SHEPHARD v. COMPSOURCE OKLAHOMA

SHEPHARD v. COMPSOURCE OKLAHOMA
2009 OK 25
209 P.3d 288
Case Number: 104865
Decided: 04/28/2009

IN THE SUPREME COURT OF THE STATE OF OKLAHOMA

SUSAN SHEPHARD, Plaintiff/Appellant,
v.
COMPSOURCE OKLAHOMA and JOE DANE JOHNSON, Respondents/Appellees.

CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION I
APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY,
STATE OF OKLAHOMA

HONORABLE BARBARA G. SWINTON, TRIAL JUDGE

¶0 Unclassified State Employee brought suit against her former State Employer CompSource Oklahoma and her former Supervisor at CompSource. Employee alleged that her Supervisor's decision to terminate her for reporting illegal travel claims (1) violated the State's public policy prohibiting termination of whistle-blowers and (2) interfered with her employment contract with CompSource. The trial court granted summary judgment in favor of CompSource, ruling that Employee had an adequate remedy under the State Whistleblower Act thereby precluding a wrongful termination suit. The trial court also granted summary judgment in favor of Supervisor, ruling that Supervisor could not incur personal liability, because CompSource ratified his decision to terminate Employee. The Court of Civil Appeals affirmed and Employee timely sought certiorari review by this Court.

CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL
APPEALS VACATED; JUDGMENT AFFIRMED.

Mark Hammons and Amber L. Hurst, HAMMONS, GOWENS & ASSOCIATES, Oklahoma City, Oklahoma, for Plaintiff/Appellant.
Joseph Walters and Paul A. Ross, McAFEE & TAFT, Oklahoma City, Oklahoma, for Defendants/Appellees.

REIF, J:

¶1 The issues presented on certiorari review are (1) whether the State Whistleblower Act, 74 O.S. Supp. 2008 § 840-2.5, provides an adequate remedy to protect unclassified state employees from wrongful termination and (2) whether the Governmental Tort Claims Act,

¶2 In summary judgment proceedings, Employee Shephard presented evidentiary material to support her claim that CompSource and Supervisor Johnson wrongfully terminated her for reporting illegal travel claims. In response, CompSource and its Supervisor offered uncontroverted evidentiary material showing (1) Employee Shephard began, but did not complete, the appeal process to challenge her termination as provided in the Whistleblower Act, and (2) CompSource ratified its Supervisor's decision to terminate Employee Shephard. Both the trial court and Court of Civil Appeals concluded these latter facts precluded liability on the part of CompSource and Supervisor as a matter of law. Both the trial court and Court of Civil Appeals ruled the Whistleblower Act provided Employee Shephard an adequate remedy that precluded a tort cause of action and CompSource's ratification shielded Supervisor from personal liability.

I.

¶3 We will first consider whether the State Whistleblower Act provides an adequate remedy to protect state employee whistleblowers from wrongful termination. Determinations of the public policy protecting employees from wrongful termination and the adequacy of remedy are questions of law to be resolved by this Court. McCrady v. Department of Public Safety,

¶4 The Legislature has declared that "[t]he purpose of the Whistleblower Act is to encourage and protect the reporting of wrongful governmental activities and to deter retaliation against state employees for reporting those activities." 74 O.S. Supp. 2008 § 840-2.5 (A).

¶5 In addition to prohibiting officers and employees of state agencies from taking disciplinary action against whistleblowers, the Legislature has provided two measures to ensure the purpose of the Whistleblower Act is carried out generally and in specific cases. The Legislature has provided (1) an appeal with the Oklahoma Merit Protection Commission to any state employee or former state employee aggrieved pursuant to this section, and (2) corrective action against any employee found to have violated the Whistleblower Act. 74 O.S. Supp. 2008 § 840-2.5 (G) and (H).

¶6 These dual remedies provide relief to the offended employee and sanctions for the offending supervisor or agency official. Relief provided to the whistleblower on appeal to the Merit Protection Commission includes (1) reinstatement, (2) back pay and other benefits in appropriate cases, and (3) expungement of the adverse action from any and all of the employee's personnel records. Okla. Admin. Code 455:10-9-2(f)(1)(B). A prevailing employee can also be awarded attorney fees and costs when the employee can demonstrate by a preponderance of the evidence that the position of the non-prevailing party was without reasonable basis or was frivolous. Okla. Admin. Code 455:10-15-1. The sanctions that the Merit Protection Commission can visit on an offending supervisor or agency official are set forth in subsection (G) of the Whistleblower Act.

¶7 Significantly, the Legislature did not authorize a private right of action for the enforcement of the Whistleblower Act. Because the Legislature omitted a private right of action to enforce the policy in the Whistleblower Act, we conclude the remedies it provided in the Act were sufficient to protect the statutory public policy.

