Cabinet for Families & Children v. Cummings

• Decision Date: 19 May 2005
• Docket Number: No. 2002-SC-0788-DG.,No. 2002-SC-0791-DG.,No. 2003-SC-0456-DG.,2002-SC-0788-DG.,2002-SC-0791-DG.,2003-SC-0456-DG.
• Citation: 163 S.W.3d 425
• Parties: CABINET FOR FAMILIES AND CHILDREN; Cary Willis; Sharon Perry; and Viola Miller, Secretary, Appellants, v. Dr. Scott CUMMINGS; Carol Garrison; and Nancy Martin, Appellees, and Dr. Carol Garrison; and Dr. Nancy Martin, Appellants, v. Dr. Scott Cummings; Cabinet for Families and Children; Cary Willis; Sharon Perry; and Viola Miller, Appellees, and Dr. Scott Cummings, Appellant, v. Dr. Carol Garrison; Cabinet for Families and Children; Cary Willis; Dr. Nancy Martin; Sharon Perry; and Viola Miller, Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 425

163 S.W.3d 425

CABINET FOR FAMILIES AND CHILDREN; Cary Willis; Sharon Perry; and Viola Miller, Secretary, Appellants, v. Dr. Scott CUMMINGS; Carol Garrison; and Nancy Martin, Appellees, and Dr. Carol Garrison; and Dr. Nancy Martin, Appellants, v. Dr. Scott Cummings; Cabinet for Families and Children; Cary Willis; Sharon Perry; and Viola Miller, Appellees, and Dr. Scott Cummings, Appellant, v. Dr. Carol Garrison; Cabinet for Families and Children; Cary Willis; Dr. Nancy Martin; Sharon Perry; and Viola Miller, Appellees.

No. 2002-SC-0788-DG.

No. 2002-SC-0791-DG.

No. 2003-SC-0456-DG.

Supreme Court of Kentucky.

May 19, 2005.

Jonathan Goldberg, Goldberg & Simpson, PSC, Jan M. West, Goldberg & Simpson, PSC, Louisville, Katherine A. Kingren, Cabinet for Families and Children, Office of the General Counsel, Nora K. McCormick, Cabinet for Families and Children, Frankfort, Counsel for Cabinet for Families and Children; Cary Willis; Sharon Perry; and Viola Miller, Secretary.

Priscilla S. Diamond, Louisville, Counsel for Dr. Scott Cummings.

David A. Friedman, National City Tower, Louisville, William B. Pettus, Assistant Attorney General, Civil and Environmental Law, Frankfort, Donna King Perry, Woodward, Hobson & Hobson, Elizabeth N. Monohan, Louisville, Counsel for Dr. Carol Garrison and Dr. Nancy Martin.

OPINION OF THE COURT

In 1999, Dr. Scott Cummings ("Cummings") filed suit against the Cabinet for employees of the Cabinet, Viola Miller, Sharon Perry and Cary Willis, as well as the University of Louisville ("the University"), and individual University employees, Dr. Garrison and Dr. Martin for violations of the Kentucky Whistleblower Act ("the Act"). The Jefferson County Circuit Court granted summary judgment to all defendants except the University, finding that (1) Cummings was not an employee of the Cabinet, and (2) the Act did not create a cause of action for individual liability. Cummings appealed to the Court of Appeals, which reversed the trial court's dismissal of the underlying charges. We accepted discretionary review of all three cases and hereby affirm in part and reverse in part the decision of the Court of Appeals.

FACTS

Prior to September 1999, Cummings was a tenured professor at the University. In addition, he was Director of the Center for Policy Research and Evaluation for the Urban Studies Institute ("the Institute") at the University. As such, he and another colleague sought to secure a grant for the study of welfare reform across the state by submitting a proposal titled "A Plan to Evaluate the Implementation and Impact of Welfare Reform in Kentucky" ("the Proposal") to the Cabinet. Soon thereafter, the Cabinet and the University's Institute entered into a Program Administration Contract ("the Contract"), which allotted approximately $500,000 annually to the Institute to create a database from which panel studies could be conducted in order to evaluate the impact of welfare reform in Kentucky. The Contract specifically incorporated Cummings's Proposal into the agreement, although Cummings himself did not sign the Contract.

