[Cite as McGowan v. Medpace, Inc., 2015-Ohio-3743.]
IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO
MARY MCGOWAN, M.D., : APPEAL NOS. C-140634 C-140652 Plaintiff-Appellee/Cross- : TRIAL NO. A-1108336 Appellant, : O P I N I O N. vs. : MEDPACE, INC., : Defendant-Appellant/Cross- Appellee. :
Civil Appeals From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Reversed and Cause Remanded
Date of Judgment Entry on Appeal: September 16, 2015
Freking & Betz, LLC, Randolph Freking and Brian P. Gillan, for Plaintiff- Appellee/Cross-Appellant Mary McGowan, M.D.,
Thompson Hine LLP, Deborah S. Brenneman and George B. Musekamp, for Defendant-Appellant/Cross-Appellee Medpace, Inc.,
The Gittes Law Group, Frederick M. Gittes and Jeffrey P. Vardaro, for Amicus Curiae the Ohio Employment Lawyers Association.
Please note: this case has been removed from the accelerated calendar. OHIO FIRST DISTRICT COURT OF APPEALS
FISCHER, Judge.
{¶1} Defendant-appellant/cross-appellee Medpace, Inc., and plaintiff-
appellee/cross-appellant Mary McGowan, M.D., have appealed from the trial court’s
order entering final judgment in favor of McGowan on her claim against Medpace for
wrongful discharge in violation of public policy. Because McGowan failed to identify
a clear public policy in support of her wrongful-discharge claim, we hold that the trial
court erred by failing to grant a directed verdict to Medpace.
Background and Procedure
{¶2} Medpace is a research facility that designs and conducts clinical trials
to test new pharmaceuticals. In the spring of 2011, Medpace hired McGowan as an
at-will employee to take over duties from one of its retiring physicians, Dr. Evan
Stein. McGowan was hired as the executive director of both Medpace’s Clinical
Pharmacology Unit (“CPU”) and its Metabolic and Atherosclerosis Research Center
(“MARC”). The CPU conducted phase one studies to observe participants’ first
exposure to a drug. The MARC conducted later-stage studies on various drugs. The
sponsor of each drug study in the MARC selected a principal investigator to run the
study. McGowan was responsible for recruiting new studies to the MARC, and she
was additionally appointed by Stein to replace him as the principal investigator on
studies that he had previously recruited. McGowan had additionally agreed to take
over control of Stein’s private practice, the Cholesterol Treatment Center (“CTC”).
The CTC was not affiliated with Medpace and was solely owned by Stein, although it
was located on Medpace’s premises. Most participants in the MARC studies were
patients at the CTC, and the two entities shared employees.
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{¶3} Shortly after taking over the CTC, McGowan observed several practices
in the facility that troubled her. Stein had prescribed patients a larger dose of
medication than was medically necessary, and had then directed the patients to split
the prescribed pills. McGowan felt that this practice of pill splitting constituted
insurance fraud and compromised patient safety because the written prescription
provided to the pharmacy did not match the instructions in a patient’s chart.
McGowan was further troubled by Stein’s practice of combining into one chart the
medical records of CTC patients who were enrolled in a MARC study. In her opinion,
personal information necessary to the CTC chart was irrelevant to treatment in the
MARC and should not be contained in the MARC files. Last, McGowan was
concerned with the MARC’s practice of leaving patient charts open on carts outside
of treatment rooms. She felt that these two practices were in violation of the Health
Insurance Portability and Accountability Act (“HIPAA”).
{¶4} McGowan contacted a health-care attorney regarding her concerns
about Stein’s pill-splitting and prescription-writing practices. After receiving
confirmation from this attorney that her concerns were legitimate, McGowan called a
staff meeting on July 22, 2011. At this meeting, she instructed the staff that they had
to change the way that prescriptions were written and the way that charts were
handled. McGowan stated that Stein’s prescription-writing practices had been
fraudulent. After learning of this meeting and McGowan’s accusations, Stein
removed McGowan from all activity in both the MARC and CTC via an email sent on
July 25, 2011.
