Justia.com Opinion Summary: Appellant Charles Wilson worked at the Central City Water Works Department. During his tenure there, Wilson reported several safety issues to the Occupational Safety and Health Administration and Kentucky Division of Water. The mayor later terminated Wilson for personal use of his computer at the water plant and "neglect of duties, mismanagement of the water plant, and abuse of authority." The city council affirmed the mayor's decision. Wilson brought a civil action arguing that he was not a terminable "at-will" employee and that he was terminated in retaliation for notifying authorities of the Central City's violation of safety rules and regulations. The trial court granted summary judgment for Central City. The court of appeals affirmed, finding that Wilson was an at-will employee and not protected by the Whistleblower Act. The Supreme Court affirmed, holding that cities are not "employers" under the Whistleblower Act, and city employees are therefore not protected by the Act.
Receive FREE Daily Opinion Summaries by Email Download as PDF
Loading PDF...
<![CDATA[
RENDERED: APRIL 26, 2012
TO BE PUBLISHED
$uprrntr Court of
rttfurkv
2010-SC-000394-DG
CHARLES L. WILSON, JR.
V.
APPELLANT
ON REVIEW FROM COURT OF APPEALS
CASE NO. 2008-CA-001547-MR
MUHLENBERG CIRCUIT COURT NO. 03-CI-00469
CITY OF CENTRAL CITY, KENTUCKY
APPELLEE
OPINION OF THE COURT BY JUSTICE SCOTT
AFFIRMING
This case presents the question of whether Kentucky's Whistleblower Act
protects city employees. The Muhlenberg Circuit Court granted summary
judgment for the City of Central City, Kentucky ("Central City"), although that
court did not address the issue before us. The Court of Appeals affirmed,
concluding that cities are not "employers" under the Whistleblower Act, and
therefore are not subject to it. We granted discretionary review and, because
we agree that cities are not "employers" under the Whistleblower Act, we affirm.
I. BACKGROUND
The Central City Water Works Department hired Appellant, Charles L.
Wilson, Jr. ("Wilson"), in April 1982. Three years later, Wilson was promoted to
Chief Operator of the Water Treatment Plant. During his tenure at the Water
Works Department, Wilson became concerned with several safety issues, which
he promptly reported to the appropriate regulatory agencies. These concerns
led to multiple written reprimands in the late 1990s by the Kentucky Division
of Water against the Water Works Department.
While some of the safety issues were resolved, others persisted, which led
Wilson to contact a member of the Central City Water Board and a member of
the Central City Council. Wilson later contacted the Occupational Safety and
Health Administration to report safety concerns. In 2002, Wilson again
reported safety concerns to several employees of the Kentucky Division of
Water. One of the employees asked to speak with Wilson's supervisor, Jim
Brown, but Brown refused to do so, although Wilson suggested to Brown that
he work with the Division of Water to remedy the problems.'
Later, in June 2003, amid Wilson's ongoing divorce, allegations were
made that he had excessively used his city computer for personal reasons,
neglected his work duties, mismanaged the water plant, and abused his
authority. Wilson admits that he used his city computer for personal emails, to
research custody-related issues, and to access online dating websites. At least
one co-worker witnessed Wilson frequently using the computer for personal
reasons, as well as using several reams of paper to print divorce-related
information. These allegations made their way to Central City Mayor Hugh
Sweatt, who asked Jim Brown to investigate. The allegations were confirmed
and Sweatt fired Wilson on June 30, 2003. Wilson's termination letter
indicates that he was terminated for: (1) "Gross unauthorized use of a City
1
Wilson also reported several concerns shortly after he was initially suspended
in June 2003.
2
computer located at the water plant"; and (2) "Neglect of duties,
mismanagement of the water plant, and abuse of authority."
Wilson appealed his termination to the City Council, which conducted a
hearing and affirmed the mayor's decision. Wilson then brought a civil action
in the Muhlenberg Circuit Court arguing that he was not a terminable "at-will"
employee, and that he was terminated in retaliation for notifying authorities
that the Central City Water Works Department was operated in violation of the
employee safety and public water supply safety rules and regulations. The trial
court granted summary judgment in favor of Central City, finding that Wilson
was an "at-will" employee, and thus terminable at anytime, with or without
cause. It also found that Wilson had not reported a violation of a state statute
or administrative regulation as required by the Whistleblower Act ("the Act"),
and that any reports he had made were too temporally attenuated to be a
"contributing factor" to his termination under the statute. 2 Wilson appealed.
