MCDANIEL (HAROLD D.) VS. ISP CHEMICAL, INC.Annotate this Case
RENDERED: DECEMBER 31, 2008; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
APPEAL FROM MARCHALL CIRCUIT COURT
HONORABLE DENNIS R. FOUST, JUDGE
ACTION NO. 02-CI-00479
ISP CHEMICAL, INC.
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BEFORE: CLAYTON, LAMBERT, AND WINE, JUDGES.
LAMBERT, JUDGE: Harold McDaniel appeals from the Marshall Circuit Court’s
entry of summary judgment in favor of ISP Chemical, Inc., on his claims of
wrongful discharge, breach of oral agreement, and breach of covenant of good
faith. After careful review, we affirm.
Harold McDaniel worked for ISP Chemicals (hereinafter “ISP”) and
its predecessor for sixteen years. His last position at ISP was Area Coordinator,
wherein he coordinated maintenance and construction activities for the lab,
administration building, utilities, waste management, and general plant facilities at
ISP’s Calvert City plant. McDaniel also served on the emergency response team,
which responded to injuries, fires, and other accidental hazards.
McDaniel alleges that beginning in the summer of 2000 he observed
serious violations of various environmental and safety laws at the plant. McDaniel
claims he observed employees, including those who monitored and regulated
sensitive instrumentation used in chemical production, sleeping on duty at their
work stations, risking environmental releases, and delaying monitoring of waste
lagoons and other environmental facilities. He claims he also observed unsafe and
unlawful releases or spills of various chemical compounds and waste into
inappropriate areas, or in violation of the closely regulated and permitted control
sites on the employer’s property.
McDaniel brought his concerns about these activities to his
supervisors’ and plant management personnel’s attention and claims that the plant
management personnel refused to address the concerns. On June 23, 2000,
McDaniel reported the conditions to state and federal regulatory authorities and
filed written complaints on June 26, 2000. The Occupational Safety and Health
division of the Kentucky Labor Cabinet (KOSH) initiated an investigation on
August 2, 2000, and the investigations continued through December 20, 2000. On
January 11, 2001, KOSH issued a citation and notification of penalty to ISP.
McDaniel claims he also reported ISP to the Kentucky Environmental Protection
Department and the Division of Water.
Also on January 11, 2001, McDaniel was required “as a condition to
employment” to attend a mental evaluation. After meetings with management,
McDaniel was informed that the psychiatric evaluation was mandatory for his
continued employment. McDaniel reluctantly agreed and underwent an evaluation
by Dr. Kurt Klauberg. Dr. Klauberg concluded that there was no obvious mental
impairment that would prevent McDaniel from continuing his employment and
duties as a utilities area coordinator. On January 29, 2001, McDaniel was
ISP claims that in 1999 McDaniel began a pattern of disruptive and
disturbing behavior by making baseless accusations against his coworkers. ISP
claims that it investigated each time McDaniel reported some type of inappropriate
behavior. Finding nothing to substantiate his accusations, ISP directed McDaniel
to get assistance from the company’s employee assistance plan. ISP claims that in
the fall of 2000, McDaniel informed them that he had made various complaints to
the Kentucky Labor Cabinet about alleged environmental and safety violations at
ISP. ISP claims that McDaniel further alleged that his co-workers were harassing
him in retaliation for making the reports. ISP claims that it immediately
investigated the retaliation claims, and that during this investigation McDaniel
informed management that he believed his co-workers, ISP, the union representing
ISP’s hourly workers, and his church were all conspiring against him. Among
other things, McDaniel claimed his co-workers made sexually suggestive and
graphic comments towards him, that ISP followed him on vacations and was
spying on him, and that there was a conspiracy to convince people at ISP that he
was gay. ISP’s investigation found no evidence to support McDaniel’s claims and
concluded that his accusations were baseless.
After concluding that McDaniel’s allegations against his co-workers
were unfounded, ISP claims it requested that he be examined to determine whether
a medical reason could explain what they termed his “wild” allegations. After
concluding that there was no medical basis to explain McDaniel’s conduct, ISP
terminated his employment.
McDaniel filed this action for retaliatory discharge. ISP filed three
separate motions for summary judgment. The trial court granted summary
judgment for ISP on McDaniel’s claims of intentional infliction of emotional
distress, slander, and defamation, leaving the claims for wrongful discharge
remaining. After twice denying ISP’s motions for summary judgment on the
wrongful discharge claims, the Marshall Circuit Court granted summary judgment
on June 29, 2007, under the purview of Benningfield v. Pettit Environmental, Inc.,
183 S.W.3d 567 (Ky.App. 2005) and Shrout v. TFE Group, Inc., 161 S.W.3d 351
(Ky.App. 2005). The trial court found that McDaniel’s right to seek a remedy at
law for whistle-blowing about environmental safety conditions was preempted by
the administrative structure and remedy in the Kentucky Occupational Health and
Safety Act. This appeal followed.
