Anderson-Johanningmeier v. MMWC, C0-00-164.

• Citation: 637 N.W.2d 270
• Decision Date: 03 January 2002
• Docket Number: No. C0-00-164.,C0-00-164.
• Parties: Marguerite ANDERSON-JOHANNINGMEIER, et al., Petitioners, Appellants, v. MID-MINNESOTA WOMEN'S CENTER, INC., et al., Respondents.
• Court: Supreme Court of Minnesota (US)

637 N.W.2d 270

Marguerite ANDERSON-JOHANNINGMEIER, et al., Petitioners, Appellants, v. MID-MINNESOTA WOMEN'S CENTER, INC., et al., Respondents.

No. C0-00-164.

Supreme Court of Minnesota.

January 3, 2002.

Judith K. Schermer, Schermer & Guy, PLLP, Minneapolis, for appellants.

Kay Nord Hunt, Stephen C. Rathke, Lommen, Nelson, Cole & Stageberg, PA, Minneapolis, for respondents.

Douglas A. Hedin, Hedin & Goldberg, PA, Minneapolis, for amicus curiae Nat. Employment Lawyers Ass'n.

Heard, considered, and decided by the court en banc.

OPINION

LANCASTER, Justice.

The issue before us is one of statutory construction. After appellants were fired, they alleged a violation of the whistleblower statute, Minn.Stat. § 181.932, subd. 1(a) (1996), based on their questioning whether another employee was entitled to vacation pay under the wage and hour laws. After a jury trial, the district court granted judgment notwithstanding the verdict to respondents because the vacation pay practices in this case affected only respondents' employees and thus did not implicate public policy. The court of appeals affirmed, holding that appellants had not demonstrated that their report implicated public policy. Anderson-Johanningmeier v. Mid-Minnesota Women's Ctr., Inc., No. C0-00-164, 2000 WL 1869555, at *1 (Minn. App. Dec. 26, 2000). We must determine whether the protections of the whistleblower statute extend only to employees whose reports of a violation or suspected violation of law implicate public policy. We hold that the whistleblower statute is not so limited and reverse.

Mid-Minnesota Women's Center (MMWC) is a shelter for abused women and their children located in Brainerd, Minnesota.¹ Respondent Louise Seliski has served as MMWC's executive director since 1978. Appellant Kathy Delaney was assistant director and appellant Barb Morrell served as secretary/bookkeeper and administrative assistant. Morrell reported to Delaney. Delaney reported to Seliski. Seliski reported to MMWC's Board of Directors.

In 1995, Delaney approved a request for vacation time submitted by MMWC women's advocate Jennifer Cline. On June 23, 1995, after the approval, Cline submitted her resignation. Cline then took the approved vacation time but returned to work at MMWC for a few days before her employment ended.

On July 10, 1995, while reviewing records to approve the payroll, Seliski questioned Morrell about Cline's vacation pay, conveying to Morrell that Seliski believed that Cline was not entitled to the vacation pay under MMWC policy. Seliski told Morrell not to pay Cline's vacation time. Morrell responded that she did not believe that the MMWC policy barred payment of Cline's vacation time.

After the conversation with Seliski, Morrell told Delaney that Seliski expected Morrell to participate in an illegal activity to keep her job. Morrell decided to call the Minnesota Department of Labor and Industry because "[she] didn't know what law was being broken but [she] really felt that this—this couldn't possibly be legal not to pay something because the policy simply didn't address the issue at all." Delaney supported Morrell's decision to call the labor department. In the telephone call to the labor department, Morrell gave her name, MMWC's name and location, Seliski's name, the circumstances regarding Cline's vacation pay, and the MMWC policy Seliski cited as reason to refuse Cline's vacation pay. The labor department employee said that MMWC needed to pay Cline and that if MMWC did not pay her, Cline would win if she sought compensation for the vacation time.

Still on July 10, 1995, Morrell told Seliski that she had called the labor department and that MMWC had to pay Cline. Seliski responded that MMWC policy did not allow her to authorize payment to Cline, but said that she would seek authorization from MMWC's board to do so.

On July 11, 1995, Delaney met with Seliski and told Seliski that it was illegal not to pay Cline. Seliski responded that she did not have the authority to pay Cline's vacation time. After Delaney and Seliski met, Seliski asked Morrell why Delaney was involved in the issue of Cline's vacation pay. Seliski suggested that Morrell and Delaney were "trashing" her,² and told Morrell not to call the labor department again without consulting her.

After the conversations with Seliski on July 10 and 11, 1995, Morrell and Delaney claimed that their employment conditions changed for the worse. Morrell described the work atmosphere as "very hostile."

