Brigham v. Dillon Companies, Inc.

• Decision Date: 18 April 1997
• Docket Number: No. 74211,74211
• Citation: 935 P.2d 1054,262 Kan. 12
• Parties: , 12 IER Cases 1339 Steve BRIGHAM, Appellant, v. DILLON COMPANIES, INC., Appellee.
• Court: Kansas Supreme Court

Page 1054

935 P.2d 1054

262 Kan. 12, 12 IER Cases 1339

Steve BRIGHAM, Appellant, v. DILLON COMPANIES, INC., Appellee.

No. 74211.

Supreme Court of Kansas.

April 18, 1997.

Syllabus by the Court

1. The recognition of an action for the demotion of an employee in retaliation for exercising rights under the Workers Compensation Act is a logical and necessary extension of the tort of retaliatory discharge.

2. The tort of retaliatory demotion is recognized in Kansas.

Pamela G. Phalen, of Spigarelli, McLane & Short, Pittsburg, argued the cause, and Fred Spigarelli, of the same firm, was with her on the brief, for appellant.

Henry E. Couchman, Jr., of McAnany, Van Cleave & Phillips, P.A., Kansas City, argued the cause, and Douglas M. Greenwald and Frank D. Menghini, of the same firm, were with him on the brief, for appellee.

ALLEGRUCCI, Justice:

Steve Brigham sued his employer, Dillon Companies, Inc., (Dillons) alleging that he was wrongfully demoted in retaliation for claiming workers compensation benefits. Concluding that Kansas courts do not recognize a cause of action for wrongful demotion, the district court entered summary judgment in favor of Dillons. Brigham appealed, and the Court of Appeals affirmed. Brigham v. Dillon Companies, Inc., 22 Kan.App.2d 717, 921 P.2d 837 (1996). Brigham's petition for review was granted by this court on September 25, 1996.

Material facts are not in dispute. Brigham has been employed by Dillons in its grocery stores since 1980. He began as a part-time carry-out person in Dillons' grocery store in Joplin, Missouri. He transferred to the store in Pittsburg, Kansas, in 1983 to become a full-time shelf stocker. He became dairy manager of the Pittsburg store in 1985 and grocery manager in 1987.

Late in 1992, Brigham filed a claim for workers compensation for injuries and took time off from work to have surgery on his left arm. When he returned to work in February 1993, he was assigned to the position of frozen foods manager. The move from grocery manager to frozen foods manager was a demotion with a corresponding reduction in pay.

Brigham's amended petition contained two counts, one for the tort of retaliatory demotion and the other for breach of an implied employment contract. He waived his implied contract claim, and Dillons sought summary judgment on the ground that the courts of Kansas do not and will not recognize a cause of action for wrongful demotion. Dillons denied that Brigham's demotion was retaliatory and set out allegations in connection with its motion for summary judgment which, if shown, would establish lawful reasons for his demotion. Summary judgment, however, was not sought on that basis. The single issue considered by the district court, the Court of Appeals, and now this court is whether a cause of action for retaliatory demotion should be recognized.

This case is somewhat unusual in that it purports to be a summary judgment even though no matters outside the pleadings need to be considered. It is not uncommon for a motion to dismiss under K.S.A. 60-212(b)(6) to be treated as one for summary judgment and processed under K.S.A. 60-256, but it is less common for a motion challenging only the legal sufficiency of a claim to result in the entry of summary judgment. In this case, the district court actually treated Dillons' motion as a motion to dismiss, even though it used other labels. The district court accepted as true, for the purpose of deciding the motion, Brigham's allegations that he had been demoted in retaliation for exercising his rights under the Workers Compensation Act. Dillons' defense, based on its allegations that Brigham was demoted for good cause unrelated to his workers compensation claim, remains to be adjudicated if we recognize a cause of action for retaliatory demotion. On appeal, we must determine whether Brigham's "pleaded facts and inferences state a claim, not only on the theory which may be espoused by the plaintiffs, but on any possible theory we can divine." Noel v. Pizza Hut, Inc., 15 Kan.App.2d 225, 231, 805 P.2d 1244, rev. denied 248 Kan. 996 (1991).

The once impervious principle of employment-at-will "has been gradually eroded in Kansas and in other states." Ortega v. IBP, Inc., 255 Kan. 513, 516, 874 P.2d 1188 (1994). The erosion is a result of the appellate courts of this state recognizing exceptions where the employee is discharged "in contravention of public policy." 255 Kan. at 518, 874 P.2d 1188. Development of the exceptions was traced in Ortega. In Murphy v. City of Topeka, 6 Kan.App.2d 488, 630 P.2d 186 (1981), the Court of Appeals recognized the tort of retaliatory discharge in an action involving discharge of an employee in retaliation for filing a workers compensation claim. In Coleman v. Safeway Stores, Inc., 242 Kan. 804, 752 P.2d 645 (1988), this court prohibited an employer from firing an employee for being absent from work due to a work-related injury, even where the employee had not yet filed a workers compensation claim. In addition, in Coleman the court applied the tort of retaliatory discharge to employees covered by a collective bargaining agreement as well as to at-will employees. 242 Kan. 804, 752 P.2d 645, Syl. 4. This court's decision in Palmer v. Brown, 242 Kan. 893, 752 P.2d 685 (1988), recognized a cause of action for termination for whistle-blowing--the good faith reporting of serious infractions of rules, regulations, or the law pertaining to public health, safety, and welfare.