The Court of Appeals affirmed, agreeing that Wilson was an at-will
employee. 3 It also found that Wilson was not protected by the Whistleblower
Act, albeit for a different reason than did the trial court. Specifically, it held
that Central City, as a municipality, was not a "political subdivision" of the
Commonwealth, and therefore could not be an "employer" under the statute.
2 Specifically, the trial court found that the reports Wilson made came either
after he had been suspended pending his investigation or more than a year prior to
the suspension. The court concluded that these reports could not be found to be a
contributing factor in his termination as a matter of law.
3
This finding has not been appealed to this Court,.
3
Thus, the court concluded that Wilson was not protected by the Act. 4 Wilson
petitioned for rehearing in the Court of Appeals, but was denied. We then
granted discretionary review.
II. ANALYSIS
Wilson argues that Kentucky's Whistleblower Act, codified at KRS 61.101
et seq., applies to cities as employers. The Act states:
No employer shall subject to reprisal . . . any employee who in good
faith reports, discloses, [or] divulges . . . any facts or information
relative to an actual or suspected violation of any law, statute,
executive order, administrative regulation, mandate, rule, or
ordinance of the United States, the Commonwealth of Kentucky, or
any of its political subdivisions, or any facts or information relative
to actual or suspected mismanagement, waste, fraud, abuse of
authority, or a substantial and specific danger to public health or
safety.
KRS 61.102(1). Under the Act, "[e]mployer means the Commonwealth of
Kentucky or any of its political subdivisions." KRS 61.101(2). Wilson contends
that cities are "political subdivisions" of the Commonwealth. As such, he
argues, he was an employee of a political subdivision, and therefore protected
by the Whistleblower Act. See KRS 61.101(1) (defining "employee" as "a person
in the service of the Commonwealth of Kentucky, or any of its political
4 In dicta, the Court of Appeals went on to address the trial court's holding that
Wilson's complaints were too temporally attenuated to be a contributing factor in his
termination as a matter of law. First, the Court of Appeals agreed "that no reasonable
person could conclude that activities that occurred after Wilson's suspension could •
have contributed to that suspension." On the other hand, the Court of Appeals found
the trial court's conclusion as to disclosures made more than a year prior to Wilson's
suspension erroneous, noting that KRS 61.103(1)(b) entitles an employee to the
presumption that a disclosure was a contributing factor. Thus, an employee should
not be foreclosed from proving that a disclosure was a contributing factor due to the
absence of "temporal juxtaposition,"
4
subdivisions . . ."). Thus, we must determine whether a city is a "political
subdivision" of the Commonwealth for purposes of the Act.
We pause first to address terminology. For decades, (if not longer), this
Court's opinions have muddied the waters with respect to any distinction
between a "city," a "municipality," and a "municipal corporation." This lineblurring should not come as a surprise, considering the nature of the three
terms. For example, a city is lain incorporated [] municipality with definite
boundaries and legal powers set forth in a charter granted by the state."
Webster's II New College Dictionary 210 (3d ed. 2005). On the other hand, a
municipality is not necessarily a city, but may be; it is "[a] political unit, as a
city, town, or village, incorporated for local self-government [purposes]."
Id. at
738. To be sure, both "cities" and "municipalities" are municipal corporations.
See 62 C.J.S. Municipal Corporations § 2 (1999). And a city is both a
"municipality" and a "municipal corporation." Id. at § 2(b). However,
"municipality" can be a synonym for "municipal corporation" or "city," see id. at
§ 2(b) 8s (d), even though municipal corporations can be much larger than a
city (or, indeed, much smaller). 5
What the above discussion serves to emphasize is that the line between a
city, a municipality, and a municipal corporation is not always clear. The
Court of Appeals in this case used the word "municipality" when referring to
5 To show just how complicated this discussion can become, Corpus Juris
Secundum allocates four (4) entire volumes to "municipal corporations." Furthermore,
over forty (40) pages of the Kentucky's Revised Statutes General Index are dedicated to
provisions relating to "municipal corporations," and Kentucky Digest 2d dedicates over
1,000 pages to "municipal corporation" case descriptions.
5
Central City. Appellant's brief uses the words "municipality" and "municipal
corporation" interchangeably, as does Appellee's brief. Nonetheless, Appellee is
a city, and thus our analysis must be strictly limited, as much as possible, to
whether cities are "political subdivisions" under the Whistleblower Act.
Unfortunately, the KRS is riddled with provisions that use the terms
"city," "municipality," and "municipal corporation," often with no discernible
distinction. 6 This distinction, however, is becoming much more important as
the Kentucky General Assembly, in its quest to provide efficient protections
and services, creates geographic districts for the delivery of those protections
and services. Water treatment, fire fighting, public transportation, public
education, police, corrections, and tax collection are all examples of services
that are provided by a non-city municipal corporation in some areas, but
provided by a city in other areas. The legal status of the entities providing the
services depends on the distinction between "municipal corporation" and "city."
