Dudewicz v. Norris-Schmid, Inc.

• Decision Date: 01 April 1993
• Docket Number: No. 3,INC,Docket No. 93029,NORRIS-SCHMI,RRIS-SCHMI,3
• Citation: 503 N.W.2d 645,443 Mich. 68
• Parties: , 126 Lab.Cas. P 57,563, 8 IER Cases 1158 Michael L. DUDEWICZ, Plaintiff-Appellee v., a Michigan corporation, Defendant-Appellant. Calendar,
• Court: Michigan Supreme Court

Page 645

503 N.W.2d 645

443 Mich. 68, 126 Lab.Cas. P 57,563,

8 IER Cases 1158

Michael L. DUDEWICZ, Plaintiff-Appellee v. NORRIS-SCHMID, INC., a Michigan corporation, Defendant-Appellant.

Docket No. 93029.

Calendar No. 3, April Term, 1993.

Supreme Court of Michigan.

Argued March 31, 1993.

Decided July 27, 1993.

[443 Mich. 69] Peter C. Jensen, Jensen, Smith & Gilbert, P.C., Saginaw, for plaintiff-appellee.

[443 Mich. 70] Robert A. Jarema, Smith, Bovill, Fisher, Meyer & Borchard, P.C., Saginaw, for defendant-appellant.

Mark Brewer, ACLU Fund of Michigan (Paul Denenfeld, Legal Director, of counsel), Detroit, for amicus curiae.

OPINION

BRICKLEY, Justice.

The issue before us is whether the Whistleblowers' Protection Act (WPA) ¹ prohibits an employer from discharging an employee who files a criminal complaint against a fellow employee for an assault that arose out of a dispute over the handling of the employer's business, during business hours, and at the site of employment. We are also asked to decide whether the public policy exception to the employment at will doctrine applies to the facts of this case. In a case of first impression for this Court, we find that the WPA applies and prohibits discharge under these facts. We also find that the WPA preempts any public policy claim arising out of the same facts. While summary disposition for the defendant on the public policy claim was proper, the trial court improperly granted a directed verdict for the defendant on the WPA claim. Therefore, the judgment for the directed verdict is reversed, and the case is remanded for trial of the WPA claim.

I

Plaintiff, Michael L. Dudewicz, worked as a parts manager for an automobile dealership, Norris-Schmid, Inc., defendant. On the morning of November 4, 1987, Dudewicz attempted to obtain warranty service for a customer who, as a wholesale buyer, did a lot of business with Norris- To get better service for the customer, Dudewicz enlisted the aid of one of the dealership's owners, Samuel Norris. Together, the two men sought the assistance of the service manager, Dick Boehm, who agreed to do the work for the customer under warranty.

After Norris left the service area, Dudewicz alleged that the service manager reached over the service counter and grabbed Dudewicz by the collar and tried to pull him across the counter. Dudewicz alleged that Boehm told him never to bring the owner into the service area again. During the course of this fracas, Dudewicz alleged that the service manager tore buttons off his shirt, broke a gold chain from around his neck, and left fingerprints on his neck. That same day, Dudewicz told Norris-Schmid's new car sales manager about the incident and also filed criminal charges with the Midland County Prosecutor, alleging assault and battery.

Dudewicz testified that upon entering work the morning of December 1, 1987, he was called to Norris' office and told to drop the criminal charges against the service manager or be fired. He was also told to leave the dealership. Dudewicz left the premises because he believed he had been fired; he also believed he could regain his job if he agreed to drop the criminal charges. Dudewicz then contacted an attorney who counseled him to return to work. When Dudewicz did return to the dealership on December 3, 1987, Norris told him the dealership considered him to have quit and that he had to leave the premises. Dudewicz argued that he had not quit, but had, in fact, been fired. Further, Dudewicz refused to leave unless provided with a letter of termination. Norris refused to comply with this request and called the police to escort Dudewicz from the premises.

Subsequently, Dudewicz filed a two-count complaint, alleging that his termination violated Michigan's Whistleblowers' Protection Act as well as public policy. Following discovery, Norris-Schmid sought and received summary disposition under MCR 2.116(C)(8), on the ground that the public policy argument failed to state a claim upon which relief could be granted. ² Then, after hearing proofs on the remaining count, Norris-Schmid sought and received a directed verdict, under MCR 2.515, on the ground that Dudewicz failed to show that it had violated the Whistleblowers' Protection Act. The trial court denied a motion to reconsider this verdict.