We review a trial court’s entry of summary judgment de novo. The
standard of review on appeal of a summary judgment is “whether the trial court
correctly found that there were no genuine issues as to any material fact and that
the moving party was entitled to judgment as a matter of law.” Scifres v. Kraft,
916 S.W.2d 779, 781 (Ky.App. 1996). Since summary judgment involves only
legal questions and the existence of any disputed material issues of fact, an
appellate court need not defer to the trial court’s decision. Lewis v. B & R Corp.,
56 S.W.3d 432 (Ky.App. 2001).
McDaniel argues on appeal that his actions in reporting the alleged
violations by ISP, followed closely in time with his discharge, create an inference
of retaliation sufficient to preclude summary judgment. In Kentucky, wrongful
discharge claims are exceptions to the terminable at-will employment rule. In
Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky. 1985), the Kentucky Supreme Court
explained that the wrongful discharge exception to the terminable at-will rule is
limited to instances where: (1) the discharge is contrary to a fundamental and
well-defined public policy, and (2) that public policy is evidenced by a wellestablished legislative enactment. The Supreme Court further refined and
restricted the exception to just two situations: (1) where an employee was
terminated for refusing to violate the law in the course of his employment; or (2)
where the employee was terminated for exercising a right conferred by statute. Id.
at 402; see also Boykins v. Housing Authority of Louisville, 842 S.W.2d 527, 530
(Ky. 1992). The determination of whether McDaniel meets either of these two
criteria is a question of law, and thus is appropriate under summary judgment
analysis. Grzyb, 700 S.W.2d at 401.
In the instant case, it does not appear from the record that McDaniel
was terminated for refusing to violate the law in the course of his employment,
although he tries to make an argument to the contrary. McDaniel argues that he
was terminated for refusing to conceal reportable environmental safety incidents at
the plant; however there is nothing in the record to suggest that McDaniel was ever
requested to conceal environmental safety violations. Thus, McDaniel must show
that his discharge was in retaliation for exercising his statutorily conferred rights.
McDaniel’s claim for wrongful discharge was initially based on
alleged violations of several state and federal statutes, including the Occupational
Safety and Health Act (OSHA) and appears to now be based on two Kentucky
provisions, the Kentucky Environmental Protection Act (KEPA) and the Kentucky
Water Quality Act (KWQA).
ISP argues that neither KEPA nor KWQA are directed at providing
rights or protections to employees in their employment settings. After reviewing
KRS 224.01-400 and KRS 224.70-100, we agree. Those statutes do not address
the employment setting and do not provide a well-established right upon which
McDaniel could base a wrongful discharge claim. In Shrout v. The TFE Group,
161 S.W.3d 351, 354-55 (Ky.App. 2005), this Court affirmed the dismissal of a
plaintiff’s wrongful discharge claim because “protection of employees [was] not
the primary purpose of [the] statute.”
In the instant case, the primary purpose of the statutes was not to
protect employees but instead to protect the welfare of the public in general.
KQWA was designed to safeguard from pollution the uncontaminated waters in
Kentucky, to prevent the creation of any new polluted waters, and to abate any
existing pollution. The KEPA appears to create a commission to regulate the
release of various contaminants into the environment and does not contain a
private right of action or any scheme remotely related to retaliatory discharge.
Thus, because neither statute provides a well-established right upon which
McDaniel could base a wrongful discharge claim, his claims for retaliatory
discharge necessarily fail and summary judgment was appropriate.
McDaniel also argues that when ISP required him to see a
psychiatrist, his relationship with ISP changed from an at-will employment
relationship to an implied contract relationship, and that ISP breached the implied
employment contract. However, there is nothing in the record to suggest that ISP’s
request was followed by a promise of continued employment for a specified time
period, and we disagree that their request changed the working relationship from
at-will to implied contract.
Finally, McDaniel argues that ISP breached the covenant of good faith
and fair dealing. Initially, we decline to address this argument because Kentucky
law does not support a covenant of good faith and fair dealing in an at-will
employment context where an employment contract does not exist. See Wyant v.
SCM Corp., 692 S.W.2d 814, 815 (Ky.App. 1985); Day v. Alcan Aluminum Corp.,
675 F.Supp. 1508, 1513 (W.D.Ky. 1987); and Webster v. Allstate Ins. Co., 689
F.Supp. 689, 692 (W.D.Ky. 1986). Thus, there was no covenant of good faith and
fair dealing for ISP to breach and McDaniel’s claims to the contrary fail.
Secondly, we hold that this argument was not preserved for review. CR 76.14(6)
states that “[a] party shall be limited on appeal to issues raised in the prehearing
statement except that when good cause is shown the appellate court may permit
additional issues to be submitted upon timely motion.” Given that the
requirements of CR 76.14(6) were not met, we decline to address this issue further.
Because McDaniel could not prove the elements of retaliatory
discharge; was an at-will employee; and because a covenant of good faith and fair
dealing did not exist in this context, we affirm the judgment of the Marshall Circuit
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Mark S. Medlin
Richard B. Lapp
C. Thomas Miller