Murray v. St. Michael's College

MURRAY_V_ST_MICHAELS_COLLEGE.94-538; 164 Vt 205; 667 A.2d 294

[Filed 08-Sep-1995]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                     No. 94-538


Barbara and Michael Murray                             Supreme Court

                                                       On Appeal from
    v.                                                 Chittenden Superior Court


St. Michael's College and
Donald Sutton                                          June Term, 1995



Linda Levitt, J.

       David H. Greenberg, Burlington, for plaintiffs-appellants

       Paul K. Sutherland and Michael J. Harris of Sutherland & Collins,
  Inc., Burlington, for defendants-appellees

       Jeffrey L. Amestoy, Attorney General, and Seth A. Steinzor, Assistant
  Attorney General, Montpelier, for amicus curiae State of Vermont


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


       JOHNSON, J.   Plaintiff Michael Murray, a former security officer for
  St. Michael's College, and his wife, Barbara Murray (FN1), appeal the
  superior court's order granting defendants summary judgment on their claims
  that the College and plaintiff's supervisor (1) discriminated against
  plaintiff in retaliation for his filing a workers' compensation claim, (2)
  violated a covenant of good faith and fair dealing implied in his
  employment contract, and (3) intentionally caused him to suffer emotional
  distress.  Plaintiff also contends that the court failed to address his
  claim that his supervisor tortiously interfered with his contractual
  relations with the College.

 

  We reverse in part and affirm in part.

                                   I.

       From 1985 to 1993, plaintiff worked for defendant College as a
  security officer under the supervision of defendant Donald Sutton, the
  Director of Safety and Security.  For the last four years of his employment
  with the College, he held the rank of Sergeant.  In May 1991, while working
  overtime during commencement events, plaintiff experienced swelling and
  discomfort in his left knee.  As the result of that injury, he filed a
  workers' compensation claim and was out of work from late May until early
  September 1991.  After conducting an investigation, the College's workers'
  compensation carrier denied plaintiff's claim in August 1991.  Plaintiff
  appealed the denial to the Department of Labor and Industry and obtained a
  decision entitling him to workers' compensation benefits.  Plaintiff
  alleges that during and after the period in which he applied for and
  received the benefits, defendants discriminated against him by badgering
  him to come back to work, changing his employment duties and
  responsibilities, requiring him to work night shifts in breach of a
  previous agreement, changing his work hours, giving him unfairly low job
  evaluations, and challenging his right to receive workers' compensation
  benefits.

       In May 1992, an incident between plaintiff and a graduate student led
  to disciplinary action against plaintiff.  The student asked plaintiff, who
  had some experience repairing cars, if he was interested in repairing and
  possibly buying the student's car, which was not running. After working on
  the car, plaintiff told the student that it needed major repairs.  He
  offered to help the student junk the car, saying he would need the title to
  dispose of the vehicle.  After obtaining the title, plaintiff arranged to
  sell the car for $200.  When the student heard about the sale, he
  complained to plaintiff's supervisor, who suspended plaintiff pending
  further decision. Four days later, Sutton demoted plaintiff from sergeant
  to patrol officer and placed him on probation for six months.  Plaintiff
  appealed the decision, first to the Vice President of Administration and
  then to the President of the College, who upheld the demotion but ruled
  that it would run only for one year, at which time plaintiff would be
  eligible to be reappointed to

 

   sergeant.

       Plaintiff never returned to work following his demotion.  During the
  second half of 1992, plaintiff submitted letters from various doctors and
  psychiatrists stating that stress-induced depression prevented him from
  working.  Plaintiff was fired as of March 5, 1993, after his short-term
  disability benefits ran out.

       The Murrays filed suit against defendants in March 1993.  On July 11,
  1994, the superior court granted defendants' summary judgment motion,
  ruling that (1) plaintiff had failed to demonstrate that his demotion was
  retaliatory in nature, (2) defendants had come forward with sufficient
  evidence of a legitimate, nondiscriminatory reason for the demotion, (3)
  plaintiff's remaining allegations of discriminatory treatment were
  insufficient to establish a discrimination claim, and (4) plaintiffs' other
  claims arose directly from the discrimination claim and thus could not
  stand on their own.  On July 22, 1994, plaintiffs filed a motion for
  reconsideration, which was denied on September 9, 1994.  Plaintiffs filed a
  notice of appeal on October 5, 1994.