{¶5} On July 27, 2011, McGowan met with August Troendle, Medpace’s
president and CEO, and Tiffany Khodadad, Medpace’s executive director of human
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resources. During this meeting, McGowan raised her concerns about Stein’s
prescription-writing practices and the HIPAA violations that she felt she had
observed. Troendle told McGowan that it was inappropriate for her to have accused
Stein of fraud in front of the staff. He stated that her concerns would be investigated,
and he encouraged her to investigate them as well. According to Troendle, McGowan
was adamant that Stein had committed fraud and that she had the right to air her
concerns to whomever she wished. Troendle clarified to McGowan that she was still
the executive director of the MARC, but that he could not control whether Stein
retained control of the CTC or the studies at MARC that he had previously recruited.
Neither McGowan’s title nor salary changed after Stein took back control of the CTC
and his MARC studies.
{¶6} On July 28, 2011, McGowan sent an email to Khodadad, Troendle, and
Kay Nolan, Medpace’s general counsel. In the email, McGowan stated that she felt
she was being retaliated against for expressing her concerns about improper
practices at the CTC. She stated that Troendle had informed her that she would not
be restored to director of either the CTC or MARC until she apologized to Stein, and
that Troendle had referred to Stein as an “asshole” and an “egomaniac.” Troendle
responded to this email, denying that he had referred to Stein in such a manner and
clarifying that McGowan remained head of the CPU, but that he had no authority to
remove Stein as the principal investigator on Steins’ MARC studies.
{¶7} Following this meeting and email exchange, McGowan continued her
duties as director of the CPU. But she felt that she could be fired from Medpace at
any point, and she retained an attorney. On August 17, 2011, McGowan attended a
standard Medpace staff meeting. At Troendle’s request, she stayed after the meeting
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to speak with him. Troendle acknowledged that McGowan had hired an attorney to
negotiate her departure from Medpace, but expressed his desire for her to continue
her employment. McGowan told Troendle that she was disappointed that he had lied
about calling Stein an asshole. Troendle again told McGowan that it had been
inappropriate to accuse Stein of fraud in front of the staff. McGowan stated that
Troendle could not stop her from speaking the truth and she accused Troendle of
trying to intimidate her.
{¶8} After that meeting, Troendle determined that he had to terminate
McGowan’s employment with Medpace. On August 18, 2011, two representatives
from Medpace’s department of human resources informed McGowan that she had
been fired.
{¶9} On October 19, 2011, McGowan sued Medpace for wrongful discharge
in violation of public policy, sex discrimination, intentional infliction of emotional
distress, and promissory estoppel. The case proceeded to a jury trial. At the close of
McGowan’s case, Medpace moved for a directed verdict. As relevant to this appeal,
Medpace argued in its motion that McGowan’s claim for wrongful discharge in
violation of public policy failed as a matter of law, because she had failed to establish
the first two elements of that claim. The trial court denied Medpace’s request, both
when initially made and when it was renewed at the close of all evidence. The jury
found in favor of Medpace on McGowan’s claims for sex discrimination, intentional
infliction of emotional distress, and promissory estoppel. But it found in favor of
McGowan on her claim for wrongful discharge in violation of public policy. It
awarded her $300,000 in compensatory damages, $500,000 in punitive damages,
and attorney fees.
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{¶10} After the trial court entered final judgment on that claim in favor of
McGowan, Medpace filed a motion for judgment notwithstanding the verdict, and
alternatively for a new trial. McGowan also filed a similarly titled motion, arguing
that the jury had erred in its calculation of damages. The trial court denied both
motions.
{¶11} Medpace has appealed the trial court’s judgment. In three
assignments of error, Medpace argues that the trial court erred in failing to dismiss
McGowan’s claim for wrongful discharge in violation of public policy, by providing
the jury with improper and incomplete jury instructions, and by awarding McGowan
all requested attorney fees. McGowan has also appealed the trial court’s judgment.
In one assignment of error, she challenges the jury’s calculation of her damages.
Wrongful Discharge in Violation of Public Policy
{¶12} Medpace argues in its first assignment of error that the trial court’s
failure to dismiss McGowan’s claim for wrongful discharge in violation of public
policy was in error. Medpace contends that the trial court should have granted either
its motion for a directed verdict or motion for judgment notwithstanding the verdict
with respect to this claim.
