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

• Court: Court of Appeals of Washington
• Decided: August 14, 2014
• Docket: 31234-8
• Status: 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 ,

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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 1 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. employee expressly or constructively. Korslund, 156 Wn.2d at 177 (citing Snyderv. Med. Servo Corp. of E. Wash., 145 Wn.2d 233,238,35 P.3d 1158 (2001».

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

To establish the jeopardy element, the plaintiff must show he or she "engaged in

particular conduct, and the conduct directly relates to the public policy, or was

necessary for the effective enforcement of the public policy." Id. at 945 (citing PERRITT,

WORKPLACE TORTS, supra, § 3.14, at 75-76). Thus, the plaintiff must argue '''other

means for promoting the policy ... are inadequate.'" Id. (omission in original) (quoting

PERRITT, WORKPLACE TORTS, supra, § 3.14, at 77). In other words, the plaintiff must

argue the actions he or she took were the "only available adequate means" to promote

the public policy. Danny v. Laidlaw Transit Servs., Inc., 165 Wn.2d 200, 222, 193 P.3d

128 (2008).

Our Supreme Court first recognized the claim of wrongful discharge in violation of

public policy in Thompson, 102 Wn.2d at 232. There, a divisional controller sued his

corporate employer, alleging the employer discharged him, as a warning to other

controllers, for instituting accurate accounting procedures complying with the Foreign I Corrupt Practices Act of 1977 (FCPA), 15 U.S.C. §§ 78m, 78dd-1 to -2, 78ff. Id. at 223,

234. The Thompson court held the divisional controller could recover under a private I common law tort remedy if he could prove his allegations. Id. at 234. The court I reasoned the employer's action would contravene the public policy prohibiting bribery of

foreign officials and requiring transparency in accounting by discouraging other

controllers from complying with the FCPA. Id. at 234.

Our Supreme Court first articulated and applied the jeopardy element in Gardner,

128 Wn.2d at 941, 945-46. There, an armored vehicle driver sued his employer for

wrongful discharge in violation of public policy, alleging the employer discharged him for

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

exiting the vehicle to disarm an attacker inside a bank. Id. at 933-35. The Gardner

court concluded the threat of discharge would jeopardize the public policy of supporting

altruism and protecting human life by discouraging an employee like the driver from

rescuing a person from imminent life threatening harm. Id. at 945-46. The court

reasoned the driver's conduct was both directly related to the public policy and

necessary to effectively promote the public policy. Id. While the driver technically could

have,remained in the vehicle and summoned help through its radio, public address

system, or siren, the court reasoned his conduct was the only available adequate

means for serving the public policy because other people were not then prepared to

help. Id. at 935, 945-46.

In Korslund, 156 Wn.2d at 182-83, our Supreme Court held the comprehensive

remedies available under the Energy Reorganization Act of 1979 (ERA), 42 U.S.C. §

5851, adequately promoted public health and safety, and prevented fraudulent use of

public funds in the nuclear industry. Specifically, the ERA prohibits specific employers

from taking adverse employment action against employees for, among other things,

reporting violations of nuclear industry laws. 42 U.S.C. § 5851 (a). If an employer takes

adverse employment action, the employee may complain to an administrative agency

with power to investigate the claim. Id. § 5851 (b)(1)-(2)(A). If the agency decides the

claim has merit, the ERA requires it to order the employer abate the violation; reinstate

the employee to his or her former position with the same compensation and

employment terms, conditions, and privileges; and pay the employee back pay,

compensatory damages, as well as attorney and expert fees and costs. Id. §

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

5851 (b){2)(B). But if the agency does not decide within one year, the ERA allows the

employee to sue the employer in federal district court. Id. §·5841{b)(4). Because these

remedies adequately promoted the relevant public policy, the Korslund court was

unwilling to provide a private common law tort remedy. See 156 Wn.2d at 182-83.

In Cudney v. ALSCa, Inc., 172 Wn.2d 524, 531·33,259 P.3d 244 (2011), our

Supreme Court held the robust remedies available under the Washington Industrial

Safety and Health Act of 1973 (WISHA), RCW 49.17.160, adequately promoted

workplace safety. Specifically, WISHA prohibits general employers from taking adverse

employment action against employees for, among other things, reporting violations of

workplace safety laws. RCW 49.17.110, .160(1). If an employer takes adverse

employment action, the employee may complain to an administrative agency with power

to investigate the claim. RCW 49.17.160(2). If the agency decides the claim has merit,

WISHA requires it to sue the employer in superior court on behalf of the employee. Id.

But if the agency decides the opposite, WISHA allows the employee to sue the

employer in superior court on his or her own behalf. Id. In either case, the court may

order all appropriate relief, including requiring the employer to cease the violation as

well as restore and compensate the employee. Id. Again, because these remedies

adequately promoted the relevant public policy, the Cudney court was unwilling to

recognize a provide common law tort remedy. See 172 Wn.2d at 536,538.

In Cudney, our Supreme Court additionally held law enforcementaction available

under Washington statutes criminalizing drunk driving adequately protected the public

from drunk driving. Id. at 536-38. There. the employee reported to his private employer

No. 31234-8-111

that his supervisor drove a company vehicle while intoxicated. Id. at 527-28. But the·

employee did not inform law enforcement agencies, who theoretically could have

stopped the supervisor. Id. at 537. In those circumstances, the Cudney court could not

say the actions the employee took were the 'only available adequate means' to protect

the public from drunk driving. Id. at 536-38.