       On appeal, plaintiff argues that the court erred in granting summary
  judgment to defendants because (1) his pleadings and affidavits demonstrate
  the existence of genuine issues of material fact as to whether defendants
  discriminated against him; (2) his claims of intentional infliction of
  emotional distress and of a violation of an implied covenant of good faith
  and fair dealing stand independently of the discrimination claim; and (3)
  the court failed to address his claim of intentional interference with
  contractual relations.  Defendants counter by arguing that (1) this Court
  lacks jurisdiction to review the trial court's July 11, 1994 ruling because
  plaintiff's motion for reconsideration was, in effect, a V.R.C.P. 60(b)
  motion, which does not toll the thirty-day period for filing a notice of
  appeal; (2) the court did not abuse its discretion in denying plaintiff's
  motion for reconsideration; and (3) in any event, the court did not err in
  granting their motion for summary judgment.  The Attorney General has filed
  an amicus curiae brief, in which he takes no position on the merits of
  plaintiff's claims, but urges this Court to recognize that employees have a
  private right of action to bring suit alleging that their employer
  discriminated

 

  against them in retaliation for their filing a workers' compensation
  claim, in violation of 21 V.S.A. Sec. 710.

                                  II.

       At the outset, we reject defendants' argument that plaintiffs' appeal
  is untimely filed. Both the timing and contents of plaintiffs' motion for
  reconsideration indicate that it was, for all intents and purposes, a
  motion to alter or amend the judgment under V.R.C.P. 59(e), not a Rule
  60(b) motion for relief from judgment.  The motion was timely filed.  See
  V.R.C.P. 59(e) (motion to alter or amend must be filed within ten days of
  judgment); V.R.C.P. 6(a) (when period prescribed is less than eleven days,
  intermediate Saturdays and Sundays are excluded from computation). 
  Therefore, the time period for filing an appeal of the July 11, 1994 order
  was tolled pending a ruling on the motion.  V.R.A.P. 4; see Osborn v.
  Osborn, 147 Vt. 432, 433, 519 A.2d 1161, 1162-63 (1986) (Rule 59(e) motion
  suspends finality of judgment, allowing trial court to revise initial
  judgment if necessary).

                                  III.

       Defendants first argue that plaintiffs' discrimination claim should be
  barred because this Court has not recognized a private cause of action for
  monetary damages based upon an alleged violation of 21 V.S.A. Sec. 710(b),
  which provides that "[n]o person shall discharge or discriminate against an
  employee from employment because such employee asserted a [workers'
  compensation] claim."  We conclude that a private right of action under Sec.
  710 is appropriate.

       Although generally an at-will employment contract may be terminated by
  either party to the contract at any time with or without cause, Ross v.
  Times Mirror, Inc., No. 94-224, slip op. at 5 (Vt. July 7, 1995), this
  Court has recognized an exception to this general rule when the employer's
  alleged actions contravene clear and compelling public policy.  Jones v.
  Keogh, 137 Vt. 562, 564, 409 A.2d 581, 582 (1979); see Payne v. Rozendaal,
  147 Vt. 488, 494, 520 A.2d 586, 589 (1986) (discharge of employee solely on
  basis of age is practice so contrary to society's concerns for providing
  equity and justice that there is clear and compelling policy against it;

 

  therefore, at-will employee may bring wrongful discharge claim in such
  situation).  Under this exception, the great majority of courts have
  recognized the tort of retaliatory discharge for filing a workers'
  compensation claim.  2A A. Larson, The Law of Workmen's Compensation Sec.
  68.36(a), at 284-307 (1995); see Niesent v. Honestake Mining Co., 505 N.W.2d 781, 783 (S.D. 1993) (citing cases so holding).  The reasoning
  behind this holding is best summed up in the leading case, Frampton v.
  Central Indiana Gas Co., 297 N.E.2d 425, 427 (Ind. 1973):