{¶13} We review a trial court’s ruling on a motion for a directed verdict de
novo. See Bennett v. Admr., Ohio Bur. of Workers’ Comp., 134 Ohio St.3d 329,
2012-Ohio-5639, 982 N.E.2d 666, ¶ 14. A directed verdict should be granted when
the trial court “after construing the evidence most strongly in favor of the party
against whom the motion is directed, finds that upon any determinative issue
reasonable minds could come to but one conclusion * * * and that conclusion is
adverse to such party.” Civ.R. 50(A)(4).
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{¶14} Medpace had employed McGowan as an at-will employee. Under the
common law employment-at-will doctrine, the employment relationship between an
employer and an at-will employee may be terminated by either party for any reason,
and the termination of such an employee generally does not give rise to an action for
damages. See Collins v. Rizanka, 73 Ohio St.3d 65, 67, 652 N.E.2d 653 (1995); see
also Dohme v. Eurand America, Inc., 130 Ohio St.3d 168, 2011-Ohio-4609, 956
N.E.2d 825, ¶ 11.
{¶15} But in Greeley v. Miami Valley Maintenance Contrs., Inc., 49 Ohio
St.3d 228, 551 N.E.2d 981 (1990), the Ohio Supreme Court recognized an exception
to this employment-at-will doctrine. The Greeley court held that an at-will employee
may maintain a cause of action for wrongful discharge when the employee is
terminated in violation of a clearly expressed public policy. Greeley at 234. To
establish a claim for wrongful discharge in violation of public policy, an employee
must demonstrate that a clear public policy existed (the clarity element); that the
employee’s dismissal jeopardized the public policy (the jeopardy element); that the
employee’s dismissal was motivated by conduct related to the public policy (the
causation element); and that the employer did not have an overriding business
justification to support dismissal of the employee (the overriding justification
element). See Collins, at 69-70. The clarity and jeopardy elements present questions
of law, while the causation and overriding-justification elements present questions of
fact. Id.
{¶16} McGowan contended that she had been wrongfully discharged for
reporting her concerns about Stein’s prescription-writing practices, which she
alleged constituted insurance fraud and compromised patient safety. She argued
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that her firing on these grounds violated the public policy established in R.C.
2913.47, which prohibits insurance fraud. She further contended that she had been
wrongfully discharged in violation of the public policy established in HIPAA for
reporting her complaints about Stein’s practices of combining the charts of patients
in the MARC and CTC and of leaving patient charts open on carts.
{¶17} Medpace argues that the trial court should have dismissed McGowan’s
wrongful-discharge claim because she had failed to establish the clarity element with
respect to both of her public policy arguments. Medpace specifically contends that
neither R.C. 2913.47 nor HIPAA complied with the precedent established by this
court in Hale v. Volunteers of Am., 158 Ohio App.3d 415, 2004-Ohio-4508, 816
N.E.2d 259 (1st Dist.), and Dean v. Consol. Equities Realty #3, LLC, 182 Ohio
App.3d 725, 2009-Ohio-2480, 914 N.E.2d 1109 (1st Dist.).
{¶18} In Hale, we considered whether two former employees of a residential
treatment center for convicted felons could maintain an action against their former
employer for wrongful discharge in violation of public policy based on a public policy
that was independent of Ohio’s whistleblower statute. Hale at ¶ 40. The employees
had contended that they were wrongfully discharged for reporting their concerns
about the operation of the rehabilitation center in violation of the public policy
established by various regulations in the Ohio Administrative Code. Id. at ¶ 37. We
determined that in the context of that claim, an “independent source of public policy
must parallel the public policy set forth in the whistleblower statute.” Id. at ¶ 45.
Because the administrative code provisions relied on by the employees did not
affirmatively require them to report their concerns, and did not prohibit the
rehabilitation center from terminating employees for reporting their concerns, and
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because the employees had not alleged that they were terminated for reporting
workplace-safety violations, we held that they had failed to establish that their
employment was terminated in violation of a clear public policy independent of the
whistleblower statute. Id. at 46-47.
