Gregg Becker v. Community Health Systems, Inc., d/b/a

Court of Appeals of Washington·Decided August 14, 2014·No. 31234-8·Published

Opinion

FILED

AUGUST 14,2014

In the Office of the Clerk of Court W A State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

GREGG BECKER, ) No. 31234-8-111 )

Respondent, )

)

V. )

)

COMMUNITY HEALTH SYSTEMS, INC. ) PUBLISHED OPINION d/b/a COMMUNITY HEALTH SYSTEMS ) PROFESSIONAL SERVICES ) CORPORATION d/b/a COMMUNITY ) HEALTH SYSTEMS PSC, INC., d/b/a ) ROCKWOOD CLINIC P.S.; and ) ROCKWOOD CLINIC, P.S., )

)

Petitioners. )

BROWN, A.C.J. - Rockwood Clinic PS (Rockwood) and its parent company, Community Health Systems Inc. (CHS), successfully petitioned for discretionary review of a decision denying their CR 12(b)(6) motion to dismiss Gregg Becker's claim for wrongful discharge in violation of public policy. Rockwood and CHS contend Mr. Becker cannot establish the jeopardy element because a myriad of statutes and regulations adequately promote the public policy of honesty in corporate financial reporting, rendering a private common law tort remedy superfluous. We disagree with Rockwood and CHS, and affirm.

No. 31234-8-111 Becker v. Cmty. Health Sys. Inc.

FACTS

In February 2011, Rockwood recruited Mr. Becker to be its chief financial officer (CFO), a job he performed admirably. CHS had acquired Rockwood with a business strategy to improve profitability. Upon doing so, CHS represented to investors and creditors it expected Rockwood to sustain a $4 million operating loss in 2012. However, in October 2011, Mr. Becker correctly projected Rockwood's earnings before interest, taxes, depreciation, and amortizatjon (EBITDA) as showing a $12 million operating loss, in 2012. This projection was significantly important to investors and creditors as a measure of Rockwood's and, by relation, CHS's financial health. Additi0nally, CHS had to report this projection to the U.S. Securities and Exchange Commission (SEC). As CFO, Mr. Becker had to ensure this projection was not false or misleading.

Rockwood and CHS demanded Mr. Becker recalculate his EBITDA projection to show a target $4 million operating loss in 2012. Mr. Becker refused to submit the $4 million figure because he reasonably believed it would require overstating income and understating expenses, fraudulently misleading investors and creditors in violation of criminal laws. Rockwood and CHS rated his job performance as '"unacceptable,''' placed him on a probationary '''performance improvement plan,''' and gave him an ultimatum to either submit the $4 million figure or lose his job. Clerk's Papers (CP) at

735-36. Then, he told Rockwood's chief executive officer (CEO) and CHS's internal

t

auditor he thought Rockwood and CHS were using the false $4 million figure to !

!

fraudulently mislead investors and creditors. Mr. Becker hypothesized that, upon i

I

acquiring Rockwood, CHS procured investments and credits using the false $4 million

r

,

i
i
2

I

!

I

I

No. 31234-8-111 Becker v. emty. Health Sys. Inc.

figure. He reported his concerns to Rockwood and CHS but did not report the misconduct to law enforcement agencies. Soon, Mr. Becker saw signs that Rockwood and CHS were preparing to use his subordinate to submit the false $4 million figure under the auspices of his department. Mr. Becker detailed these matters in writing to Rockwood and CHS, advising them he would have no choice but to resign unless they

responded appropriately to abate the misconduct. They sent him a one-line e-mail I ,

accepting his resignation the next day.

In February 2012, Mr. Becker sued in superior court for wrongful discharge in violation of public policy. He additionally filed a whistleblower retaliation complaint with

the U.S. Occupational Safety and Health Administrative (OSHA). Apparently, his OSHA

I

complaint remains unresolved. Rockwood and CHS removed his civil suit to federal

I

district court. But after Mr. Becker amended his complaint to remove references to

1

federal law, the federal district court remanded his case.

Back in superior court, Rockwood and CHS moved onsuccessfully to dismiss Mr.

Becker's amended complaint under CR 12(b)(6) for failure to state a cognizable claim

for relief. The trial court certified the ruling for interlocutory review regarding whether

I

t

Mr. Becker can establish the jeopardy element in his claim for wrongful discharge in violation of public policy. This court granted discretionary review regarding whether other available means for promoting the public policy of honesty in corporate financial reporting are adequate.

I

,

3

I

I

I

I

No. 31234-8-111 Becker v. Cmty. Health Sys. Inc.