        The [Workmen's Compensation] Act creates a duty in the
        employer to compensate employees for work-related injuries
        (through insurance) and a right in the employee to receive such
        compensation.  But in order for the goals of the Act to be realized
        and for public policy to be effectuated, the employee must be able
        to exercise his right in an unfettered fashion without being subject
        to reprisal.  If employers are permitted to penalize employees for
        filing workmen's compensation claims, a most important public
        policy will be undermined.  The fear of being discharged would
        have a deleterious effect on the exercise of a statutory right.
        Employees will not file claims for justly deserved compensation --
        opting, instead, to continue their employment without incident.
        The end result, of course, is that the employer is effectively
        relieved of his obligation.

   (Emphasis in original.)

       We agree with the Indiana Supreme Court's holding that employees have
  a private right of action when an employer allegedly discharges them or
  discriminates against them for filing a workers' compensation claim. 
  Workers' compensation law represents a public policy compromise in which
  "the employee gives up the right to sue the employer in tort in return for
  which the employer assumes strict liability and the obligation to provide a
  speedy and certain remedy" for work-related injuries.  Lorrain v. Ryan, 160
  Vt. 202, 214, 628 A.2d 543, 551 (1993). Allowing employers to undermine
  this important public policy objective is unacceptable.  We are not
  dissuaded by the fact that Sec. 710(c) gives the attorney general the
  discretion to seek civil penalties against employers who retaliate against
  employees for filing workers' compensation claims.  Retaliatory
  discrimination by an employer constitutes both a public and a private
  wrong, each of which is entitled to vindication.  Lally v. Copygraphics,
  428 A.2d 1317, 1318 (N.J.

 

  (1981).  The limited and discretionary remedies in Sec. 710 will be
  further augmented by the employee's right to obtain civil redress.  Id.;
  see 2A A. Larson, supra, Sec. 68.36(b), at 313-14 (majority holding is that
  remedy created by retaliatory discharge statute is not exclusive, whether
  that remedy is civil, criminal, or administrative); Wal-Mart Stores, Inc.
  v. Baysinger, 812 S.W.2d 463, 467 (Ark. 1991) (rejecting argument that
  because worker's compensation statute does not provide civil remedy,
  employee has no private right of action based on retaliatory discharge for
  filing workers' compensation claim); Kelsay v. Motorola, Inc., 384 N.E.2d 353, 359 (Ill. 1979) (same); Brown v. Transcon Lines, 588 P.2d 1087,
  1094-95 (Or. 1978) (allowing employees to file civil tort suit
  notwithstanding statute granting commissioner discretionary power to
  investigate and act on complaints of retaliation for filing workers'
  compensation claims).

                                  IV.

       Next, plaintiffs argue that the court erred by granting summary
  judgment to defendants on the discrimination claim.  To withstand summary
  judgment regarding his claim that he was discriminated against for filing a
  workers' compensation claim, plaintiff was required to present a prima
  facie case of retaliatory discrimination, namely, that (1) he was engaged
  in a protected activity, (2) his employer was aware of that activity, (3)
  he suffered adverse employment decisions, and (4) there was a causal
  connection between the protected activity and the adverse employment
  decision.  Gallipo v. City of Rutland, ___ Vt. ___, ___, ___, 656 A.2d 635,
  640, 642 (1994).  Once plaintiff established a prima facie case of
  retaliatory discrimination, defendants were required to articulate some
  legitimate, nondiscriminatory reason for the challenged conduct; if
  defendants articulated such a reason, plaintiff was required to prove that
  the reason was a mere pretext.  Sprague v. University of Vermont, 661 F. Supp. 1132, 1140 (D. Vt. 1987).

       Here, the superior court ruled that defendants did articulate a
  legitimate, nondiscriminatory reason for plaintiff's demotion -- the
  incident involving the student's car -- and that plaintiff's remaining
  allegations of discrimination were insufficient to establish a claim of
  discrimination. In support of the latter conclusion, the court stated that
  (1) defendants' initial refusal to process

 

  plaintiff's workers' compensation claim was negated by the fact that
  plaintiff ultimately received the benefits, and (2) Sutton's badgering of
  plaintiff, changing his shift, and expressing doubt regarding the severity
  of his injuries did not amount to discrimination.  We agree with plaintiff
  that the court placed excessive emphasis on the demotion and not enough on
  the various other alleged acts of discrimination.