This is because, although a city is a municipality and a municipal corporation,
a service or protection district (which may be larger than a city) is a municipal
corporation, but not a "municipality." Thus, we will refer to non-city municipal
corporations as "municipal corporations," and cities as "cities" or
"municipalities." 7 With these points in mind, we turn to the specifics of the
case before us.
6 Indeed, under both "CITIES" and "MUNICIPALITIES" in the index to
Kentucky's Revised Statutes, it states only: "See MUNICIPAL CORPORATIONS."
7 We note, however, that some of the sources from whiCh we quote did not make
this distinction.
6
We begin, as we must, with the plain language of the statute.
See, e.g.,
Brownlee v. Commonwealth, 287 S.W.3d 661, 664 (Ky. 2009). "Where the
words of the statute are clear and unambiguous and express the legislative
intent, there is no room for construction or interpretation and the statute must
be given its effect as written." Lincoln Cnty. Fiscal Court v. Dep't of Pub.
Advocacy, 794 S.W.2d 162, 163 (Ky. 1990) (citation omitted). On its face, the
Whistleblower Act applies only to "the Commonwealth of Kentucky or any of its
political subdivisions," and persons "authorized to act on behalf of the
Commonwealth, or any of its political subdivisions, with respect to formulation
of policy or the supervision, in a managerial capacity, of subordinate
employees." KRS 61.101(2). Although "political subdivisions" is not defined,
the Act makes no reference to "cities," "municipalities," or "municipal
corporations." We start with the assumption that had the legislature intended
the Whistleblower Act to apply broadly to municipalities, it would have
explicitly included them in their definition of "employer."
This assumption is supported by numerous Kentucky laws in which the
General Assembly has designated municipalities as separate from either the
Commonwealth or its political subdivisions. See Ky. Const. § 177; KRS
18A.160(2); KRS 56.460; KRS 58.150(8); KRS 58.410; KRS 61.900(7); KRS
76.269; KRS 187.610; KRS 224.60-115(14); KRS 235.410(3); KRS 318.010(9);
and KRS 341.055(4). 8 Thus, we should not read the word "municipality" into a
It appears that, in each of these instances, the General Assembly is using the
tern' "municipality" to refer broadly to all "municipal corporations," including cities.
8
7
statute when the General Assembly has shown a clear ability to include it if it
desires to.
On the other hand, there are several provisions in the KRS that include
"cities" in a list of "political subdivisions." See KRS 39D.020(1); KRS 45.570(1).
In light of the legislature's various conjunctive and disjunctive uses of the
terms "municipalities" and/or "cities" with "political subdivision," we must look
deeper to discern the legislative intent behind the Whistleblower Act.
The legislative history of the Act indicates a deliberate intention by the
General Assembly to exclude cities from its prohibitions. The statute was
originally enacted in 1986 and last amended in 1993. Prior to the 1993
amendment, the Task Force on Governmental Ethics ("TFGE") was created to,
among other things, determine whether a comprehensive local government
code of ethics should be established to apply to a wide range of public officials,
including all elected city officials and many appointed city officials. Ultimately,
the TFGE approved Bill Request 108 ("BR 108"), which proposed to create a
new section under Chapter 61 of the Kentucky Revised Statutes, KRS Chapter
61A, establishing a code of ethics, including whistleblower provisions applicable
to cities in the Commonwealth. 9 KRS Chapter 61A would have instituted
sweeping reform and placed strict guidelines and requirements on city officials
and lobbyists.
9
The whistleblower provision in BR 108 was taken almost verbatim from KRS
61.102.
8
BR 108 was eventually replaced by Senate Bill 335 ("SB 335") which was
substantively similar to its predecessor. SB 335 would have created the
Kentucky Local Government Ethics Commission (LGEC) to oversee local
government officers, including city officers. The bill, if passed, would have
provided whistleblower protections to at least a city employee who reported
violations to the LGEC. However, the bill was never heard in committee.
Instead, that same session, the General Assembly heard and adopted House
Bill 238 ("HB 238"). HB 238 was eventually signed into law, creating a new
section of Chapter 65 of the Kentucky Revised Statutes, requiring "[t]he
governing body of each city . . . [to] adopt, by ordinance, a code of ethics which
shall apply to all elected officials . . . ." KRS 65.003.