In November 1995, Seliski discussed restructuring the MMWC staff. She talked about using restructuring to terminate employees and told a staff member that she was going to terminate the troublemakers in the course of the staff reorganization. Concerned about the atmosphere at MMWC, Morrell submitted a letter to Seliski on December 1, 1995, in which Morrell complained about several issues, among them the events surrounding Cline's vacation pay. Delaney also submitted a letter to Seliski on December 1, 1995, in which Delaney complained about Seliski.

On December 4, 1995, the MMWC board met and eliminated the positions held by Morrell and Delaney. Less than one year later, six former employees of MMWC, including Morrell and Delaney, filed a complaint against MMWC and Seliski alleging negligent retention, negligent supervision, violation of the whistleblower statute, violation of the Minnesota Human Rights Act (MHRA), interference with contractual relations, and denial of benefits in violation of the federal Employee Retirement Income Security Act. Some counts were asserted by all six former employees; the remaining counts were asserted by subsets of them. On September 30, 1998, the district court granted in part and denied in part defendants' motion for summary judgment. Morrell's whistleblower claim and a subset of the MHRA claims³ survived.

In October 1998, on the first day of trial of the whistleblower claim, the district court determined that Delaney was also a plaintiff.⁴ At the close of evidence, the jury was asked to decide whether Morrell or Delaney "in good faith, report[ed] a violation or a suspected violation of a law or rule governing the payment of vacation pay to her employer or to * * * the Minnesota Department of Labor," and whether the report was a motivating factor in MMWC's or Seliski's decisions to terminate their employment. The jury returned a special verdict finding that Morrell and Delaney each made such a report, but that the reports were not a motivating factor in MMWC's decisions to terminate them. The jury found the reports were, however, a motivating factor in Seliski's decisions to terminate them. The jury awarded $55,000 to Morrell and $33,000 to Delaney for lost earnings and embarrassment and emotional distress. Respondents moved for judgment notwithstanding the verdict on the grounds that: (1) no law governs vacation pay; (2) appellants' reports did not implicate public policy; (3) Delaney did not make a report; (4) Seliski is not an employer; and (5) no causal connection existed between the controversy surrounding Cline's vacation pay and the decisions to terminate appellants. The district court entered judgment notwithstanding the verdict, citing Donahue v. Schwegman, Lundberg, Woessner & Kluth, P.A., 586 N.W.2d 811 (Minn.App.1998),rev. denied (Minn. Feb. 18, 1999):

Like the payroll practices in Donahue the vacation pay practices in this case only affect the employees of the entities involved in the case. Under the standards enunciated in Donahue such internal practices, even if illegal, do not implicate public policy and as a matter of law Plaintiff[s'] whistleblower[] claims must fail.

The district court did not address respondents' alternative grounds for judgment notwithstanding the verdict. The court of appeals affirmed on the basis that appellants did not demonstrate that their reports implicated public policy. Anderson-Johanningmeier, 2000 WL 1869555, at *1. In other words, the court of appeals found that the whistleblower statute's prohibition of adverse employment actions in response to an employee's report of a violation of law applies only when the employee's report implicates public policy.

A district court's grant of judgment notwithstanding the verdict "is a question of law subject to de novo review." Diesen v. Hessburg, 455 N.W.2d 446, 449 (Minn.1990). Statutory construction is also a question of law subject to de novo review. Wilson v. Comm'r of Revenue, 619 N.W.2d 194, 197-98 (Minn.2000).

Respondents maintain that the whistleblower statute contains a public policy requirement, reading the statute in harmony with the public policy exception to the employment at-will doctrine. Traditionally, an "employer-employee relationship is terminable at the will of either; the employer can summarily dismiss the employee, the employee is under no obligation to remain at the job." Cederstrand v. Lutheran Bhd., 263 Minn. 520, 532, 117 N.W.2d 213, 221 (1962). Under the employment at-will doctrine, an employer can discharge an employee for any reason or for no reason. Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn.1983). The court of appeals recognized an exception to the employment at-will doctrine when an employer discharges an employee for reasons that contravene a clear mandate of public policy. Phipps v. Clark Oil & Ref. Corp., 396 N.W.2d 588, 592 (Minn.App.1986), aff'd, 408 N.W.2d 569 (Minn.1987). We granted the petition for review of Phipps, but in the interval between oral argument and the release of our opinion, the legislature enacted the whistleblower statute. Phipps, 408 N.W.2d at 571. We, therefore, did not resolve whether Minnesota should join the majority of states that had recognized a cause of action for wrongful discharge. Id. We agreed, however, that the common law protects those fired for their refusal to violate the law. Id. Thus, respondents argue that recognition of a public policy requirement in the...