       Among other things, plaintiff alleged by affidavit that (1) Sutton
  expressed anger and frustration over plaintiff's decision to apply for
  workers' compensation benefits and over the length of time plaintiff was
  away from work; (2) a College official tried to persuade plaintiff to drop
  his appeal of the initial denial of benefits; and (3) upon plaintiff's
  return to work, Sutton reduced his duties, required him to work the night
  shift in violation of a prior agreement, and began giving him unfairly low
  job evaluations.  Plaintiff alleges that these and other actions initiated
  by Sutton and the College demonstrate a pattern of harassing behavior
  designed to induce plaintiff's departure.  Plaintiff also challenges the
  court's conclusion that his demotion was not the result of disparate
  treatment.  He points out that in his motion for reconsideration he cited
  testimony in his deposition that other security officers were disciplined
  more leniently for what what he believed to be more egregious conduct.

       There is no dispute that plaintiff was engaged in a protected activity
  filing a workers' compensation claim -- and that defendants were aware
  of this activity.  Defendants state only that the President of the College,
  who reviewed the demotion decision, was unaware that plaintiff had filed a
  workers' compensation claim.  Further, plaintiff alleges various employment
  decisions by defendants that followed the filing of his workers'
  compensation claim and led to his work disability -- reduction of duties
  and responsibilities, issuance of unsatisfactory work evaluations,
  assignment to the night shift, and demotion for a allegedly minor
  infraction.  These actions, if undertaken as alleged, are plainly adverse,
  and thus support his claim of discrimination, notwithstanding defendants'
  contention that an employee must suffer a loss of employment, promotion, or
  key benefits before a cause of action arises under Sec. 710(b).  See 21
  V.S.A. Sec.
  
 

  710(b) (no person shall "discharge or discriminate" against employee
  for asserting workers' compensation claim).

       In response to these alleged adverse decisions, defendants offer a
  legitimate, nondiscriminatory reason only for the disciplinary action
  resulting from the car-transfer incident. Thus, although defendants have
  articulated a legitimate, nondiscriminatory reason for plaintiff's being
  disciplined, genuine issues of material fact remain concerning whether
  plaintiff was discriminated against for filing a workers' compensation
  claim, and whether the severity of the disciplinary action resulting from
  the car-transfer incident was the result of discriminatory disparate
  treatment.  The timing of the alleged actions against plaintiff, relative
  to his filing of the workers' compensation claim, is a sufficient showing,
  for purposes of surviving summary judgment, of a causal connection between
  the protected activity and the adverse employment decisions.  See Gallipo,
  ___ Vt. at ___, 656 A.2d  at 642 (for purposes of prima facie case,
  plaintiff may establish link between protected activity and adverse
  employment decision by showing that timing of complaint and retaliatory
  action was suspect).  Accordingly, the superior court's order granting
  defendants summary judgment must be reversed.

                                  V.

       We now consider the two claims dismissed by the superior court as
  derivative of plaintiff's dismissed discrimination claim.  First,
  plaintiff's implied-covenant-of-good-faith claim alleges that defendants'
  discriminatory actions in retaliation for his filing a workers'
  compensation claim violated the covenant of good faith and fair dealing
  implied in his employment contract.  Because the bases of this claim are
  essentially the same as those supporting plaintiff's actionable
  discrimination claim under Sec. 710(b), the claim is superfluous, and thus
  we uphold its dismissal.  Cf. Ross, slip op. at 9 (declining to recognize
  implied covenant of good faith and fair dealing as means of recovery where
  there is unmodified at-will employment relationship and employee is
  challenging dismissal based on right to tenure, as opposed to accrual of
  benefits).  Second, we conclude that the alleged actions of the plaintiff's
  