Then, in Piel v. City of Federal Way, 177 Wn.2d 604, 609-17,306 P.3d 879

(2013), our Supreme Court held the administrative remedies·available through the

Public Employment Relations Commission (PERC) under chapter 41.56 RCW were

inadequate, on their own, to fully vindicate public policy when a public employer

discharges a public employee for asserting collective bargaining rights. Unlike Korslund

and Cudney, Piel involved a prior case holding PERC remedies failed to fully address

the broader public interests involved because it protected personal contractual rights

solely. Id. at 616-17 (quoting Smith v. Bates Technical Coli., 139 Wn.2d 793, 805, 809,

991 P.2d 1135 (2000)). And unlike Korslund and Cudney, Piel involved a statute

declaring PERC remedies supplement others and must be liberally construed to

accomplish their purpose. Id. at 617 (quoting RCW 41.56.905). In those

circumstances, the Piel court recognized a private common law tort remedy as

necessary to fully vindicate public policy. Id. at 617.

Meanwhile, our Division of this court issued two opinions adhering to Korslund

and Cudney, though our Supreme Court recently remanded one case for

reconsideration in light of Piel. See Worley v. Providence Physician Servs. Co., 175

Wn. App. 566,574-76,307 P.3d 759 (2013) (holding whistleblower protections available

under the Washington health care act, RCW 43.70.075, adequately promoted

workplace safety, ensured compliance with the accepted standard of care, and

prevented fraudulent billing in the health care industry): Rose v. Anderson Hay & Grain

Co., 168 Wn. App. 474, 478-79, 276 P.3d 382 (2012) (holding the employee remedies

available under the Commercial Motor Vehicle Safety Act, 49 U.S.C. § 31105,

adequately protected truck drivers who refuse to violate commercial motor vehicle

safety laws, even though a statute declared these remedies do not preclude others),

remanded, _ Wn.2d _ , 2014 WL 1325569. Division One of this court issued

another opinion applying Korslund and Cudney, and our Supreme Court denied review

of that case despite Piel. See Weiss v. Lonnquist, 173 Wn. App. 344, 353-60, 293 P.3d ! 1264 (holding the misconduct reporting and disciplinary process prescribed hy the

Washington Rules of Professional Conduct, RPC 3.3 and 8.3, adequately promoted \ attorney candor toward the tribunal), review denied, 178 Wn.2d 1025 (2013).

Our recent cases faithfully analyzed the jeopardy element in a manner we

thought the reasoning of Korslund and Cudney required. We now realize our jeopardy

analysis overemphasized the abstract adequacy of statutes and regulations while

forgetting the concrete public policy impact of chilling protected employee conduct. See

HENRY H. PERRin, JR., EMPLOYEE DISMISSAL LAW AND PRACTICE § 7.06[A], at 7-82.1 to.4

(Supp. 2013) [hereinafter PERRITT, EMPLOYEE DISMISSAL]' This approach tended to

foreclose private common law tort remedies for employees any time statutes or

regulations provided some means of promoting public policy. See Cudney, 172 Wn.2d

at 548 (Stephens, J., dissenting). But doing so actually undermined public policy

enforcement by chilling employee conduct advocating compliance with statutes and

regulations. See PERRin, EMPLOYEE DISMISSAL, supra, § 7.06[A], at 7-82.3 to.4-1; id. §

7.09[D], at 7-173 (5th ed. 2006). Thus, in Mr. Becker's case, we reform our jeopardy

analysis under the reasoning of Thompson, Gardner, and Piel.

As the trial court concluded, Mr. Becker's amended complaint implicates the

public policy of honesty in corporate financial reporting because he alleged he was

constructively discharged after refusing to submit a false or misleading EBITDA

projection. To establish the jeopardy element, Mr. Becker must show the threat of

constructive discharge would jeopardize the public policy of honesty in corporate

financial reporting by discouraging a CFO like him from refusing to submit a false or

misleading EBITDA projection. Mr. Becker's refusal must have been either directly

related to the public policy or necessary to effectively enforce the public policy. Thus,

Mr. Becker's refusal must have been the only available adequate means for promoting

the public policy. For the reasons discussed belOW, we think it undoubtedly was.

Initially, the parties dispute whether Mr. Becker's case concerns constructive

discharge for refusing to commit an illegal act, engaging in whistleblower activity, or

both. But Mr. Becker clearly elected his legal theory where he alleged, "Rockwood and

CHS engaged in retaliation and in adverse employment action against [Mr. Becker] for

his refusal to engage in improper accounting practices" involving "illegal and unethical

acts." CP at 744 (emphasis added). Mr. Becker did not allege Rockwood and CHS

constructively discharged him for engaging in whistleblower activity. However, any

whistleblower options available to him are still relevant in determining whether his

refusal was the only available adequate means for promoting the public policy.

The parties mainly dispute if other available means for promoting the public

policy of honesty in corporate financial reporting are adequate in Mr. Becker's case.

First, Rockwood and CHS cite section 806(a) of the Sarbanes-Oxley Act of 2002 (SOX),

18 U.S.C. § 1514A, and section 922(a) of the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010, 15 U.S.C. § 78u-6. These statutes provide

comprehensive whistleblower protections. See 15 U.S.C. § 78u-6(h)(1)-(2); 18 U.S.C. §

1514A(a)-(c). These statutes apply even when an employee reports misconduct he or

she reasonably believes is "about to" or "'likely to'" occur. 12 C.F.R. § 240.21 F-

2(b)(1)(i) (implementing 15 U.S.C. § 78u-6); Wiestv. Lynch, 710 F.3d 121, 133 (3d Cir.