{¶19} In Dean, a former employee of Colerain Ford had alleged that he had
been wrongfully terminated in violation of public policy for reporting his concerns
that the dealership’s business practices constituted fraud. He argued that Ohio had a
clear public policy against fraud, evidenced in R.C. 2921.13. Dean at ¶ 10. In
rejecting Dean’s argument, we emphasized that the public-policy exception to the at-
will employment doctrine should be narrowly applied. Id. at ¶ 12. We held that
Dean had failed to establish an independent source of public policy to support the
clarity element of his claim, because the statute that he had relied upon failed to
impose an affirmative duty on an employee to report a violation, failed to prohibit an
employer from retaliating against an employee who had filed complaints, and did not
protect the public’s health or safety. Id. at ¶ 11-12.
{¶20} McGowan argues that the Ohio Supreme Court has never similarly
limited the type of public policy applicable to a wrongful-discharge-in-violation-of-
public-policy claim and has never held that such a claim must be based on a public
policy that either addresses the conduct of the employee or regulates the conduct of
the employer. She contends that a public policy is sufficient to satisfy the clarity
element when it is applicable to the employer and implicated in the employee’s
termination.
{¶21} Other appellate districts have adopted McGowan’s position. See
Alexander v. Cleveland Clinic Found., 8th Dist. Cuyahoga No. 95727, 2012-Ohio-
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1737, ¶ 36 (“We find, however, no requirement that a supporting statute be
employment-related or otherwise set forth an employer’s responsibilities and/or an
employee’s rights.”). But several federal courts have reached the same conclusion as
this district and have cited Hale and Dean with approval. In Crowley v. St. Rita’s
Med. Ctr., 931 F.Supp.2d 824 (N.D.Ohio 2013), the United States District Court for
the Northern District of Ohio held that
This Court finds more persuasive the reasoning of the Ohio courts that
require the public policy invoked in a Greeley claim to parallel the
policies underlying the whistleblower statute or protect employee or
public safety. The courts of Ohio generally have found that Greeley
claims cannot lie with every public policy, even ‘good’ ones, and
appropriately so. Without these limitations, Greeley claims could
evolve from exceptions to the employment at-will doctrine to the rule
itself.
Crowley at 831. See Gates v. Beau Townsend Ford, Inc., S.D.Ohio No. 3:08-cv-054,
2009 U.S. Dist. LEXIS 110005, * 27 (Nov. 24, 2009) (“[T]he clear public policy, if
separate from the whistleblower statute, must parallel the whistleblower statute or
be criminal in nature.”).
{¶22} A claim for wrongful discharge in violation of public policy was created
as an exception to the employment-at-will doctrine. As recognized by the Crowley
court, absent a narrow interpretation of the types of public policy applicable to these
claims, the exception becomes the rule. With the continued and ongoing explosion
in statutes, governmental regulations, and policies found under the Ohio Revised
Code and the Ohio Administrative Code, as well as federal laws and regulations, if
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exceptions to the at-will-employment doctrine are not narrowly construed, the so-
called “exceptions” will speedily and overwhelmingly undermine and eliminate the
concept of at-will employment in this state. The employment-at-will doctrine is, as
conceded by all parties herein, the starting point for an employment-law analysis for
this type of claim. This doctrine has remained untouched by the legislature since its
inception, and is effectively one of Ohio’s most basic “public policies” on employment
issues. If this court were to disregard now longstanding case law like Hale and Dean,
this most important public policy would be destroyed. Such a change in basic Ohio
public policy should be left to the legislature, not this court.
{¶23} Hale and Dean are the law of this district and we continue to adhere to
them. In a claim for wrongful discharge in violation of public policy, an employee
satisfies the clarity element by establishing that a clear public policy existed, and that
the public policy was one that imposed an affirmative duty on an employee to report
a violation, that prohibited an employer from retaliating against an employee who
had reported a violation, or that protected the public’s health and safety.
