## Facts

- A county educational board hired Elaine Lukaszewski as a speech and language therapist and assigned her to a school about 45 miles from her home; she commuted rather than relocate.
- The board offered and Lukaszewski accepted a contract for the 1978–1979 school year at an annual salary of $10,760.
- Before the school year began, Lukaszewski received a higher-paying offer ($13,000) from a daycare center near her home and sought to resign.
- The board refused to release her from the contract and directed her to return to work; it also warned the daycare center against interfering with her contract performance.
- Lukaszewski briefly returned to the board’s school but soon left again after becoming upset and seeking medical care.
- A physician diagnosed high blood pressure, which Lukaszewski attributed to job-related stress; she submitted a second resignation citing health reasons and then took the daycare job.
- The board sought a replacement; only one qualified applicant applied, and the board hired her at an annual salary more than $1,000 higher than Lukaszewski’s contract salary.
- The board sued for breach, seeking the salary differential as damages.
- The trial court found a breach and awarded the salary differential; the court of appeals agreed on breach but denied damages because the replacement was more qualified and thus allegedly “more valuable.”

## Issues

1. Whether Lukaszewski’s resignation for asserted health reasons excused performance or constituted a breach of her employment contract.
2. Whether the board could recover, as expectation damages, the additional salary paid to a replacement employee who was more qualified than the breaching employee.
3. Whether the board reasonably mitigated damages by hiring the only qualified applicant at a higher salary.

## Decision

- The Wisconsin Supreme Court affirmed the finding of breach.
- The court reversed the denial of damages and held the board could recover expectation damages measured by the additional salary paid to obtain a substitute therapist.
- The court concluded the board acted reasonably to mitigate damages given the limited applicant pool and the need to fill the position.

## Legal Principles

- Contract remedies protect the nonbreaching party’s expectation interest by placing it in the position it would have occupied had the contract been performed.
- When an employee wrongfully resigns, an employer may recover the reasonable additional cost of obtaining substitute performance, including a salary differential, subject to mitigation.
- The fact that a replacement employee is more qualified does not, by itself, eliminate or offset the employer’s recoverable loss; damages are measured by the bargain made (services at the contract salary), not by an after-the-fact qualitative assessment of a “better” substitute.
- A nonbreaching party satisfies the duty to mitigate by making reasonable efforts to secure substitute performance; if only one qualified replacement is available, hiring that person at a higher salary may be reasonable.

## Conclusion

The court held that the therapist’s health-based resignation did not excuse performance and that the board was entitled to expectation damages equal to the reasonable additional cost of hiring a substitute, even though the substitute was more qualified than the breaching employee.


Handicapped Child.’s Educ. Bd. of Sheboygan Cnty. v. Lukaszewski, 332 N.W.2d 774 (Wis. 1983)