2013) (quoting Sylvesterv. Parexellnt'l LLC, No. 07-123,2011 WL 2165854, at *13 I I (U.S. Dep't of Labor Admin. Review Bd. May 25,2011» (construing 18 U.S.C. § I 1514A). But because these statutes declare their remedies do not preclude others, see f I

15 U.S.C. § 78u-6(h)(3); 18 U.S.C. § 1514A(d), we have the "strongest possible I f i evidence" these remedies are inadequate, on their own, to fully vindicate public policy, f Piel, 177 Wn.2d at 617. Therefore, we do not reach the parties' remaining arguments f on these statutes. t Second, Rockwood and CHS cite numerous statutes imposing criminal penalties

on a person responsible for false or misleading statements related to corporate financial I 1 reporting. SOX section 302(a) requires both a CEO and CFO to certify in periodic

corporate financial reports that I I i {

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

(2) based on the officer's knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading; (3) based on such officer's knowledge, the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition and results of operations of the [corporation] as of, and for, the periods presented in the report.

15 U.S.C. § 7241(a). SOX section 906(a) imposes criminal penalties on a CEO or CFO

who willfully certifies the report knowing it contains a false or misleading statement. 18

U.S.C. § 1350{c){1)-{2). Under long-standing criminal principles, a corporation is

responsible for the crime of its CEO or CFO if the corporation "aids, abets, counsels,

commands, induces or procures [the] commission [of that crime]." 18 U.S.C. § 2{a).

SOX section 903(a) and (b) enhance criminal penalties for mail fraud and wire

. fraud while section 807{a) separately criminalizes securities fraud. 18 U.S.C. §§ 1341,

1343, 1348. Under SOX section 902{a), attempting or conspiring to commit any of

these crimes invokes "the same penalties as those prescribed for the offense, the

commission of which was the object of the attempt or conspiracy." 18 U.S.C. § 1349.

Section 24 of the Securities Act of 1933, 15 U.S.C. § 77x, and section 32{a) of

the Securities Exchange Act of 1934, 15 U.S.C. § 78ff(a), impose criminal penalties on

a person who willfully violates securities laws, including by knowingly making false or

misleading statements related to corporate financial reporting or connected to the offer

or sale of securities. See also Securities Act § 17(a), 15 U.S.C. §§ 77q(a); Securities

Exchange Act § 10{b), 15 U.S.C. § 78j(b); SEC Rule 10b-5, 17 C.F.R. § 240.10b-5.

Moreover, SOX section 11 07{a) imposes criminal penalties on a person who

"knowingly, with the intent to retaliate, takes any action harmful to any person, including

interference with the lawful employment or livelihood of any person, for providing to a

law enforcement officer any truthful information relating to the ... possible commission

of any Federal offense." 18 U.S.C. § 1513(e).

Even a state statute imposes criminal penalties on a corporate agent who

"knowingly make[s] or publish[es] or concur[s] in making or publishing any written ...

report ... or statement of [the corporation's] affairs or pecuniary condition, containing

any material statement that is false or exaggerated." RCW 9.24.050. This statute

exists to protect members of the public who may rely on such reports or statements but

are not conversant with the corporation's finances. State v. Swanson, 16 Wn. App. 179,

185-86,554 P.2d 364 (1976) (citing State v. Pierce, 175 Wash. 461, 467,27 P.2d 1083

(1933); State v. O'Brien, 143 Wash. 636,639,255 P. 952 (1927». Attempting,

conspiring, or soliciting another person to commit this crime is also a crime. RCW

9A.28.020(1), .030(1), .040(1).

Third, Rockwood and CHS cite statutes and regulations providing an investor a

private right of action against a person responsible for false or misleading statements

connected to the offer or sale of securities. 2 See Securities Exchange Act § 10(b), 15

2 Accepting all factual allegations as true, we assume, without deciding, the EBITDA projection Rockwood and CHS demanded would not have been protected by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-5(c)(1). The projection certainly would have been a forward-looking statement. See id. § 78u-5(i)(1); Prime Mover Capital Pariners L.P. .v. Elixir Gaming Techns., Inc., 898 F. Supp. 2d 673,689 & n.95 (S.D.N.Y. 2012) (citing Slayton v. Am. Express Co., 604 F.3d 758,766-67 (2d Cir. 2010». But the complaint implies Rockwood and CHS knew the projection would have been false or misleading, and material to investors and creditors. See 15 U.S.C. § 78u-5(c)(1)(A)(ii), (B). Because

U.S.C. § 78j(b); SEC Rule 10b-5, 17 C.F.R. § 240.10b-5; Securities Act of Washington,

RCW 21.20.010, .430(1); Superintendent oflns. of N. Y. v. Bankers Life & Cas. Co., 404

U.S. 6,13,92 S. Ct. 165,30 L. Ed. 2d 128 (1971); Janus Capital Grp., Inc. v. First

Derivative Traders, _ U.S. _,131 S. Ct. 2296, 2301,180 L. Ed. 2d 166 (2011).

