Berrington v. Wal–Mart Stores, Inc.

• Citation: 696 F.3d 604
• Decision Date: 30 August 2012
• Docket Number: No. 11–1988.,11–1988.
• Parties: William BERRINGTON, Plaintiff–Appellant, v. WAL–MART STORES, INC., Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

696 F.3d 604

William BERRINGTON, Plaintiff–Appellant,

v.WAL–MART STORES, INC., Defendant–Appellee.

No. 11–1988.

United States Court of Appeals,Sixth Circuit.

Aug. 30, 2012.

ON BRIEF:William F. Piper, William F. Piper, PLC, Portage, Michigan, for Appellant. Michael P. Palmer, Barnes & Thornburg LLP, South Bend, Indiana, Kelly A. Petrocelli, Barnes & Thornburg LLP, Grand Rapids, Michigan, for Appellee.

Before: ROGERS and KETHLEDGE, Circuit Judges; MARBLEY, District Judge.^*

OPINION

ALGENON L. MARBLEY, District Judge.

Plaintiff–Appellant William Berrington alleges that Defendant–Appellee Wal–Mart Stores, Inc. (“Wal–Mart”) wrongfully refused to rehire him because he filed for unemployment benefits. The district court dismissed Berrington's lawsuit pursuant to Federal Rule of Civil Procedure 12(b)(6), finding no basis to hold that Michigan courts would recognize Berrington's cause of action. Berrington appeals, arguing that the district court erred by ruling that his Complaint fails to state a public policy cause of action under Michigan law for an employer's refusal to hire or rehire an individual in retaliation against that person for filing for unemployment benefits. In the alternative, Berrington claims the district court should have certified the issue to the Michigan Supreme Court. We affirm the district court.

I. BACKGROUND

In November 2003, Berrington began working for Wal–Mart in its West Main Street store located in Kalamazoo County, Michigan. During his employ, Berrington took a number of approved leaves of absence. On February 22, 2007, Berrington began a leave of absence that was approved through April 30, 2007. Berrington, however, did not return to work after April 30. Berrington claims that because of the leave of absence time he had accumulated, and because of conversations he had with Wal–Mart managers, he did not believe he needed to update or extend his leave of absence that ended on April 30, 2007.

In mid-May, a personnel manager contacted Berrington and told him to update his leave of absence paperwork, which Berrington did. Three days after Berrington updated his leave of absence paperwork, however, Berrington was summoned to the store and informed that based on store policy, he would be terminated for not returning to work at the end of his leave of absence. Berrington was told by Wal–Mart that he could be rehired after ninety days.

Berrington applied for unemployment benefits with the State of Michigan, with the understanding that he had been involuntarily terminated. Wal–Mart opposed Berrington's request for unemployment benefits on the basis that Berrington had quit his job of his own volition. Wal–Mart's termination documents indicated that Berrington voluntarily terminated his employment by failing to return from a leave of absence. The paperwork also recommended rehiring Berrington. While the dispute over unemployment benefits was ongoing, ninety days passed and Berrington reapplied for employment with Wal–Mart. Wal–Mart did not offer Berrington a position. After another ninety days passed, Berrington reapplied a second time for a position at the same West Main Street Wal–Mart store, again without success. Since August 2007, the Wal–Mart store on West Main Street has hired a number of employees to positions for which Berrington is qualified. Berrington contends Wal–Mart refused to hire him because he filed for unemployment benefits, which he eventually received.

On March 31, 2010, Berrington filed his Complaint against Wal–Mart in the Ninth Circuit Court in Kalamazoo County, Michigan, alleging the above facts. The Complaint contains a single cause of action, claiming Wal–Mart violated Michigan public policy by refusing to rehire him because he filed for unemployment benefits. On May 3, 2010, Wal–Mart removed the action to federal court based on diversity jurisdiction under 28 U.S.C. § 1332, and subsequently moved to dismiss Berrington's Complaint. On July 28, 2011, the district court rendered an opinion and order granting Wal–Mart's motion to dismiss, concluding that since “[n]either the Michigan Supreme Court nor the Michigan Court of Appeals have indicated any willingness to expand the wrongful termination public policy exception to the employment-at-will presumption to the hiring or rehiring context ... this Court has no basis to find that Michigan state courts would recognize Berrington's cause of action.” Berrington v. Wal–Mart Stores, Inc., 799 F.Supp.2d 772, 777 (W.D.Mich.2011). The district court entered judgment in favor of Wal–Mart. This appeal followed.