Thus, the General Assembly had before it, in the same session, the option
of adopting a comprehensive ethics code applicable to cities, which included
whistleblower protections as afforded under KRS 61101 et seq., or adopting a
mandate requiring cities to regulate themselves without reference to the
Whistleblower Act. The former never made it to committee; the latter became
law. This strongly suggests that the General Assembly's intent was to exclude
cities from the Whistleblower Act's prohibitions.
Our case law also supports the conclusion that cities are not "political
subdivisions" under the Whistleblower Act. For instance, our sovereign
immunity jurisprudence has long distinguished between counties, which are
protected by sovereign immunity, and municipalities, which are not.
Lexington Fayette Urban Cnty. Gov't v. Smolcic,
9
Compare
142 S.W.3d 128, 132 (Ky. 2004)
("Kentucky counties are cloaked with sovereign immunity. This immunity
flows from the Commonwealth's inherent immunity by virtue of a Kentucky
county's status as an arm or political subdivision of the Commonwealth") with
Bolden v. City of Covington, 803 S.W.2d 577, 579 (Ky. 1991) ("[m]unicipal
corporations enjoy no constitutional protection from tort liability"). While not
dispositive with respect to the issue before us, this distinction is certainly
relevant because the immunity cases discuss the historic legal differences
between municipalities and political subdivisions.
For example, we have noted that Iclounties are unincorporated political
subdivisions of the state, preexisting its formation, whose existence is provided
for constitutionally in Sections 63, 64, and 65 of the Kentucky Constitution.'
In other words, an unincorporated county government is not a 'municipality'
under Kentucky law." Smolcic, 142 S.W.3d at 133-34 (quoting Calvert Invs.,
Inc. v. Louisville & Jefferson Cnty. Metro. Sewer Dist., 805 S.W.2d 133, 138
(Ky.1991)). And in the close immunity cases, where the issue was whether
sovereign immunity extended to a particular entity, we recognized that while
there are a number of factorial considerations, "Kentucky plac[es] greater
weight on the extent to which the entity engages in an essential [state]
government function." Caneyville Volunteer Fire Dep't v. Green's Motorcycle
Salvage, Inc., 286 S.W.3d 790, 804 (Ky. 2009) (citing Kentucky Ctr. for the Arts
v. Berns, 801 S.W.2d 327, 332; Schwindel v. Meade Cnty., 113 S.W.3d 159,
168 (Ky. 2003); Autry v. Western Ky. Univ., 219 S.W.3d 713, 717 (Ky. 2007)).
10
We believe that a similar inquiry is necessary in determining whether an entity
qualifies as a "political subdivision" under the Whistleblower Act.
Whether an entity is or is not a political subdivision is not always clear.
The immunity cases suggest that all we know for sure is that counties are
cloaked with sovereign immunity, e.g., Smolcic, 142 S.W.3d at 132, and cities
are not, e.g., Bolden, 803 S.W.2d at 579-80. This is because "the main
purpose of counties has been to function as administrative subdivisions of the
state." Thomas P. Lewis, James S. Kotas, and Charles N. Carnes,
Consolidation
—
Complete or Functional
—
of City and County Governments in
Kentucky, 42 Ky. L.J. 295, 298 (1953-54). On the other hand, cities are
incorporated to manage purely local governmental functions, not to be agents
of the central state government.
See generally 62 C.J.S. Municipal Corporations
§ 2 (1999).
Numerous other entities, however, fall outside this taxonomy of
city versus state and county, and it is not immediately clear
whether they are agencies of the state, and therefore possibly
entitled to immunity, or more akin to municipal corporations, and
are therefore liable in tort. These in-between entities have given
courts the most trouble in recent years.
Comair, Inc. v. Lexington Fayette Urban Cnty. Airport Corp., 295 S.W.3d 91, 95
-
(Ky. 2009). In Comair, we addressed how to resolve the immunity status of
entities falling within this gray area. We cite Comair with approval in how to
resolve whether one of these entities is subject to the Whistleblower Act. 10,11
10 Specifically, the Comair test mandates a case-by-case analysis focusing, in
general, on "whether the entity exercises a governmental function, which [] means a
`function integral to state government." 295 S.W.3d at 99 (citing Berns, 801 S.W.2d at
332). This will be discussed in more detail infra at footnote 11.
11
11 Wilson points us to the recently decided case of Kindle v. City of
Jeffersontown, Kentucky, 374 F. App'x 562 (6th Cir. 2010), in which the Sixth Circuit
found that municipalities are subject to the Whistleblower Act. Id. at 567. In doing
so, the Sixth Circuit relied on this Court's decision in Consolidated Infrastructure
Management Authority, Inc. v. Allen, 269 S.W.3d 852 (Ky. 2008). Because in Allen we
upheld a jury award under the Act against a municipal corporation, the Sixth Circuit
assumed that we implicitly "approved of applying the H Act to a municipality." 374 F.