{¶24} We now consider whether the public policies relied on by McGowan
meet these criteria. McGowan argued that she had been terminated for reporting her
concerns about Stein’s prescription-writing practices, namely pill splitting, in
violation of the public policy established in R.C. 2913.47. This insurance-fraud
statute provides in relevant part that
No person, with purpose to defraud or knowing that the person is
facilitating a fraud, shall do either of the following:
(1) Present to, or cause to be presented to, an insurer any written or
oral statement that is part of, or in support of, an application for
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insurance, a claim for payment pursuant to a policy, or a claim for any
other benefit pursuant to a policy, knowing that the statement, or any
part of the statement, is false or deceptive;
(2) Assist, aid, abet, solicit, procure, or conspire with another to
prepare or make any written or oral statement that is intended to be
presented to an insurer as part of, or in support of, an application for
insurance, a claim for payment pursuant to a policy, or a claim for any
other benefit pursuant to a policy, knowing that the statement, or any
part of the statement, is false or deceptive.
R.C. 2913.47(B).
{¶25} While this statute arguably establishes a valid public policy against
insurance fraud, it cannot serve as the basis for an exception to the employment-at-
will doctrine. See Dean, 182 Ohio App.3d 725, 2009-Ohio-2480, 914 N.E.2d 1109, at
¶ 12. This statute does not place an affirmative duty on an employee to report a
violation, prohibit an employer from retaliating against an employee who has
reported a violation, or protect the public’s health and safety. Consequently, it will
not support McGowan’s wrongful-discharge claim.
{¶26} We reach the same conclusion with respect to McGowan’s argument
that her termination was in violation of the public policy established in HIPAA. In
Wallace v. Mantych Metal-Working, 189 Ohio App.3d 25, 2010-Ohio-3765, 937
N.E.2d 177 (2d Dist.), the Second Appellate District recognized HIPAA as a valid
source of public policy in a wrongful-discharge case. It held that HIPAA manifested
a public policy favoring the confidentiality and privacy of medical records. Wallace
at ¶ 41. As recognized by the Second District and explained by McGowan in both her
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appellate brief and at oral argument, HIPAA was enacted to help protect patient-
privacy rights. HIPAA manifests an important and useful public policy, but the
protection of patient privacy is not the type of public policy contemplated by Hale
and Dean.
{¶27} Because McGowan failed to establish that she was discharged in
violation of a clear public policy that imposed an affirmative duty on an employee to
report a violation, that prohibited an employer from retaliating against an employee
who had reported a violation, or that protected the public’s health and safety, she has
failed to satisfy the clarity element of her wrongful-discharge claim. Consequently,
reasonable minds could only reach one conclusion on the evidence submitted—that
McGowan could not succeed on her claim for wrongful discharge in violation of
public policy. We hold that the trial court erred by failing to grant Medpace a
directed verdict on this claim.
{¶28} Medpace’s first assignment of error is sustained. Our resolution of this
assignment of error renders Medpace’s remaining assignments of error and the
assignment of error raised in McGowan’s cross-appeal moot.
Conclusion
{¶29} The trial court erred by failing to grant a directed verdict to Medpace
on McGowan’s claim for wrongful discharge in violation of public policy. We reverse
the trial court’s judgment in favor of McGowan, and remand this cause with
instructions for the trial court to enter judgment in favor of Medpace on this claim.
Judgment reversed and cause remanded.
DEWINE, J., concurs. HENDON, P.J., dissents.
13 OHIO FIRST DISTRICT COURT OF APPEALS
HENDON, P.J., dissenting.
{¶30} I agree with the majority’s determination that Hale and Dean are the
law of this court, and that a public policy will not satisfy the clarity element of a claim
for wrongful discharge in violation of public policy unless it comports with one of the
requirements outlined in these cases. But I believe that McGowan has sufficiently
established that she was discharged in violation of a public policy that met one of
these requirements: HIPAA.
{¶31} The majority recognizes that HIPAA manifests a public policy in favor
of protecting patient-privacy rights. The disclosure of a patient’s confidential
medical information can have a far-reaching effect, and, and in my opinion, patient-
privacy rights directly implicate the public’s health and safety. For this reason, I
would conclude that McGowan satisfied the clarity element of her claim for wrongful
discharge in violation of public policy and that the trial court did not err in failing to
grant a directed verdict in favor of Medpace on her claim.
Please note: The court has recorded its own entry on the date of the release of this opinion.