In the present case, the Court of Appeals observed that each of these cases "dealt with employee discharges" and that none involves employer action which falls short of termination. 22 Kan.App.2d at 720, 921 P.2d 837. It viewed Kansas Supreme Court decisions as restricting public policy exceptions to the employment-at-will doctrine to terminations, either for filing a workers compensation claim or for whistle-blowing, and as lacking any suggestion that termination is not an essential element of an actionable claim. Declaring itself to be "duty bound to follow the law as established by our Supreme Court decisions, absent some indication that the Supreme Court is departing from its previously expressed position," 22 Kan.App.2d at 719, 921 P.2d 837, the Court of Appeals rejected Brigham's argument that the tort of retaliatory discharge logically and necessarily encompasses retaliatory demotion. The Court of Appeals found no merit in Brigham's contention that the public policy rationale for previous cases, in particular Murphy, requires that employees be protected from coercive conduct by employers, even if that conduct falls short of termination. It concluded its opinion on a strong cautionary note by quoting a federal court's warning of open floodgates, unforeseen and unwarranted results, and difficulty in drawing the line:

" 'Recognizing a retaliation tort for actions short of termination could subject employers to torrents of unwarranted and vexatious suits filed by disgruntled employees at every juncture in the employment process. And why stop at demotions? If, as [the plaintiff] argues, a demotion raises the same policy concerns as a termination, so too would transfers, alterations in job duties, and perhaps even disciplinary proceedings. The potential for expansion of this type of litigation is enormous.' Ludwig v. C & A Wallcoverings, Inc., 960 F.2d 40, 43 (7th Cir.1992)...." 22 Kan.App.2d at 720, 921 P.2d 837.

Since the federal court predicted in Ludwig v. C & A Wallcoverings, Inc., 960 F.2d 40, 43 (7th Cir.1992), that Illinois state courts would not recognize a cause of action for retaliatory demotion, the Illinois Supreme Court has fulfilled the prophecy. Zimmerman v. Buchheit of Sparta, 164 Ill.2d 29, 206 Ill.Dec. 625, 645 N.E.2d 877 (1994), reh. denied January 30, 1995. The Illinois plaintiff, Linda Zimmerman, was an at-will employee who sued her employer for demoting and discriminating against her for asserting her rights under the workers compensation act. The trial court granted her employer's motion to dismiss for failure to state a cause of action, and the Illinois Appellate Court reversed and remanded. Zimmerman v. Buchheit of Sparta, Inc., 245 Ill.App.3d 679, 185 Ill.Dec. 921, 615 N.E.2d 791 (1993). Zimmerman built her argument on Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978), in which the Illinois court recognized a cause of action for retaliatory discharge, thus creating a limitation on an employer's license to discharge employees for any reason or no reason. Zimmerman argued that the "essential doctrine" of Kelsay could not be implemented without " 'some comparable doctrine, to protect employees from other distinct measures of retaliation, short of an actual discharge.' " 164 Ill.2d [262 Kan. 16] at 32, 206 Ill.Dec. 625, 645 N.E.2d 877. The Supreme Court viewed the "essential doctrine" of Kelsay in the following light:

"Without a remedy for retaliatory discharge, employees would be placed in the position of 'choosing between their jobs and seeking their remedies under the [Workers' Compensation] Act.' (Kelsay, 74 Ill.2d at 184, 23 Ill.Dec. 559, 384 N.E.2d 353.) Therefore, to uphold and implement the fundamental purpose and public policy behind the Act, the Kelsay court determined it was necessary to recognize a cause of action for retaliatory discharge. Kelsay, 74 Ill.2d at 181, 23 Ill.Dec. 559, 384 N.E.2d 353." 164 Ill.2d at 33, 206 Ill.Dec. 625, 645 N.E.2d 877.

The intermediate court had concluded that § 4(h) of the Illinois Workers' Compensation Act prohibited the activities alleged by Zimmerman--that she had been demoted because she asserted her rights under the workers compensation statute. Zimmerman, 245 Ill.App.3d at 683, 185 Ill.Dec. 921, 615 N.E.2d 791. The intermediate court stated:

"Plaintiff has suffered a loss of income and employment, but not a termination of her employment. We see little difference between retaliation by loss of employment...