Dudewicz appealed as of right in the Court of Appeals, which reversed. 192 Mich.App. 247, 480 N.W.2d 612 (1991). The Court first addressed the public policy claim and found that Dudewicz had alleged an implied cause of action for retaliatory discharge because "the reason for a discharge was the employee's exercise of a right conferred by a well-established legislative enactment." Id. at 251, 480 N.W.2d 612, quoting Suchodolski v. Michigan Consolidated Gas Co., 412 Mich. 692, 696, 316 N.W.2d 710 (1982). On the basis of federal precedent, Pratt v. Brown Machine Co., 855 F.2d 1225 (CA 6, 1988), the Court was satisfied that the ability to file a criminal complaint as the victim of a crime was a right conferred by a "well-established legislative enactment." Therefore, Norris-Schmid's discharge violated a public policy that encouraged victims of crime to file complaints. Otherwise, the Court believed, "[t]o allow the discharge of an at-will employee because of a choice to file a criminal complaint against a fellow employee would force a choice between justice and livelihood. It is the public policy of this state to protect its citizens from such an onerous choice." 192 Mich.App. at 253, 480 N.W.2d 612.

The Court also noted that, as Norris-Schmid argued, Dudewicz might have had to choose the WPA as his exclusive remedy over his public policy claim. Because, however, the trial court "expressly stated that it had not granted the motion for summary disposition on the basis that the [WPA] provides the exclusive remedy," the Court ruled that "consideration of the applicability of the public policy exception to the facts of this case [was] still proper...." 192 Mich.App. at 253, 480 N.W.2d 612.

Next the Court considered Dudewicz' claim that his discharge was in violation of the WPA because he was fired for filing a criminal complaint, alleging that he had been assaulted and battered by a fellow employee. In ruling that the WPA prohibited such conduct, the Court expressly rejected an earlier Court of Appeals holding, Dickson v. Oakland Univ., 171 Mich.App. 68, 429 N.W.2d 640 (1988), that required, as an element of the applicability of the WPA, that the person accused of breaking the law be the employer. The Court found that the language of the act itself and the accompanying legislative analysis contained no such limitation and, in fact, indicated that violations by fellow employees, as well as by employers, were to be considered within the scope of the WPA. The Court therefore concluded that the trial judge erred in granting both a directed verdict and summary disposition for Norris-Schmid.

II

In deciding whether the trial court erred in directing a verdict for the defendant, we must first decide whether the WPA was intended to protect employees who are fired for reporting violations of the law by fellow employees. Norris-Schmid contends that the WPA protects only those employees who are fired for reporting their employers' violations of law. There is, however, no such limitation in either the express language of the WPA or the analysis of the House Bill that spawned the WPA.

Section 2 of the WPA provides in full:

An employer shall not discharge, threaten, or otherwise discriminate against an employee regarding the employee's compensation, terms, conditions, location, or privileges of employment because the employee, or a person acting on behalf of the employee, reports or is about to report, verbally or in writing, a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body, unless the employee knows that the report is false, or because an employee is requested by a public body to participate in an investigation, hearing, or inquiry held by that public body, or a court action. [M.C.L. § 15.362; M.S.A. § 17.428(2). ³

A plain reading of this provision reveals that protection is not limited to employee reports of violations by employers. On its face, the provision only seems to apply to the discharge of an employee who "reports ... a violation or a suspected violation of a law...." Id.

Moreover, the legislative analysis of the WPA supports the conclusion that its provisions protect employees who report violations of law by either their employers or fellow employees. The analysis recognizes the problem the WPA was designed to alleviate as the inability to combat corruption or criminally irresponsible behavior in the conduct of government or large businesses. House Legislative Analysis, HB 5088, 5089 (February 5, 1981). The analysis goes on to say that "[t]he people best placed to observe and report violations are the employees of government and business, but employees are naturally reluctant to inform on an employer or a colleague." Id. (emphasis added). It appears that, at the time the bill was considered, the Legislature intended the protection to apply to employee reports of any and all violations of law by either employers or fellow employees.

In any event, we find that the activity at issue here, reporting a fellow employee's violation of the state's Criminal Code because of a dispute over the handling of company business, is not so different from traditional notions of whistleblowing. Typically, the activity involves the violation of laws more closely connected with the employment setting, such as Health Code and safety violations, Tyrna v. Adamo, Inc., 159 Mich.App. 592, 407 N.W.2d 47 (1987), or illegal labor practices, Hopkins v. Midland, 158 Mich.App. 361, 404 N.W.2d 744 (1987), but there is no limitation in the statute to these types of...