Finally, Rockwood and CHS cite statutes granting the SEC administrative powers

against a person responsible for false or misleading statements connected to the offer

or sale of securities. Specifically, the SEC may initiate an investigation upon complaint

or its own initiative, and, if it determines a person has violated or is about to violate

securities laws, it may issue a cease and desist order; impose civil monetary penalties;

and sue in federal district court for injunctive relief, disgorgement of profits, prohibition

from future service as a corporate director or officer, and additional civil monetary

penalties. See Securities Act §§ 8A, 20,15 U.S.C. §§ 77h-1, 77t; Securities Exchange { Act §§ 21, 21B, 21C, 15 U.S.C. §§ 78u, 78u-2, 78u-3. I These statutes and regulations provide comprehensive criminal, civil, and

administrative enforcement mechanisms promoting the important public policies they

secure. But those means of promoting public policy do not foreclose private common

law tort remedies for employees. See Cudney, 172 Wn.2d at 549-50 (Stephens, J.,

dissenting). "The central idea of the public policy tort is to create privately enforceable

disincentives for ... employers to use their power in the workplace to undermine

important public policies," PERRITT, EMPLOYEE DISMISSAL, supra, § 7.06[Al, at 7-82.3

(Supp. 2013). And the public policy tort may sometimes coexist with comprehensive

the pleadings do not address the issue, we do not consider whether the projection 15 No. 31234-8-111 Becker v. emty. Health Sys. Inc.

criminal, civil, and administrative enforcement mechanisms. See Piel, 177 Wn.2d at

614-16. Such coexistence is essential where, as here, the threat of constructive

discharge would jeopardize the public policy of honesty in corporate financial reporting

by discouraging a CFO like Mr. Becker from refusing to submit a false or misleading I f EBITDA projection. l Mr. Becker claimed hisEBITDA projection correctly showed a $12 million I operating loss in 2012 but Rockwood and CHS demanded he recalculate his projection i 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 I l 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 ! I ultimatum to either submit the $4 million figure or lose his job. CP at 735-36. Then, he r told Rockwood's CEO and CHS's internal auditor he thought Rockwood and CHS were f using the false $4 million figure to fraudulently mislead investors and creditors. Mr. f t r Becker hypothesized that, upon acquiring Rockwood, CHS procured investments and f credits using the false $4 million 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 I I f ;.

matters in writing to Rockwood and CHS, advising them he would have no choice but to I , f would have contained any meaningful cautionary statement. See id. § 78u-5(c)(1)(A)(i). f f ! 16 : t f t No. 31234-8-111 Becker v. Cmty. Health Sys. Inc.

resign unless they responded appropriately to abate the misconduct. They sent him a

one-line e-mail accepting his resignation the next day.

Mr. Becker's case is "[t]he most compelling case for protection" under a public

policy tort because by instructing him to commit a crime for which he would be

personally responsible, Rockwood and CHS forced him to choose between the

consequences of disobeying his employer and the consequences of disobeying criminal

laws. JANIE F. SCHULMAN & NANCY M. MODESITT, WHISTLEBLOWING: THE LAw OF

RETALIATORY DISCHARGE ch. 5.11.A.1., at 101 (2d ed. 2004). Recognizing this dilemma, I "most courts have readily responded ... by recognizing a cause of action" in similar

cases. Id. ch. 5.II.A.1.a., at 102; see also id. ch. 5.11.A.1.a., at 5-7 (Supp. 2013). I l I For example, in McGanity v. Berlin Metals, Inc., 774 N.E.2d 71,75-79 (Ind. Ct.

App. 2002), a CFO sued his corporate employer for wrongful discharge in violation of

public policy, alleging the employer discharged him for refusing to fraudulently

underreport tax liability in violation of criminal laws. The triat court granted the employer

judgment on the evidence and the Indiana Court of Appeals reversed, partly reasoning

the common law would not countenance a scenario where the employer could abuse its

workplace authority by giving the CFO an ultimatum to either commit an illegal act for

which he would be personally responsible or lose his job. Id. at 76-78.

Similarly, in Gossett v. Tractor Supply Co., 320 S.W.3d 777, 779-80 (Tenn.

2010), a CFO sued hi~ corporate employer for wrongful discharge in violation of public

policy, alleging the employer discharged him for refusing to make misleading account

alterations that would have produced misleading SEC filings. The trial court granted the

employer summary judgment and the Tennessee Supreme Court reversed, partly

reasoning the common law did not require the CFO to show he reported the misconduct

externally after he refused to participate in it. Id. at 787-89.

The jeopardy analysis in Mr. Becker's case "proceeds from the proposition that

permitting such dismissals would encourage conduct in violation of [criminal laws],

because employers could shield themselves from detection." PERRITT, EMPLOYEE

DISMISSAL, supra, § 7.06, at 7-72 (Supp. 2012). We recognize the jeopardy element is

difficult to satisfy where, as here, statutes and regula~ions provide comprehensive

criminal, civil, and administrative enforcement mechanisms promoting the important

public policies they secure. See id. § 7.06, at 7-69 to -71. But the jeopardy analysis in

Mr. Becker's case does not end there. The jeopardy element becomes easier to satisfy

where, as here, the employee has special responsibilities or expertise connected with

the public policy and other enforcement mechanisms are less likely to succeed because

they depend on the employee's individual pro-compliance efforts. See id. § 7.06, at 7­

71; id. § 7.09[0], at 7-159 (5th ed. 2006). In those circumstances, chilling employee

conduct advocating compliance with statutes and regulations renders public policy

enforcement uncertain, at best, or a matter of chance, at worst. See Cudney, 172

Wn.2d at 548-49 (Stephens, J., dissenting); PERRITT, EMPLOYEE DISMISSAL, supra, §

7.06[A], at 7-82.4-1 (Supp. 2013).

