Lihosit v. I & W, INC.

913 P.2d 262, 121 N.M. 455

• Court: New Mexico Court of Appeals
• Decided: January 17, 1996
• Docket: 16285
• Status: Published

Opinions

OPINION

BLACK, Judge.

David F. Lihosit (Lihosit) was employed as a truck driver by I & W, Inc. (I & W). In his complaint, Lihosit alleged I & W violated clear public policy by terminating him because he refused to return to work late at night to drive a truck in violation of state driving and hours-of-service regulations. I & W argued it did not have knowledge of this explanation for Lihosit’s failure to return to work and, therefore, could not have discharged him in retaliation for his involvement in a protected activity.

The case comes to this Court on Lihosit’s appeal of a summary judgment based on stipulated and undisputed facts. We affirm.

I. FACTS

Lihosit’s job with I & W was to drive a large tractor trailer transporting water, oil, and chemicals to oil rigs. These materials were to be delivered to the job site at any time it was necessary. After leaving work at 8:35 p.m. on May 13, 1991, Lihosit received a telephone call at home around 10:30 p.m. The call was from Artesia Answering Service, an independent business with which I & W contracted to relay messages to I & W employees. Ralph Lewis of Artesia Answering Service relayed a message to Lihosit to return to work within the hour because an I & W customer had lost circulation in an oil well and needed water. Reading the facts most favorably to the plaintiff, Lihosit told Lewis he was too tired to work and would be in the next morning at 7:00. Lihosit said Lewis twice replied, “This may be your job.” Lihosit then told Lewis that any additional work on Lihosit’s part would violate “hours-in-service” regulations.

While there is a dispute over what Lihosit told Lewis, there is no dispute that Lewis did not tell anyone associated with I & W that Lihosit declined to return to work because he was too fatigued and/or because it would violate any legal regulation. Lewis did tell Larry Richardson, Lihosit’s supervisor at I & W, that after Lihosit was told to come back to work, Lihosit replied, “I work days. I will be there at 7:00 in the morning.” Richardson was not informed of Lihosit’s contention that further service on May 13 would have violated state law until Lihosit’s unemployment compensation hearing on September 10,1991.

The trial court set forth the following stipulated and undisputed facts in its order granting summary judgment:

A. David Lihosit’s employment with I & W Inc. was terminated by Larry Richardson on May 14, 1991 as a result of Plaintiffs refusal to return to work in his capacity of a transport operator to assist in restoring drilling circulation to an I & W Inc. customer’s well.

B. David Lihosit did not tell any employee of I & W Inc. on May 14, 1991, and, in particular Larry Richardson, the I & W Inc. employee who terminated David Lihosit’s employment, the reason he alleges in his Complaint for his refusal to return to work, which refusal formed the sole basis for David Lihosit’s termination.

C. No employee of I & W Inc., and in particular Larry Richardson, had actual knowledge on May 14, 1991 that David Lihosit had refused to return to work because he claimed that the return to work would have violated the hours of service regulations of the State as set out in N.M.S.A.1978 Sec. 65-3-11 (Repl. Pamp.1990) and Motor Carrier ■ Safety (MCS) regulations 11:395, et seq., as alleged in the Complaint.

On May 14, 1991, I & W fired Lihosit for failing to return to work the previous night. On June 12, 1992, Lihosit sued I & W for retaliatory discharge, claiming he was fired because he refused to exceed the maximum number of driving hours allowed under New Mexico law. The district court granted summary judgment against Lihosit because the court found that I & W did not have knowledge of Lihosit’s alleged reasons for failing to report to work and, therefore, the termination was not in retaliation for engaging in a protected activity.