¶8 In reaching this conclusion, this Court is mindful that unclassified state employees are at-will employees. McCrady,

¶9 Even though the Vasek case and the case at hand both involve statutory public policy prohibiting the termination of whistleblowers, the Vasek case recognized a Burk tort as a proper remedy because "there is no statutory remedy sufficient to protect th[e] Oklahoma public policy goal [of protecting employees who report violations of the Oklahoma Occupational Health and Safety Standards Act.]." Vasek,

¶10 In reaching this conclusion this Court is also mindful of our recent holding in Kruchowski which addressed the disparate treatment of victims of status based discrimination under federal and state anti-discrimination acts. The disparity in question was that victims of handicap discrimination were afforded a private right of action, but victims of race, gender and age discrimination were not. This Court held that these status based groups constituted a unified class and must, therefore, be afforded commensurate remedies. This Court made it clear, however, that the commensurate remedy rule was limited to resolving the disparate treatment of victims of status based discrimination. This Court specially noted that it did not apply to cases in which a plaintiff's conduct, like whistleblowing, is alleged to have triggered a discharge. Kruchowski expressly reaffirms that the "adequacy of remedies" for whistleblowers is to be decided under the sufficiency test of Vasek, which in turn applied McCrady.

¶11 The principles of Kruchowski were subsequently reaffirmed in Shirazi v. Childtime Learning Center, Inc.,

¶12 Where a statutory remedy exists that is sufficient to protect the Oklahoma public policy goal, an employee has an adequate remedy that precludes resort to a tort cause of action to redress a termination in violation of the public policy. McCrady,

II.

¶13 We next consider whether Supervisor was shielded from personal liability by CompSource's ratification of his decision to terminate Employee Shephard. The effect of such ratification is a question of law in the context of the summary judgment record presented.

¶14 Ratification is defined as the giving of sanction and validity to something done by another. Woodruff v. Woodruff,

¶15 In Wilson, the police officer sought to hold the police chief personally liable for terminating the officer in violation of a policy forbidding the termination. The police officer contended that the police chief acted outside the scope of his employment.

¶16 The court observed that this alleged wrongful termination and tortious interference with the police officer's employment fell under the Governmental Tort Claims Act. The court also observed that the police chief could not be held personally liable if the chief was operating within the scope of employment; that is, acting in good faith and within the duties of the employee's office and performing tasks lawfully assigned. In contrast, the court noted that acts undertaken with malice or in bad faith are not within the scope of employment. Also, acts contrary to the interests of the employer are not within the scope of employment. See Martin v. Johnson,

¶17 In deciding that the police chief remained within the scope of his employment, the court emphasized the fact that the City admitted the police chief was acting within the course and scope of his employment and never sought to escape its potential liability for the police chief's actions. In other words, the City ratified the police chief's decision and established prima facie that the police chief acted in good faith and did not act contrary to the City's interests.

¶18 The court noted that the fact the police chief terminated the officer in violation of a policy forbidding the termination did not alone take the police chief outside the scope of his employment. The court said "[a]cting in good faith and using poor judgment are not mutually exclusive and, the use of poor judgment does not, without more, exceed the scope of employment." The court further observed that a decision cannot be characterized as malicious or in bad faith based only on the fact of the interference with the employment contract. The court stated that where a summary judgment record is devoid of other evidence regarding the alleged tort-feasor's intentions toward the terminated employee, there is no legal basis for concluding the employee who made the termination decision acted outside the scope of his employment.

¶19 The summary judgment record in the case at hand is likewise devoid of any evidentiary material regarding the Supervisor's malicious or bad faith intentions toward Employee Shephard. The fact that Supervisor's decision to terminate Employee Shephard was contrary to policy prohibiting the termination does not alone take that decision outside the scope of Supervisor's employment.

¶20 The Legislature has provided immunity for the state employees acting within the scope of their employment.

¶21 The summary judgment record in the case at hand reveals the want of evidentiary material to support the element of "bad faith" on the part of Supervisor that is required to breach the shield of statutory immunity and impose liability for tortious interference with contractual relations. Where the summary judgment record demonstrates want of a material element of a plaintiff's claim, summary judgment is properly rendered for the defendant. Manley v. Brown,

III.

¶22 In conclusion, we hold that even if Supervisor terminated Employee Shephard for reporting false travel claims, and this reason violated the State Whistleblower Act, this decision was ratified by CompSource. CompSource's ratification of this decision establishes prima facie that Supervisor acted within the scope of his employment and that he is entitled to immunity from personal liability as provided in the Governmental Tort Claims Act, particularly in the absence of evidentiary material that Supervisor acted with malice or bad faith. Under the Governmental Tort Claims Act, CompSource bears any tort liability for the termination decision. However, Employee Shephard cannot maintain a tort cause of action against CompSource for a termination decision in violation of the Whistleblower Act, because the Whistleblower Act provides adequate remedies to redress violations of the Act and "sufficient to protect Oklahoma's public policy goals" expressed in the Act. Consequently, summary judgment was properly entered in favor of CompSource and Supervisor, and that summary judgment is AFFIRMED.