In sum, we follow the reasoning of Thompson, Gardner, and Piel to conclude Mr.

Becker'S amended complaint establishes the jeopardy element. Accepting all factual

allegations as true, the threat of constructive discharge would jeopardize the public

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

policy of honesty in corporate financial reporting by discouraging a CFO like Mr. Becker

from refusing to submit a false or misleading EBITDA projection. Mr. Becker's refusal

was both directly related to the public policy and necessary to effectively enforce the

public policy. And, Mr. Becker's refusal was the only available adequate means for

promoting the public policy, given the uncertainty of other enforcement mechanisms and

their dependence on his individual pro-compliance efforts. We must evaluate each

public policy tort "in light of its particular context." Piel, 177 Wn.2d at 617. Because I Korslund and Cudney addressed different enforcement mechanisms, they do not dictate

the outcome in Mr. Becker's case. See id. Therefore, the trial court did not err under

CR 12(b)(6) in declining to dismiss Mr. Becker's claim for wrongful discharge in violation

of public policy.

Affirmed.

I CONCUR:

~c\

Lawrence-Berrey, J.

No. 31234-8-III

FEARING, J. (concurring) - The author of the lead opinion admirably analyzes the

tort of wrongful discharge in violation of public policy and the tort's jeopardy element,

and I concur in the decision of the majority. I agree with the majority that the statutes

and regulations, upon which Rockwood Clinic and its parent relies, are closer in nature to

the statutes and regulations at issue in Thompson v. St. Regis Paper Co., 102 Wn.2d 219,

685 P.2d 1081 (1984) and Piel v. City ofFederal Way, 177 Wn.2d 604,609-17,306 P.3d

879 (2013) rather than at issue in Korslund v. DynCorp Tri-Cities Servs., Inc., 156 Wn.2d

168,125 P.3d 119 (2005) and Cudneyv. ALSCa, Inc., 172 Wn.2d 524,531-33,259 PJd

244 (2011). More importantly, I accept the significance of the majority's observation

that the Sarbanes-Oxley Act of2002 (SOX) and the Dodd-Frank Wall Street Reform and

Consumer Protection Act of2010 (Dodd-Frank), despite including comprehensive

whistleblower protections, declare their remedies to be nonexclusive. See 15 U.S.C. §

78u-6(h)(3); 18 U.S.C. § 1514A(d).

I write separately, however, because I cannot reconcile the teachings of Piel and

Cudney. Yes, one may find distinguishing features between the two decisions, but those

differences pale in importance when considering principles upon which the jeopardy

element is based. The two decisions, combined with other high court opinions, create

confusion amongst practitioners and lower court judges as to the nature and extent of the

jeopardy element of a claim for wrongful discharge in violation of public policy. In No. 31234-8-III

Becker v. Cmty. Health Sys. Inc. (concurrence)

addition to deciding disputes between parties, appellate decisions are meant to declare

and explain law and to provide guidance to lawyers, litigants, and lower courts,

particularly when a busy tort is the subject matter. Pronouncements on the subject of the

jeopardy element offer puzzlement, not direction. I thought, upon reading the ruling in

Cudney, that the tort languidly lay, on life support, in the intensive care unit. Piel revived

the tort. But practitioners and trial courts must wonder if the next decision will return the

tort to the sick bay.

As a cause of action matures, courts insist on promulgating a list of elements

necessary to a successful suit. Therefore, in Gardner v. Loomis Armored, Inc., 128

Wn.2d 931, 941, 913 P.2d 377 (1996), the state high court congealed a claim for

wrongful discharge in violation of public policy into four elements by relying on the

treatise, HENRY H. PERRITT JR., WORKPLACE TORTS: RIGHTS AND LIABILITIES (1991).

As one of the four elements, plaintiff must establish that discouraging the conduct in

which the plaintiff engaged would jeopardize the public policy. The purpose of the i } jeopardy element is to guarantee '''an employer's personnel management decisions will f not be challenged unless a public policy is genuinely threatened.'" Ellis v. City of 1 Seattle, 142 Wn.2d 450, 460, 13 P.3d 1065 (2000) (quoting Gardner, 128 Wn.2d at 941­

42). The jeopardy element was implicitly already part of a prima facie case since the I 2

f \

f ! f I No. 31234-8-III Becker v. Cmty. Health Sys. Inc. (concurrence)

plaintiff needed to prove his or her firing contravened a clear mandate of public policy.

Thompson, 102 Wn.2d at 232.

As elements emerge from the legal kiln, courts enamel each element with

unnecessary gloss. Gardner went beyond listing jeopardy as one of the four elements of

the tort of wrongful discharge. The landmark decision added a fluffy description of the

element, fraught with ambiguity and nuance that created the puzzlement about which I

write. A critical passage in Gardner lies on page 945:

[1] Under the second element, the employee's discharge must jeopardize the public policy. [2] To establish jeopardy, plaintiffs must show they engaged in particular conduct, and the conduct directly relates to the public policy, or was necessary for the effective enforcement of the public policy. [Henry H.] Perritt, [Jr., Workplace Torts: Rights and Liabilities] § 3.14, at 75-76. [3] This burden requires a plaintiff to "argue that other means for promoting the policy ... are inadequate." Perritt § 3.14, at 77. [4] Additionally, the plaintiff must show how the threat of dismissal will discourage others from engaging in the desirable conduct.