II. RETALIATORY DISCHARGE REQUIRES A CAUSAL CONNECTION BETWEEN PROTECTED CONDUCT AND WRONGFUL TERMINATION

In the absence of a contract between an employer and employee, New Mexico presumes employment is terminable “at-will.” Hartbarger v. Frank Paxton Co., 115 N.M. 665, 668, 857 P.2d 776, 779 (1993), cert. denied, 510 U.S. 1118, 114 S.Ct. 1068, 127 L.Ed.2d 387 (1994). “An at-will employment relationship can be terminated by either party at any time for any reason or no reason, without liability.” Id. New Mexico courts have, however, recognized an exception to this general rule when an employee is discharged in retaliation for engaging in an act favored by public policy. See Paca v. K-Mart Corp., 108 N.M. 479, 481, 775 P.2d 245, 247 (1989). “Consequently, an at-will employee may recover in tort when his discharge contravenes a clear mandate of public policy.” Gutierrez v. Sundancer Indian Jewelry, Inc., 117 N.M. 41, 47, 868 P.2d 1266, 1272 (Ct.App.1993), cert. denied, 117 N.M. 121, 869 P.2d 820 (1994). Following generally recognized tort principles, an employee seeking to recover for retaliatory discharge must show a causal connection between his protected actions and his discharge. Shovelin v. Central N.M. Elec. Coop., 115 N.M. 293, 303, 850 P.2d 996, 1006 (1993).

Our Supreme Court considered the causation requirement in Chavez v. Manville Products Corp., 108 N.M. 643, 777 P.2d 371 (1989). In that case, Chavez was a longtime Manville employee who expressly refused to allow his name to be used in a corporate lobbying effort. The corporation nonetheless affixed Chavez’s name to a mailgram addressed to a United States Senator which stated the undersigned employees, including Chavez, urged support of legislation favored by the corporation. When Chavez found out about the unauthorized use of his name, he angrily demanded an explanation. The following month, Chavez was notified by his overall supervisor, Loretta Turner, that he was being laid off for a month. Subsequently, Chavez was notified his job had been eliminated. Chavez was informed that only two foremen were now required and he was the worst of the three foremen currently employed.

The New Mexico Supreme Court reversed a directed verdict in Manville’s favor and held that these facts presented a jury question as to whether Chavez’s refusal to lobby Congress in support of his employer’s position was the basis for a retaliatory discharge claim. Id. at 647-48, 777 P.2d at 375-76. The Supreme Court found it unnecessary to adopt a standard that would shift the burden to the employer once the employee introduced “evidence of circumstances that justify an inference of retaliatory motive, such as protected conduct closely followed by adverse action.” Id. at 648 n. 2, 777 P.2d at 376 n. 2. Rather, the Court recited in detail the extensive evidence which created a jury question on whether the discharge was in retaliation for Chavez engaging in a protected activity:

When we consider as true the following evidence presented by Chavez: that on April 4, the day after his refusal to participate in Manville’s lobbying effort, Loretta Turner, said to be informed of the refusal, placed an unwarranted critical memo in Chavez’ file concerning his unsafe use of certain equipment; that on the same day his immediate supervisor advised him that he had better be careful because “Loretta is after you”; that when Chavez requested an explanation from his immediate supervisor for the unauthorized use of his name in the lobbying effort, Manville, shortly thereafter, made a decision to terminate him; that after being “laid off’ for a month he was advised that his job had been eliminated; that after his termination the number of production crews remained unchanged at two, and Chavez’ supervisory position was taken by another employee who had for over five years been assigned to other duties; that Manville made no efforts to place Chavez, an employee of 20 years, in any other position, despite a company policy to the contrary, and instead listed him as being ineligible for future employment with Manville in any capacity, it was well within the province of the fact finder to reach an abiding conviction that the discharge was in response to his noncooperation with Manville’s legislative agenda.

Id. at 648-49, 777 P.2d at 376-77.

We have no such facts in the case before us. There was no dispute in Chavez that the employee made it known to his supervisors well before the termination that he refused to support the employer’s political activity. Here, however, it is stipulated that no such message was conveyed to anyone at I & W at any time before Lihosit was fired. Rather, on the record before us, the trial court found:

5. There is no dispute that the employer, I & W, Inc. and, in particular Larry Richardson, the employee who terminated the Plaintiff, did not have actual knowledge at the time he terminated the Plaintiff that the Plaintiff refused to return to work because his return to work would violate the hours of service regulations of the state, which refusal formed the sole basis for the Plaintiffs termination.

The Supreme Court in Chavez found sufficient evidence to create a jury question as to whether the employee was fired because of his protest over unauthorized political activity. Chavez did, however, recognize that retaliatory discharge is an intentional tort. Id. at 649, 777 P.2d at 377. Unlike Chavez, the issue here is whether I & W could have intentionally retaliated when it was unaware of Lihosit’s position that he was engaging in a legally protected activity.