II. LAW AND ANALYSIS

A. Standard of Review

We review de novo a district court's decision to grant or deny a motion to dismiss under Rule 12(b)(6) for failure to state a claim, using the same standards employed by the district court. Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir.2010). When considering a motion to dismiss, we must accept as true any well-pleaded factual allegations in the plaintiff's complaint, see JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir.2007), but we need not accept any legal conclusions or unwarranted factual inferences. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Additionally, the Supreme Court has held that we should review de novo a district court's interpretation of state law in diversity cases. See Salve Regina Coll. v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991); see also Andrews v. Columbia Gas Transmission Corp., 544 F.3d 618, 624 (6th Cir.2008).

B. Berrington's Wrongful Failure to Rehire Claim

Berrington's appeal presents us with the question of whether Michigan law recognizes a public policy cause of action for an employer's wrongful refusal to rehire because an individual claimed unemployment benefits. In this action arising under federal diversity jurisdiction, we apply the substantive law of Michigan, as the forum state. CenTra, Inc. v. Estrin, 538 F.3d 402, 409 (6th Cir.2008). Faithful application of a state's law requires federal courts to “anticipate how the relevant state's highest court would rule in the case,” and in doing so we are “bound by controlling decisions of that court.” In re Dow Corning Corp., 419 F.3d 543, 549 (6th Cir.2005). Where the Michigan Supreme Court has not addressed the issue presented, “we must predict how the court would rule by looking to all the available data,” Allstate Ins. Co. v. Thrifty Rent–A–Car Sys. Inc., 249 F.3d 450, 454 (6th Cir.2001); however, decisions by “the Michigan Court of Appeals are binding authority where the Michigan Supreme Court has never addressed the issue decided therein.” Morrison v. B. Braun Med. Inc., 663 F.3d 251, 257 n. 1 (6th Cir.2011). Federal courts should be “extremely cautious about adopting ‘substantive innovation’ in state law.” Combs v. Int'l Ins. Co., 354 F.3d 568, 578 (6th Cir.2004) (citation omitted).

Berrington admits that the Michigan Supreme Court has not ruled on whether an employer's refusal to hire or re-hire an individual in retaliation against a person because he filed for unemployment benefits states a private cause of action under Michigan law. Berrington insists, however, that the Michigan Supreme Court “would not hesitate” to recognize such a claim in order to vindicate the state legislature's established public policy of encouraging dismissed workers to file for unemployment benefits, set forth in the Michigan Employment Security Act (“MESA”), Mich. Comp. Laws § 421.1 et seq.¹ Wal–Mart defends the district court's dismissal of Berrington's claim on two bases: Berrington's failure to rehire claim is not based on a recognized public policy; and, even if such a public policy exists, Berrington's request for this Court to create a new tort of wrongful failure to rehire in violation of public policy lacks any support in authority.

The employment relationship between Berrington and Wal–Mart was employment at will. Michigan's general rule regarding termination of an at-will employee is that either party may terminate the employment contract at any time for any or no reason. See Suchodolski v. Mich. Consol. Gas Co., 412 Mich. 692, 316 N.W.2d 710, 711 (1982) (per curiam). Michigan courts, however, “recognize an exception to this rule when the grounds for termination violate public policy.” Morrison, 663 F.3d at 256 (citing Suchodolski, 316 N.W.2d at 711). Public policy proscriptions against terminating an at-will employee are found most often in one of three situations: “(1) ‘adverse treatment of employees who act in accordance with a statutory right or duty,’ (2) an employee's ‘failure or refusal to violate a law in the course of employment,’ or (3) an ‘employee's exercise of a right conferred by a well established legislative enactment.’ ” Kimmelman v. Heather Downs Mgt. Ltd., 278 Mich.App. 569, 753 N.W.2d 265, 268 (2008) (quoting Suchodolski, 316 N.W.2d at 711–12).

Berrington argues his claim for wrongful failure to rehire is cognizable as a violation of Michigan's public policy under Suchodolski's third category, to prohibit retaliation against employees “for exercising a right conferred by a well-established legislative enactment.” See Suchodolski, 316 N.W.2d at 712. Berrington claims the Michigan Legislature has expressly declared a strong public policy for providing unemployment benefits to deserving individuals; ² and, further, the district court of the Eastern District of Michigan has recognized an anti-retaliation claim in the unemployment benefits context pursuant to that public policy. See Stencel v. Augat Wiring Systems, 173 F.Supp.2d 669, 679 (E.D.Mich.2001).

In Stencel, the Eastern District of Michigan acknowledged the plaintiff's Michigan law public policy claim of retaliatory discharge for filing unemployment benefits. See id. (stating, “[plaintiff's] claim would fall under the third [Suchodolski ] type of public policy case,” but ultimately dismissing plaintiff's claim for failure to show...