128 Wn.2d at 945. I numbered the sentences for ease of discussion. Unfortunately, the

Gardner decision did not limit its description of the jeopardy element to the first sentence

or initial statement that discouraging the plaintiff's conduct must jeopardize public

policy.

The Gardner court wrote in the second sentence of the passage that, to establish

the jeopardy element, plaintiff must also show the particular conduct, in which she

engaged, directly relates to the public policy, or was necessary for the effective 3 No. 31234-8-III Becker v. Cmty. Health Sys. Inc. (concurrence)

enforcement of the public policy. 128 Wn.2d at 945 (citing PERRITT § 3.14, at 75-76).

Note that this component of the jeopardy element is in the alternative. The sentence

employs the word "or." This "language is a paraphrase of Perritt's treatise (1991), which

clearly states the jeopardy analysis in the disjunctive, i.e., the conduct furthers public

policy either because the policy directly promotes the conduct or because the conduct is

necessary to effective enforcement of the policy. PERRITT, supra § 3.14, at 75-76."

Cudney, 172 Wn.2d at 540 (Stephens, J., dissenting). If the plaintiff proves her conduct

directly relates to a public policy, she should not need to prove her conduct was necessary

to effectively enforce the policy. The tort of wrongful discharge in violation of public

policy would be easier to apply if Gardner ended its discussion of the jeopardy element

there.

Gardner added two more sentences. The third sentence reads, "This burden

requires a plaintiff to 'argue that other means for promoting the policy ... are

inadequate.'" 128 Wn.2d at 945 (quoting PERRITT § 3.14, at 77). This third sentence

launched the many appellate decisions that give rise to the current unpredictability

particularly because its relationship to the second or previous sentence in Gardner lacks

exposition. Showing the lack of other means to enforce the public policy should not be a

requirement if the plaintiffs conduct directly relates to the public policy. Showing the

lack of another adequate means of enforcing the public policy should only be required if 4 No. 31234-8-III

the plaintiff seeks to prove the tort by showing her conduct was necessary to effectively

enforce the policy.

Gardner added even more language to the jeopardy element that now frequently

introduces a case's discussion of the element. In the fourth sentence, the high court

wrote, "Additionally, the plaintiff must show how the threat of dismissal will discourage

others from engaging in the desirable conduct." Gardner, 128 Wn.2d at 945.

In later decisions, the state high court imposed more restrictions to the jeopardy

element. For instance, in order to establish the jeopardy element, a plaintiff must show

that the actions the plaintiff took were the '" only available adequate means'" to promote

the public policy. Cudney, 172 Wn.2d at 530 (quoting Danny v. Laidlaw Transit Servs.,

Inc., 165 Wn.2d 200,222, 193 P.3d 128 (2008)). The point of the jeopardy prong of the

tort is to consider whether the statutory protections are adequate to protect the public

policy, not whether the claimant could recover more through a tort claim. Cudney, 172

Wn.2d at 534. Going even further, the other means of promoting the public policy need

not be available to a particular individual so long as the other means are adequate to

safeguard the public policy. Hubbardv. Spokane County, 146 Wn.2d 699,717,50 P.3d

602 (2002) (citing PERRITT, supra, § 3.14, at 77). As can be seen, the jeopardy element

is encumbered with many layers of rules beyond the employee simply showing that her

conduct directly related to the public policy.

5 No. 31234-8-II1

I Decision after decision has impliedly held that regardless of whether plaintiff's

conduct directly relates to the public policy, plaintiff must prove that means other than

her civil lawsuit for damages are inadequate to enforce the public policy. Piel, 177

Wn.2d 604; Cudney, 172 Wn.2d 524; Danny, 165 Wn.2d 200; Korslund, 156 Wn.2d 168; J: t t

Hubbard, 146 Wn.2d 699; Ellis, 142 Wn.2d 450; Smith v. Bates Technical Coli., 139 f

Wn.2d 793,991 P.2d 1135 (2000); Wilmot v. Kaiser Aluminum & Chemical Corp., 118 I Wn.2d 46,821 P.2d 18 (1991); Worleyv. Providence Physician Servs. Co., 175 Wn. J App. 566,307 P.3d 759 (2013); Weiss v. Lonnquist, 173 Wn. App. 344, 359,293 P.3d ! I - I I 1264, review denied, 178 Wn.2d lO25 (2013); Rose v. Anderson Hay & Grain Co., 168 ! Wn. App. 474, 276 P.3d 382 (2012); review granted, 180 Wn.2d 1001,327 P.3d 613

(2014); Wilson v. City ofMonroe, 88 Wn. App. 113, 123-24, 943 P.2d 1134 (1997). I Stated differently, if another "available adequate means" promotes the public policy, I l ~

plaintiffloses even ifher conduct directly impacts the public policy. Danny, 165 Wn.2d I I at 222. Nearly all, if not all, public policies have alternative means for enforcement.

Washington decisions often entail reviewing a statutory scheme to determine

whether the other available remedies are adequate, and, more in particular, whether the

remedies are adequate for the fired employee. Nevertheless, according to another

inconsistent rule, whether remedies are adequate for the employee should be immaterial

since the other means of promoting the public policy need not be available to a particular 6 No. 31234-8-III

individual so long as the other means are adequate to safeguard the public policy,

Hubbard, 146 Wn.2d at 717.