App'x at 566. This reliance was misplaced insofar as that court equated
"municipality" with "city."
.
First, the reason we upheld the cities' liability in Allen was not because we
found them to be "political subdivisions" of the Commonwealth, and therefore
"employers" under the Act. That issue was not before us. The cities' liability was
derivative of their absorption of the Consolidated Infrastructure Management
Authority (CIMA), which was the entity on which the proverbial whistle was blown,
and the original liable party. CIMA dissolved shortly after the trial concluded, and was
absorbed by the cities of Russellville and Auburn. Thus, all we approved of in Allen
was the derivative liability of the cities.
The judgment continues to be enforceable against those entities: "Thus, if
a municipal corporation goes out of existence by being annexed to, or
merged in, another corporation, and if no legislative provision is made
respecting the property and liabilities of the corporation which ceases to
exist, the corporation to which it is annexed, or in which it is merged, is
entitled to all its property and is answerable for all its liabilities." 56 Am.
Jur. 2d, Municipal Corporations, Etc. § 80 (2008).
Allen, 269 S.W.3d at 857.
Second, as indicated above, there is a gray area between counties, which are
political subdivisions of the Commonwealth, and cities, which are not. Whether an
entity falling within that gray area is a "political subdivision" under the Whistleblower
Act is to be resolved in the same way that we resolve whether an entity is protected
from suit by sovereign immunity. In Comair, we drew upon, but refocused, the Berns
test for determining immunity status with a test that focuses on "whether the entity
exercises a governmental function, which [Berns] explains means a 'function integral
to state government." 295 S.W.3d at 99 (citing Berns, 801 S.W.2d at 332). "The
focus," Comair directs, "is on state level governmental concerns that are common to all
of the citizens of this state, even though those concerns may be addressed by smaller
geographic entities . . . ." Id. (emphasis added); see also Caneyville, 286 S.W.3d at 802
("although the courts have engaged in somewhat of a hodgepodge of factorial
considerations, Kentucky follows the [] approach in placing greater weight on the
extent to which the entity engages in an essential [state] government function"). In
Comair, we held that the Lexington-Fayette Urban County Airport and its Board were
entities that fell within this definition, and were therefore protected by sovereign
immunity. 295 S.W.3d at 104.
To repeat, whether cities or municipalities are "political subdivisions" under the
Act was not a question presented by Allen. In Allen, CIMA administered water and
sewer services for the cities of Russellville and Auburn. 269 S.W.3d at 854. Thus, it
was larger than a city, but smaller than a county; it was one of those gray-area
12
This case, however, does not present a gray-area entity. Appellee is a
city, and we are convinced that the General Assembly deliberately excluded
cities from the Whistleblower Act. Thus, we hold that cities are not "political
subdivisions" under the Whistleblower Act, and that Wilscin was therefore not
protected by its provisions. 12 This conclusion is supported by the statute's
plain language, its legislative history, and analogous case law.
III.
CONCLUSION
In sum, we hold that cities are not political subdivisions under
Kentucky's Whistleblower Act, and city employees are therefore not protected
by the Act. Accordingly, we affirm the judgment of the Court of Appeals.
All sitting. All concur.
entities. In upholding liability against CIMA, we did not implicitly hold that cities are
subject to the Whistleblower Act; we implicitly recognized CIMA as an entity that, in
providing clean water, sanitation, and a functioning sewer system, addressed "state
level governmental concerns that are common to all of the citizens of this state."
Comair, 295 S.W.3d at 99. Today, we reaffirm that decision.
12 The record reveals that Wilson, in good faith, reported several safety concerns
to the appropriate agencies. We regret that a fact-finder cannot determine whether his
whistleblowing activities were a "contributing factor" to his termination under KRS
61.102. However, until and unless the General Assembly unambiguously
demonstrates its intent that the Whistleblower Act protects city employees, we are
resigned to conclude that it does not.
13
COUNSEL FOR APPELLANT:
Richard E. Peyton
Frymire, Evans, Peyton, Teague & Cartwright
P.O. Box 695
Madisonville, Kentucky 42431-0695
COUNSEL FOR APPELLEE:
Randall Hardesty
Franklin, Gordon, 85 Hobgood
P.O. Box 547
24 Court Street
Madisonville, Kentucky 42431
COUNSEL FOR AMICUS CURIAE:
Christopher James Gadansky
Robert Thomas Watson
McBrayer, McGinnis, Leslie & Kirkland, PLLC
9300 Shelbyville Road, Suite 210
Louisville, Kentucky 40222
14
]]>
