## Facts

- William A. Kumpf served as president and CEO of Lincoln National Sales Corp. of Wisconsin (Lincoln Wisconsin) from 1973 to August 1983 and owned 20% of its stock; Lincoln National Sales Corp. (Lincoln Sales) owned the remaining 80%.
- Two of Lincoln Wisconsin’s three directors were employees of Lincoln Sales, the marketing arm of Lincoln National Life Insurance Co. (Lincoln Life).
- In 1981, Orin A. Steinhaus, an executive of Lincoln Life, was tasked with revising an unprofitable sales structure that included closing and consolidating agencies.
- In August 1983, Steinhaus directed a consolidation of five Midwestern agencies and instructed Lincoln Sales’s board representatives to approve merging Lincoln Wisconsin into Lincoln Chicago Corp. (Lincoln Chicago).
- Lincoln Wisconsin’s board approved the merger 2–1 over Kumpf’s dissent, eliminating Lincoln Wisconsin as a separate entity and ending Kumpf’s job.
- Kumpf’s employment was at will, though treated as contractual for purposes of a tortious-interference theory under Wisconsin law.
- After consolidation, Steinhaus became president of the merged agency, and his compensation increased in part due to the reallocation of agency income previously associated with Kumpf’s operation.

## Issues

1. Whether corporate officers and affiliated entities may be liable for tortious interference with an at-will employment relationship when their conduct occurs as part of corporate restructuring.
2. Whether interference is privileged when motivated by legitimate business reasons, even if accompanied by personal financial benefit.
3. Whether the jury could be instructed that the privilege is defeated only if defendants acted solely from revenge, malice, or other purely personal motives.

## Decision

- The Seventh Circuit affirmed the judgment for the defendants following a defense jury verdict.
- The court held the challenged conduct was privileged because it occurred in the course of a legitimate business reorganization aimed at improving efficiency and reducing losses.
- The court upheld the jury instruction requiring proof that defendants acted solely from improper personal motives to defeat the privilege.
- Evidence that Steinhaus benefited financially from the consolidation did not, without proof of exclusively personal malice, render the interference improper.

## Legal Principles

- An at-will employment relationship may qualify as a “contract” capable of supporting a tortious-interference claim under Wisconsin law.
- Corporate officers and related entities are privileged to interfere with contractual relations when acting to protect or advance the corporation’s legitimate business interests.
- The privilege is not lost due to mixed motives; ordinary self-interest or anticipated financial gain does not make interference improper when legitimate business purposes are also present.
- The privilege is defeated only when interference is motivated exclusively by improper, non-business considerations such as personal spite or malice.

## Conclusion

The court treated the elimination of Kumpf’s position as a byproduct of a broad consolidation program and held that, under Wisconsin law, corporate actors remain privileged to interfere with an at-will employment relationship where restructuring serves legitimate business aims, even if decisionmakers also expect personal financial benefit.


Kumpf v. Steinhaus, 779 F.2d 1323 (7th Cir. 1985)