Cases irreconcilably examine whether the other means are "adequate." For

example, some decisions stand for the proposition that statutory remedies are inadequate,

for purposes of the jeopardy element, when the remedies may not allow recovery of

emotional distress damages for the discharged employee. Piel, 177 Wn.2d 604; Smith,

139 Wn.2d 793; Wilmot, 118 Wn.2d 46; Wilson, 88 Wn. App. 1l3. Both Piel and Smith

address RCW 41.56.160, a portion of the Public Employees Relations Act. The statute

allows the Public Employees Relations Commission to award "payment of damages and

the reinstatement of employees" if the employer engages in an unfair labor practice.

RCW 41.56.160. Each plaintiff was permitted to proceed with his or her tort claim i 1 because whether emotional distress damages could be awarded under the statute was not

clear.

Wilmot, 118 Wn.2d 46, examined RCW 51.48.025(4), which prohibits an

employer from discharging an employee for filing a workers compensation claim. The

statute authorizes the director of the Department of Labor & Industries (Department) to

sue, on behalf of the employee, in superior court, and for the court "to order all

appropriate relief including rehiring or reinstatement of the employee with back pay,"

RCW 51.48.025(4). The Wilmot court also allowed the employee to proceed with a tort I I 7 J ~ , ;. ;

f i ! I No. 31234-8-III

Becker v. Cmty. Health 8ys. Inc. (concurrence)

action because it was unclear whether the statute allowed for an award of emotional

distress damages.

Wilson, 88 Wn.2d 113, explored RCW 49.17.160, a portion of the Washington

Industrial Safety and Health Act, which prohibits an employer from discriminating

against an employee who files a complaint about work safety with the Department of

Labor & Industries. The statute allows an employee to file a complaint of discrimination

with the Department, and, if the Department refuses to file suit against the employer, the

employee may file suit on his own. The statute allows the superior court "for cause

shown, ... restrain violations ... and order all appropriate relief including rehiring or

reinstatement of the employee to his or her former position with back pay." RCW

49.17.160. The Wilson court allowed the employee to proceed with a private suit because

it was unclear whether the statute allowed for an award of emotional distress damages.

But Piel, Wilmot, and Wilson conflict with Cudney, which teaches that whether the

claimant could recover more through a tort claim is irrelevant to the jeopardy analysis. I t Therefore, whether plaintiff can recover emotional distress damages under an alternative

remedy should be unimportant.

Cudney addresses the same statute, RCW 49.17.160, as Wilson. The two cases

have conflicting outcomes. Although Wilson is a court of appeals decision, the majority

decision in Cudney does not even mention Wilson. Nor does the majority decision in

8 I I f r t t t No. 31234-8-III

\ Cudney mention established precedence that, ifthe employee cannot recover emotional

distress damages under the alternate remedy, the plaintiff satisfies the jeopardy element.

Cudney ignores rather than overrules the contradictory decisions.

Wilson contradicts Jones v. Industrial Electric-Seattle, Inc., 53 Wn. App. 536,

539, 768 P.2d 520 (1989). In Jones, a worker also complained he was fired for reporting

unsafe working conditions. Michael Jones, however, did not file a complaint with the

Department within the 90-day time period afforded under the statute. This court

dismissed his suit for wrongful discharge on the ground that he did not timely complain

to the Department. Wilson did not mention the decision in Jones.

Piel, Smith, Wilmot, and Wilson also conflict with Hubbard, which instructs that

the other means of promoting the public policy need not be available to the plaintiff. So,

whether the plaintiff can recover any damages should be unimportant. The Public

Employees Relations Act, the workers compensation laws, and the Washington Industrial

Safety and Health Act of 1973 (WISHA) all provide remedies to punish employers who

violate their provisions. These statutory schemes even afford some recovery for the

discharged employee.

A principal basis upon which we base our decision, in the pending appeal, is

language in SOX and Dodd-Frank that mentions its respective remedies are not

exclusive. A number of decisions rely upon similar language in the statute being 9 No. 31234-8-III

examined. Piel, 177 Wn.2d 604; Rose, 168 Wn. App. at 478. But such statutory terms

should be irrelevant in ajeopardy analysis, since the tort is independent of the statute and

the tort fails ifthere is another remedy to enforce the public policy, regardless of whether

the remedy benefits the discharged employee. Cudney, 172 Wn.2d 524; Danny, 165

Wn.2d at 222; Hubbard, 146 Wn.2d at 717. Also, decisions have allowed the employee

to proceed with a private action even without such language in the pertinent statute. t Smith, 139 Wn.2d 793; Bravo v. Dolsen Cos., 125 Wn.2d 745, 888 P.2d 147 (1995); I Wilmot, 118 Wn.2d 46; Wilson, 88 Wn. App. 113. l The majority in Piel distinguished between the statute at issue in its decision, I RCW 41.56.905, and the statute at issue in Cudney. As previously mentioned, Piel r involved the Public Employees Relations Act, which includes the language, "~The

provisions of this chapter are intended to be additional to other remedies and shall be I l liberally construed to accomplish their purpose.'" Piel, 177 Wn.2d at 617 (quoting I t RCW 41.56.905). No similar language was identified in WISHA, the statutory scheme

at issue in Cudney. This distinction between the two decisions is unsatisfactory given the

other conflicting language between the two decisions. Also, the test is not whether the

alternate remedy declares itself exclusive, but rather whether the remedy is adequate.