¶23 EDMONDSON, C.J., HARGRAVE, OPALA, KAUGER, WINCHESTER, COLBERT, and REIF, JJ., concur.

¶24 TAYLOR, V.C.J., concurs in result.

¶25 WATT, J., dissents.

FOOTNOTES

1 74 O.S. Supp. 2008 § 840-2.5 (A) provides in pertinent part:

This section shall be known and may be cited as the "Whistleblower Act". The purpose of the Whistleblower Act is to encourage and protect the reporting of wrongful governmental activities and to deter retaliation against state employees for reporting those activities. No conviction of any person shall be required to afford protection for any employee under this section.

2 74 O.S. Supp. 2008 § 840-2.5 (B) provides in pertinent part:

For purposes of this section, "agency" means any office, department, commission or institution of the state government. No officer or employee of any state agency shall prohibit or take disciplinary action against employees of such agency, whether subject to the provisions of the Merit System or in unclassified service, for:

1. Disclosing public information to correct what the employee reasonably believes evidences a violation of the Oklahoma Constitution or law or a rule promulgated pursuant to law;

2. Reporting a violation of the Oklahoma Constitution, state or federal law, rule or policy; mismanagement; a gross waste of public funds; an abuse of authority; or a substantial and specific danger to public health or safety;

3. Discussing the operations and functions of the agency, either specifically or generally, with the Governor, members of the Legislature, the print or electronic media or other persons in a position to investigate or initiate corrective action; or

4. Taking any of the above actions without giving prior notice to the employee's supervisor or anyone else in the employee's chain of command.

3 74 O.S. Supp. 2008 § 840-2.5 (E) provides in pertinent part:

1. "Disciplinary action" means any direct or indirect form of discipline, any dismissal, demotion, transfer, reassignment, suspension, reprimand, admonishment, warning of possible dismissal, reduction in force, reduction in rank, reduction in status, or withholding of work;

2. "Probation" means that period of time, after an officer or employee is found to have violated the provisions of this section and corrective action is ordered, during which time that officer's or employee's performance and conduct is being monitored by the employing agency for further violations of the Oklahoma Personnel Act; and

3. "Mismanagement" means fraudulent activity, criminal misuse of funds or abuse or violation of a well-established, articulated, clear and compelling public policy.

4 74 O.S. Supp. 2008 § 840-2.5 (G) and (H) provide in pertinent part:

G. Any state employee or former state employee aggrieved pursuant to this section, or any authorized third-party state employee who has actual knowledge of the discipline or retaliatory act taken against the whistleblower, may file an appeal with the Oklahoma Merit Protection Commission within sixty (60) days of the alleged violation. The Oklahoma Merit Protection Commission shall promulgate rules to establish procedures for the conduct of investigations. If, after investigation, the Executive Director determines a violation of this section may have occurred, the Executive Director shall appoint an administrative law judge to hear the case as provided for in Section 840-6.6 of this title.

H. If, after the hearing, it is determined that a violation has occurred, the Commission or administrative law judge shall order corrective action pursuant to Section 840-6.6 of this title. Such corrective action shall include, but not be limited to, suspension without pay, demotion or discharge. Any employee found to have violated this section of law, in addition to being suspended or demoted, shall be placed on probation for six (6) months. Such probation shall commence on the date of the final decision filed by the Commission. Any employee who is determined to have violated the Oklahoma Personnel Act, Section 840-1.1 et seq. of this title, while serving said probation shall forfeit the position of the person for one (1) year. Any employee, supervisor or appointing authority of any state agency, whether subject to the provisions of the Merit System of Personnel Administration or in unclassified service, who knowingly and willfully violates the provisions of this section shall forfeit the position of the person and be ineligible for appointment to or employment in a position in state service for a period of at least one (1) year and no more than five (5) years. The decision of the Commission in such cases may be appealed by any party pursuant to Article II of the Administrative Procedures Act.

5 See note 4, supra.

6 The Vasek case dealt with section 403(B) of the Oklahoma Occupational Health and Safety Standards Act, 40 O.S.2001 and Supp. 2007 §§ 401 through 435. This section prohibits discharge of any employee who files a complaint or institutes a proceeding under the Act. This Court directed the parties in the case at hand to do supplemental briefing concerning the application of the Vasek case in determining whether Ms. Shephard had an adequate remedy under the Whistleblower Act. Because Vasek represents this Court's most recent pronouncement in the area of whistleblowing activity, Ms. Shephard's claim was examined thereunder, rather than Tate v. Browning-Ferris, Inc., 1992 OK 72, 833 P.2d 1218, as argued by the parties below.