ANALYSIS

The issue is whether the trial court erred under CR 12(b)(6) in declining to dismiss Mr. Becker's claim for wrongful discharge in violation of public policy. Rockwood and CHS contend Mr. Becker cannot establish the jeopardy element because a myriad of statutes and regulations adequately promote the public policy of honesty in corporate financial reporting, rendering a private common law tort remedy superfluous. Our review is de novo. See Kors/und v. DynCorp Tri-Cities Servs., Inc., 156 Wn.2d 168, 182, 125 P.3d 119 (2005); Hoffer v. State, 110 Wn.2d 415, 421,755 P.2d 781 (1988), A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief," CR 8(a)(1). Otherwise, a trial court may dismiss the complaint on motion for "failure to state a claim upon which relief can be granted." CR 12(b)(6). Dismissal is proper if, accepting all factual allegations as true, "it appears beyond doubt that the plaintiff can prove no set of facts, consistent with the complaint, which would entitle the plaintiff to relief." Corrigal v. Ball & Dodd Funeral Home, Inc., 89 Wn.2d 959, 961, 577 P.2d 580 (1978); see Barnum v. State, 72 Wn.2d 928, 929-30, 435 P.2d 678 (1967). Thus, dismissal is proper where the plaintiff has an '''insuperable bar to relief" appearing on. the face of the complaint. Hoffer, 110 Wn.2d at 421 (quoting 5 CHARLES WRIGHT & ARTHUR MILLER, FEDERAL PRACTICE § 1357, at 604 (1969»; accord Cutlerv. Phillips Petroleum Co., 124 Wn.2d 749,755,881 P.2d 216 (1994). We will

consider hypothetical situations, including facts argued for the first time on appeal, that

I

I

the complaint could conceivably allege to justify relief for the plaintiff. Halvorson v. f

r
f

~

f

4 !

i
1
i

No. 31234-8-111 Becker v. Cmty. Health Sys. Inc.

Dahl, 89 Wn.2d 673, 674-75,574 P.2d 1190 (1978); Bravo v. Dolsen Cos., 125 Wn.2d

745,750, 888 P.2d 147 (1995).

Washington provides a private common law tort remedy when an employer discharges an at-will employee "for a reason that contravenes a clear mandate of public policy."1 Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 233, 685 P.2d 1081 (1984). This claim usually arises where the employer discharges the employee for (1) "refusing to commit an illegal act"; (2) "performing a public duty or obligation"; (3) "exercis[ing] a legal right or privilege"; or (4) engaging in '''whistleblowing' activity." Dicomes v. State, 113 Wn.2d 612, 618, 782 P.2d 1002 (1989). But the elements are the same regardless of what conduct prompts this claim.

To prevail on a claim of wrongful discharge in violation of public policy, a plaintiff must establish (1) "the existence of a clear public policy (the clarity element),,; (2) "that discouraging the conduct in which [the plaintiff] ·engaged would jeopardize the public

policy (the jeopardy element),,; (3) "that the public-policy-linked conduct caused the

I

dismissal (the causation element); and (4) U[t]he defendant [is not] able to offer an

overriding justification for the dismissal (the absence ofjustification element)." Gardner I

t

v. Loomis Armored, Inc., 128 Wn.2d 931, 941, 913 P.2d 377 (1996) (adopting these

elements from HENRY H. PERRITT, JR., WORKPLACE TORTS: RIGHTS AND LIABILITIES §§ 3.7, .14, .19, .21 (1991) [hereinafter PERRITT, WORKPLACE TORTS]). The parties dispute whether Mr. Becker's amended complaint establishes the jeopardy element.

1This claim is available regardless of whether the employer discharges the.

Free access — add to your briefcase to read the full text and ask questions with AI

Gregg Becker v. Community Health Systems, Inc., d/b/a, (Wash. Ct. App. 2014).

Gregg Becker v. Community Health Systems, Inc., d/b/a (Gregg Becker v. Community Health Systems, Inc., d/b/a) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Slayton v. American Express Co.
604 F.3d 758 (Second Circuit, 2010)
Janus Capital Group, Inc. v. First Derivative Traders
131 S. Ct. 2296 (Supreme Court, 2011)
Jeffrey Wiest v. Thomas Lynch
710 F.3d 121 (Third Circuit, 2013)
Gary M. GOSSETT v. TRACTOR SUPPLY COMPANY, INC.
320 S.W.3d 777 (Tennessee Supreme Court, 2010)
Dicomes v. State
782 P.2d 1002 (Washington Supreme Court, 1989)
Jones v. Industrial Electric-Seattle, Inc.
768 P.2d 520 (Court of Appeals of Washington, 1989)
Barnum v. State
435 P.2d 678 (Washington Supreme Court, 1967)
Wilson v. City of Monroe
943 P.2d 1134 (Court of Appeals of Washington, 1997)
Hoffer v. State
755 P.2d 781 (Washington Supreme Court, 1988)
Ryan v. Dan's Food Stores, Inc.
972 P.2d 395 (Utah Supreme Court, 1998)
Corrigal v. Ball & Dodd Funeral Home, Inc.
577 P.2d 580 (Washington Supreme Court, 1978)
Wilmot v. Kaiser Aluminum & Chemical Corp.
821 P.2d 18 (Washington Supreme Court, 1991)
State v. Swanson
554 P.2d 364 (Court of Appeals of Washington, 1976)
Bravo v. Dolsen Companies
888 P.2d 147 (Washington Supreme Court, 1995)
Smith v. Bates Technical College
991 P.2d 1135 (Washington Supreme Court, 2000)
In Re Marriage of Firchau
558 P.2d 194 (Washington Supreme Court, 1977)
Halvorson v. Dahl
574 P.2d 1190 (Washington Supreme Court, 1978)
Thompson v. St. Regis Paper Company
685 P.2d 1081 (Washington Supreme Court, 1984)
Cutler v. Phillips Petroleum Co.
881 P.2d 216 (Washington Supreme Court, 1994)