It is widely recognized that the employer’s motive is a key element of retaliatory discharge. Reich v. Hoy Shoe, Co., 32 F.3d 361, 367-68 (8th Cir.1994); Ortega v. IBP, Inc., 255 Kan. 513, 874 P.2d 1188, 1194 (1994); Lueck v. United Parcel Serv., 258 Mont. 2, 851 P.2d 1041, 1044-5 (1993); Texas Division-Tranter, Inc. v. Carrozza, 876 S.W.2d 312, 313 (Tex.1994). “Obviously, an employer cannot fire an employee in retaliation for actions of which the employer is unaware.” Elletta Sangrey Callahan, The Public Policy Exception to the Employment at Will Rule Comes of Age: A Proposed Framework for Analysis, 29 Am.Bus.L.J. 481, 498 (1991); cf. White v. American Airlines, Inc., 915 F.2d 1414, 1422 (10th Cir. 1990) (The trial court instructed the jury that “an essential element of plaintiffs wrongful discharge claim was that ‘plaintiff refused to commit perjury and defendant knew of such refusal.’ ”). Therefore, an employee fails to prove the causal connection necessary to sustain a claim for retaliatory discharge when there is no evidence that the persons responsible for his discharge had any knowledge the employee engaged in an activity alleged to be protected. Parham v. Carrier Corp., 9 F.3d 383, 387 (5th Cir.1993); Talley v. United States Postal Serv., 720 F.2d 505, 508 (8th Cir.1983), cert. denied, 466 U.S. 952, 104 S.Ct. 2155, 80 L.Ed.2d 541 (1984); Carter v. Bennett, 651 F.Supp. 1299, 1301 (D.D.C.1987) (mem.), aff'd, 840 F.2d 63 (D.C.Cir.1988); Beckman v. Freeman United Coal Mining Co., 123 Ill.2d 281, 122 Ill.Dec. 805, 808, 527 N.E.2d 303, 306 (1988); see also Hickman v. May Dep’t Stores Co., 887 S.W.2d 628, 631 (Mo.Ct.App.1994).

While it is not at all clear Lihosit’s return to work on the evening of May 13 would have been a violation of any legal requirement, it is clear I & W was not given the opportunity to consider his contention, much less retaliate based on this assertion. The termination, therefore, cannot have been in “retaliation” for anything other than insubordination, clearly an appropriate ground in a termination-at-will situation, where no reason at all is legally required. Once I & W brought forth evidence Lihosit was terminated for insubordination, it became Lihosit’s burden to show a question of material fact as to a wrongful purpose for the termination. Dow v. Chilili Coop. Ass’n, 105 N.M. 52, 55, 728 P.2d 462, 465 (1986) (once proponent brings forth evidence, the party opposing a summary judgment may not simply argue that facts may exist which would secure a trial on the merits). Discharging an at-will employee is not in itself a violation of public policy. What is a violation of public policy is discharging an employee with the intent to subvert a clear mandate of public policy.

Lihosit argues that the explanation of protected activity he alleges he provided to Artesia Answering Service should be attributed to I & W, but he provides no direct legal authority in support of this theory. See Wilburn v. Stewart, 110 N.M. 268, 272, 794 P.2d 1197, 1201 (1990) (issues not supported by legal authority will not be reviewed). The courts which have considered such an argument, however, have rejected the contention and applied the same logic which underlies the actual knowledge requirement. As the Fifth Circuit reasoned in Corley v. Jackson Police Department, 639 F.2d 1296, 1300 n. 6 (5th Cir.1981), “The key to a retaliation case ... is actual motive; constructive notice cannot create actual intent to retaliate.” See also Michael D. Wulfsohn, Comment, Martin Marietta v. Lorenz: Palpable Public Policy and the Superfluous Sixth Element, 70 Denv.U.L.Rev. 589, 610 (1993) (“Retaliation simply cannot ‘exist’ in the absence of a reason to retaliate.”).