In short, Cudney and Piel cannot be reasonably reconciled. The dissent in Cudney

is correct that the "result departs from long-standing precedent in Washington." Cudney, 10 No. 31234-8-111

172 Wn.2d at 538 (Stephens, J., dissenting). The dissent in Piel is also correct that "in

Cudney, we emphasized that whether the jeopardy element is met hinges on the adequacy

of the alternative remedies available to protect the public policy, not on whether the

remedies fully compensate the individual claimant." Piel, 177 Wn.2d at 632-33

(Johnson, J.M., J., dissenting). Cudney and Piel begin at different departure points and

travel in opposite directions. They are two ships passing in the dark of night because

they seek to advance different objectives.

1 could discuss other examples of pertinent inconsistencies in the jeopardy

element's body of law. Examples include: whether the employee fulfills the jeopardy

element when his theory focuses on his individual rights rather than the good of the

community; whether there is another available adequate remedy when, to obtain the

remedy, the employee must file an administrative complaint within a short time period;

and whether the alternate remedy is adequate if the employee is not afforded a jury trial.

Suffice it to say that the law of wrongful discharge in violation of public policy may f advance by turning back time to before Gardner, when the employee only needed to I show his discharge implicated a clear mandate of public policy. At least, the law could

be more consistent if the jeopardy element faithfully followed the language in Gardner I ~

that the plaintiff need not show her private suit necessary to effective enforcement of the

identified public policy as long as her conduct directly related to the policy.

11 No. 31234~8~III Becker v. Cmty. Health Sys. Inc. (concurrence)

The tort of wrongful tennination in violation of public policy is independent of

any underlying contractual agreement or statute. Therefore, Washington courts have held

that an employee need not exhaust her contractual or administrative remedies to proceed

before suing in tort. Piel, 177 Wn.2d at 612; Christensen v. Grant County Hosp. Dist.

No.1, 152 Wn.2d 299,311, 96 P.3d 957 (2004); Smith, 139 Wn.2d at 808; Allstot v.

Edwards, 116 Wn. App. 424, 431,65 P.3d 696 (2003); Young v. Ferrellgas, L.P., 106

Wn. App. 524, 530,21 P.3d 334 (2001). For the same reason, other remedies that

address the violation of public policy should not interfere with establishing the jeopardy

element of the tort.

Jeopardy and the other three elements announced in Gardner come from a treatise

about the tort, HENRY H. PERRITT JR., WORKPLACE TORTS: RIGHTS AND LIABILITIES

(1991). Gardner, 128 Wn.2d at 945. The four critical Gardner sentences concerning

jeopardy also derive from the treatise. Although Gardner characterizes the Perritt treatise

as "leading," one might question this characterization. Although we recognize Henry J.

Perritt as an expert in employment law, Perritt fails to analyze the four sentences and the

problems they create. The treatise is more a collection of decisions than it is a reasoned

discussion of the tort of wrongful discharge.

Gardner lists Collins v. Rizkana, 73 Ohio St. 3d 65, 69~ 70, 652 N.E.2d 653

(1995), as the only decision to parrot Henry H. Perritt, Jr.'s, four elements of the tort of 12

wrongful discharge in violation of public policy and to have embraced the jeopardy

element. A review of decisions.across the United States suggests that only Iowa, Utah

. and Guam have since adopted Perritt's four elements of the tort. Fitzgerald v. Salsbury

Chem., Inc., 613 N.W.2d 275,282 n.2 (Iowa 2000); Ryan v. Dan's Food Stores, Inc., 972

P.2d 395, 404 (Utah 1998); Ramos v. Docomo Pacific, Inc., 2012 Guam 20,2012 WL

6738152.

82 AM. JUR. 20 Wrongful Discharge § 54 (2014) proclaims what may be the

majority rule in the United States:

To prevail, an employee asserting a discharge that undennines public policy must establish a number of key elements, including the following: (1) the existence of a clear public policy; (2) that he or she was engaged in conduct protected by public policy; (3) that the employer knew or believed that the employee was engaged in a protected activity; (4) that retaliation was a motivating factor in the dismissal decision; and (5) that the discharge would undennine an important public policy.

(footnotes omitted). Note that neither jeopardy nor the lack of another adequate remedy

is an element.

Interests and goals clash when detennining the breadth of the tort of wrongful

f { No. 3 I 234-8-III

discharge in violation of public policy. Society wishes employers to be free to discharge

poor performing employees and render management decisions that will not be challenged

unless strong public policies interfere. Society does not wish employees to win money

by ginning false reasons for termination from employment. Nor does society wish the

discharged employee to recover against the employer if the conduct that led to the

discharge advanced the employee's own interests, rather than the interests of others or

society as a whole. At the same time, society wishes to protect a giraffe, who heroically

sticks his or her neck out and does good no matter the cost. The employee's actions in

Gardner wonderfully illustrate such a heroic deed. If a heroic deed benefits the

community but leads to the giraffe's firing, society prefers the employer, not the

employee, pay for the loss suffered by the employee. Under such circumstances, the

employer has engaged in intentional misconduct and should pay for the loss caused by its

conduct.

A description of the tort of wrongful discharge that simply requires the employee

to prove a clear mandate of public policy and her conduct directly relates to the policy

serves these competing interests. The requirement of a clear manifestation of public

policy limits the suits to worthwhile suits. The requirement of causation also limits

recovery to firings that intentionally flaunt a clear public policy. Requiring the

discharged employee to prove more compounds, confounds, and contorts the tort.

Feari~~l~ I CONCUR:

r

I f.

15 , t ~

I \