  

  supervisor and employer, if taken as true, are not sufficiently
  extreme and outrageous, as a matter of law, to amount to intentional
  infliction of emotional distress.  See Gallipo, ___ Vt. at ___, 656 A.2d  at
  643 (issuance of reprimand letters and assignment to "detail" chores
  normally assigned to junior firefighters failed to meet plaintiff's heavy
  burden of demonstrating that defendants' conduct was so outrageous as to
  surpass all possible bounds of decency); Denton v. Chittenden Bank, ___ Vt.
  ___, ___, 655 A.2d 703, 706 (1994) (mere insults and indignities in
  workplace generally do not rise to level of outrageous conduct necessary to
  prevail on claim of intentional infliction of emotional distress).

                                  VI.

       Next, we address plaintiff's claim of tortious interference with a
  contract, which is directed against Mr. Sutton.  "This tort provides
  protection even to contracts terminable at will." Trepanier v. Getting
  Organized, Inc., 155 Vt. 259, 268, 583 A.2d 583, 589 (1990).  Further, the
  tort is applicable in limited situations against other employees or
  officers of the plaintiff's employer, the key factor being whether the
  defendants were acting outside the scope of their employment to further
  their own interests.  See Lyon v. Bennington College Corp., 137 Vt. 135,
  138-39, 400 A.2d 1010, 1012-13 (1979) (faculty member's claim against
  officers of college for inducing college to break its contract with him
  presented viable tort claim; factual determination as to whether defendants
  acted within scope of employment when doing alleged acts must be determined
  at trial).  See generally Annotation, Liability of Corporate Director,
  Officer, or Employee for Tortious Interference with Corporation's Contract
  with Another, 72 A.L.R.4th 492 (1989) (stating circumstances in which
  courts have allowed plaintiffs to bring contractual interference suits
  against other employees of plaintiffs' employer); Restatement (Second) of
  Torts Sec. 767 (1979) (stating factors for court's consideration in
  determining whether defendants' actions are "improper" so as to make
  defendants liable under contractual interference claim). Nevertheless,
  summary judgment in favor of Sutton is appropriate here because of the
  absence of any allegation by plaintiff that Sutton acted outside the scope
  of his employment or in his own

 

  personal interest in dealing with plaintiff.  See Kelley v. City of
  Mesa, 873 F. Supp. 320, 333 (D. Ariz. 1994) (defendants entitled to summary
  judgment on contractual interference claim because plaintiff employee did
  not provide any evidence from which court could infer that defendant
  employees were acting individually rather than in their official capacity);
  cf. Ross, slip op. at 11 (no error in granting summary judgment for
  defendant supervisor on contractual interference claim where plaintiff
  failed to state cause of action).

                                  VII.

       Finally, because plaintiff has a viable discrimination claim against
  defendants, his wife's derivative claim for lack of consortium is not
  barred by the exclusivity provision of the workers' compensation act.  Cf.
  Lorrain, 160 Vt. at 215, 628 A.2d  at 551 (no rational basis exists for
  allowing injured party's tort claim while denying spouse's
  loss-of-consortium claim); Derosia v. Book Press, Inc., 148 Vt. 217, 220,
  531 A.2d 905, 907 (1987) (since injured employee was barred from bringing
  tort action under 21 V.S.A. Sec. 622, his wife's derivative
  loss-of-consortium claim is similarly barred).  On the other hand, Barbara
  Murray's intentional-infliction-of-emotional-distress claim cannot survive
  summary judgment for the same reason that her husband's claim fails.
  
       Summary judgment is reversed with respect to plaintiff Michael
  Murray's discrimination claim and plaintiff Barbara Murray's
  loss-of-consortium claim.  Summary judgment is affirmed with respect to
  plaintiffs' other claims.

                                      FOR THE COURT:

                                      _________________________________________
                                      Associate Justice


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                                  Footnotes


FN1.   Barbara Murray joins her husband as a plaintiff in this action. 
  She claims that, as a direct and proximate result of defendants'
  discriminatory actions, she suffered extreme pain, mental anguish, and loss
  of her husband's services, support, comfort, and care.  To simplify
  matters, we refer to Michael Murray when we use the singular "plaintiff."