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State public policy wrongful discharge – how much does it matter whether other remedies are available?

August 20th, 2013  |  Joy Waltemath

State public policy wrongful discharge is all over the map – literally. This summer, there have been a handful of interesting cases addressing, in particular, the impact of other available remedies on the viability of a wrongful discharge claim. Not surprisingly, sometimes it matters, and sometimes not so much. Check out these examples:

Existence of other remedies? For example, in Iowa, an internal complaint by an assisted living facility’s marketing director that her employer was forging required staff training documents advanced a clearly defined and well-recognized public policy involving the welfare of dementia patients expressed in both the Iowa Code and administrative rules (Dorshkind v Oak Park Place of Dubuque II, LLC, August 2, 2013). Consequently, when her employer fired her for internally reporting her suspicions that supervisors had falsified state-mandated staff training documents for the assisted living facility’s dementia program, the Iowa Supreme Court found her discharge unlawfully undermined that policy, both by punishing her and by chilling the reporting by other employees for similar workplace illegalities. It didn’t matter, said the court, that there was an applicable statutory method for filing an external complaint, reasoning that whether the employee makes the complaint internally or externally does not change the public policy considerations.

But in Washington state, the existence of another avenue for making a complaint did matter. There, a state appellate court found that a terminated nurse practitioner failed to show her wrongful discharge suit was the only adequate means of promoting a public policy against billing fraud and inadequate standards of care, given the existence of a whistleblower statute that covered her concerns (Worley v Providence Physician Services Company,  July 23, 2013).  She was required to demonstrate that no other means of promoting the public policy existed than by her wrongful discharge claim, but state law allowed for filing whistleblower complaints with the Department of Health.

Perhaps it was also significant that the nurse had uncorrected performance issues and that she only complained about improper Medicare billing and inadequate care the day after she received a final warning for excessive tardiness, inferior work, inappropriate conduct, and failure to cooperate. Plus, said the court, she was actually terminated for removing protected patient health information from the premises, information she claimed she was faxing to the compliance specialist regarding her earlier complaints. She never, however, provided the compliance specialist with the information; she did provide it to her boyfriend, an attorney, though. This was a violation of the employer’s code of conduct.

No other civil remedies available. In Ohio, an employee who was fired because she voted for President Obama in the 2012 election satisfied the elements of a public policy wrongful discharge claim under Ohio law, a federal district court ruled (Kunkle v Q-Mark, Inc, June 28, 2013). Before the November election, her supervisor threatened employees with discharge if President Obama was reelected, saying Obama supporters would be the first to go if he won, The day after the election, the employee said she had voted a straight Democratic ticket; on November 9, she was fired. To establish a public policy wrongful discharge, she relied primarily on an Ohio statute barring employers from discharging a voter for taking time to vote, or intimidating a voter to induce her to vote (or not vote) for or against any candidate, two additional provisions of the state voting law, plus federal election law barring voter interference or intimidation. It wasn’t difficult for the court to find a clear public policy against persons threatening or intimidating others in an effort to compel their vote for a particular political candidate.

Although the employer argued that all these statutes provided penalty enough – criminal fines and imprisonment – to protect the public policy at stake so that there was no need for a wrongful discharge tort, the court disagreed, pointing out there was no civil penalty. Not only that, the court let the employee proceed against her supervisor individually, rejecting the argument that public policy wrongful discharge claims can’t be asserted against a supervisor in his or her individual capacity.

Fact that Title VII remedies available not controlling. Pointing out that the legal remedies available under two Oregon statutes on which an employee relied for her pregnancy bias and retaliation claims were not available at the time she was fired, the Oregon Court of Appeals refused to dismiss her common law wrongful discharge claim based on the same allegations (Kemp v Masterbrand Cabinets, Inc, July 17, 2013). Nor did the fact that she could have asserted a Title VII claim change the analysis, reasoned the court, because damages available under Title VII are capped.

Here, the employee filed suit for pregnancy discrimination and retaliation under Oregon statutes and also asserted a common law wrongful discharge claim. She prevailed at trial but her employer appealed, arguing the wrongful discharge claim should have been dismissed because the employee had adequate state and federal statutory remedies, and wrongful discharge is designed to fill a gap where a violation of public policy otherwise would not be adequately remedied. Disagreeing, the appeals court noted that the legal remedies available under the Oregon statutes for pregnancy bias were not available at the time of the alleged incidents. However, the fact that she also could have asserted a Title VII claim did not preclude her wrongful discharge claim in any event, because compensatory and punitive damages are capped under Title VII, and Congress made clear that Title VII remedies do not displace a common law remedy.

Explicit public policy required. Regardless of whether other remedies are available, though, the public policy under which an employee sues for wrongful discharge must be defined clearly. Consequently, an employee in Missouri who lost his job at a Honda dealership because his girlfriend bought a Honda from a competitor could not make out a wrongful discharge claim because the employer did not violate a clear mandate of public policy, a Missouri appeals court ruled (Hedrick v Jay Wolfe Imports I, LLC, July 30, 2013). The employee’s attempt via several disparate statutes to establish a state public policy that encouraged its citizens to conduct business freely was not the kind of explicit authority the public policy exception to the at-will doctrine required.

Unwritten dealership policy was that employees and members of their households were prohibited from buying a new Honda from another dealer without giving the dealership employer a chance to match the competitor’s price. But, when the employee approached the sales manager about a Honda for his live-in girlfriend, the only deal he was offered was $600 over the car’s regular price. She got a deal from a competitor for $1000 less than the dealership quote, and when the dealership found out, it fired him. He sued for wrongful discharge, cobbling together a variety of statutes that he claimed established a clear public policy of allowing citizens to conduct business freely. The appeals court wasn’t buying it, pointing out that at best, the employee was trying to do implicitly – based on the provisions of those statutes – what the law required, which was explicit authority mandating the public policy. Without that, his claim failed as a matter of law.