The court refused to attribute the knowledge of certain employees not involved in the termination to the employer in Featherson v. Montgomery County Public Schools, 739 F.Supp. 1021 (D.Md.1990) (mem.). The plaintiff, Featherson, brought suit alleging, inter alia, she had been denied promotion in retaliation for previous claims she had filed against the Montgomery County Public Schools (MCPS) under the Equal Employment Opportunity (EEO) Act. The United States District Court granted the school district a summary judgment saying:

There is absolutely no evidence that the persons involved in any of the alleged adverse decisions affecting Featherson, i.e. her non-admission to the Assessment Centers and her non-appointment to acting assistant principal positions, knew at the time that the decisions were made that plaintiff had filed any EEO claims. Plaintiff argues that the knowledge of other representatives of MCPS should be imputed to the persons who made the decisions in question. This is nonsense. As a matter of logic and of fact, a person cannot make an adverse, retaliatory decision based upon information of which s/he is unaware. See Ross [v. Communications Satellite Corp.], 759 F.2d [355] at 365 n. 9 (“if the employer did not know of the protected activity a causal connection to the adverse action cannot be established”).

Id. at 1025-26.

The dissent expends substantial effort distinguishing the retaliatory discharge cases from other jurisdictions largely based on the contention that “New Mexico emphasizes the policy goals of the tort, not the ill-motives or bad faith of the employer.” (Dis. op. at 269.) While the dissent cites no legal support for this premise it relies on Shovelin v. Central N.M. Elec. Coop., Inc., 115 N.M. 293, 850 P.2d 996 (1993), to define the “linchpin” of the tort of retaliatory discharge. In Shovelin, however, our Supreme Court did not indicate there was anything unique or unusual about New Mexico’s recognition of this tort. Rather, our Court cited and relied upon myriad cases from other jurisdictions in deciding whether Mr. Shovelin stated a cause of action for retaliatory discharge.

Nor does the dissent cite any direct authority for its contention that whatever information Lihosit might have conveyed to Artesia Answering Service must be attributed to I & W to provide the basis for the motive for the tort. For example the dissent’s reliance on Kirmbro v. Atlantic Richfield Co., 889 F.2d 869 (9th Cir.1989), cert. denied, 498 U.S. 814, 111 S.Ct. 53, 112 L.Ed.2d 28 (1990), is completely misplaced. The appellate court in Kirnbro affirmed the district court’s dismissal of plaintiffs retaliatory discharge claim. We believe the dissent’s reliance on the general proposition that the knowledge of an agent may be imputed to the principal where such knowledge is relevant to matters entrusted to the agent, is misplaced. The recognized exceptions to this proposition are crucial to the decision in this case. The first exception provides, “If the state of mind of a principal in a transaction is a factor, a notification by a third person giving information to an agent who does not communicate it to the principal does not operate with like effect as a similar notification given to the principal.” Restatement (Second) of Agency § 268 cmt. d (1957). Moreover, if “the motive and knowledge with which an act is done is a factor in the existence of a cause of action, [ijnformation given to an agent for the purpose of notice does not, of itself, give information to the principal.” Id. As the previous discussion indicates, the intentional tort of retaliatory discharge requires knowledge of the favored activity by the employer at the time of the discharge. Thus, the central element of retaliatory discharge is whether the employer’s motive for discharging the employee was the employee’s engagement in protected activity. Without knowledge of the employee’s protected activity by the principal, the principal cannot have the required motive. The uncommunieated knowledge of an agent, therefore, is insufficient to establish the employer’s liability for retaliatory discharge.

The Restatement (Second) of Agency also provides that it is not sufficient that a party has a means of information in situations where, to be held responsible, the act must be done with knowledge. Id. § 275 cmt. b. When knowledge is required for purposes of tort liability, the central issue is the knowledge of the actual tortfeasor, which knowledge cannot be imputed from an agent. See Woodmont, Inc. v. Daniels, 274 F.2d 132, 137 (10th Cir.1959), cert. denied, 362 U.S. 968, 80 S.Ct. 955, 4 L.Ed.2d 900 (1960); Warren A. Seavey, Handbook of the Law of Agency § 98, at 181 (1964) (“If personal knowledge is required for liability, the knowledge of an agent is not imputed to the principal.”); cf. Sisk v. McPartland, 267 Or. 116, 515 P.2d 179, 181 (1973) (discovery sanction).

Since Lihosit does not claim anyone at I & W had any knowledge of his contention that further driving on May 13, 1991, would violate state law, his claim for retaliatory discharge must fail. The summary judgment entered by the district court is affirmed.

IT IS SO ORDERED.

HARTZ, J., concurs. BUSTAMANTE, J., dissents.