
the benefit that was earned while it accrued and went unused [by Pasko and Porth]
as union employees.”    The circuit court thus distinguished the  situation from
where  the  parties  in  Champine,  after  remand  agreed  to  a  first-in,  first-out
apportionment,  from  this  case,  where  the  method’s                                  “application  across  two
categories  of  employment                                                               (non-union  and  union)  would  essentially  divest
Plaintiffs of their more valuable union-accrued sick leave, for work they did as
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non-union employees.”   (Parenthetical in original.)   Whether our review is de novo
or deferential, we agree.
¶22    First, the Champine parties’ post-remand settlement is not binding,
especially since we do not have a full mosaic of the competing interests that were
negotiated.    Second,  and  critically,  as  the  circuit  court  reasoned,  permitting
invasion of the sick leave that Pasko and Porth earned by virtue of their unions’
contracts  with  Milwaukee  County for  sick-leave  hours that  they did not take
during their tenure as union-represented employees, would undo that vesting.   We
affirm the circuit court’s resolution of this issue as well.
By the Court.—Judgments affirmed.
Recommended for publication in the official reports.
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