Pursuant to the Contract, the Institute agreed to conduct panel studies, work in conjunction with the Cabinet to create appropriate indicators, submit invoices for requested payments at the end of each month, and provide information to the Cabinet upon request. The Institute was required to meet certain benchmarks for delivering reports (i.e., conduct phone surveys, provide preliminary findings, submit a project summary report, and provide the Cabinet with a bi-monthly narrative status report) unless otherwise approved by the Cabinet. Conversely, the Cabinet was to provide all requested information, and provide consultation and technical assistance ("defining the requirements, analysis, detail specifications, coding, testing, debugging and implementation") to the Institute. The Cabinet was to also monitor all activities pursuant to the agreement. The Contract stated that the Cabinet disclaimed all liability for Social Security contributions relating to the compensation of the Institute.

In exchange for Cummings's work on the study, the Cabinet reimbursed the University one-third of Cummings's salary and fringe benefits during the fall and spring semesters and paid Cummings's full salary and fringe benefits during the summer. Cummings's teaching load at the University was reduced proportionately.

Cummings alleges that he was removed from his position on the study because he intended to disclose at a scheduled hearing before the Legislative Research Committee ("LRC") that welfare reform in Kentucky had a disparate impact upon African-American and Appalachian families. Cummings alleges that the Cabinet cancelled his appearance before the LRC and that the University, at the direction of the Cabinet, removed him from the study.

STANDARD OF REVIEW

"The standard of review on appeal of a summary judgment is whether the circuit judge correctly found that there were no issues as to any material fact and that the moving party was entitled to a judgment as a matter of law." Pearson ex rel. Trent v. Nat'l Feeding Systems, Inc., 90 S.W.3d 46, 49 (Ky.2002). Summary judgment is only proper when it would be impossible for the plaintiff to produce any evidence at trial warranting a judgment in his favor. Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky.1991). In ruling on a motion for summary judgment, the court is required to construe the record in a light most favorable to the party opposing the motion. Id. The proper question then becomes whether the trial court properly held as a matter of law (1) that Cummings was not an employee of the Cabinet, and (2) that the individual employees of the Cabinet and University were not liable under the Act.

EMPLOYER/EMPLOYEE RELATIONSHIP

The Cabinet argues that Cummings was not an "employee" of the Cabinet. KRS 61.101(1) defines "employee" as follows:

(1) "Employee" means a person in the service of the Commonwealth of the Kentucky, or any of its political subdivisions, who is under contract of hire, express or implied, oral or written, where the Commonwealth, or any of its political subdivisions, has the power or right to control and direct the material details of work performance[.]

KRS 61.102 prohibits employers from subjecting public employees to reprisal for reporting information relating to the employer's violation of the law, alleged fraud, or abuse, etc. It is undisputed that the Cabinet is an "employer" under the Act, as it is a political subdivision of the Commonwealth. See KRS 61.101(2). However, the Cabinet alleges, and the trial court agreed, that since Cummings was not a party to the Contract between the University's Institute and the Cabinet, he was not an "employee" of the Cabinet for purposes of the Act.

The Cabinet directs us to Stewart v. University of Louisville, 65 S.W.3d 536 (Ky.App.2001), for guidance. In Stewart, the Court of Appeals found that a graduate student and recipient of a Regent's Fellowship, which provided for a yearly stipend for study, was not an "employee" of the University for purposes of Kentucky's discrimination statute (KRS 344.030) and KRS 61.102. The court held that although the graduate student received regular checks from the University, was required to submit reports to the University, and was not allowed to accept outside employment without the University's permission, the reality of the underlying relationship was not that of employer-employee. Id. at 539-540. Although suit was brought pursuant to KRS 61.102, as well as KRS 344.030, the Court of Appeals's analysis seemed to rely primarily on principles relating to KRS 344.030 and Title VII. Id. at 539 ("In determining whether an individual will be deemed an `employee' for Title VII purposes, `one must examine the economic realities underlying the relationship between the individual and the so-called principal in an effort to determine whether that individual is likely to be susceptible to the discriminatory practices which the act was designed to eliminate."' (quoting Armbruster v. Quinn, 711 F.2d 1332, 1340 (6th Cir. 1983))). Nonetheless, Stewart is easily distinguishable from the current situation. The court there found that the majority of the graduate student's duties were in furtherance of her academic work, rather than in performance of services for the University; and therefore, the "economic realities" of the situation dictated that she was not an employee of the University. Id. at 540. In the current case, Cummings's duties and activities related to the study were clearly for the service of the Cabinet. In theory, the Cabinet was to use the findings of the study to present the LRC with an accurate picture of the effectiveness of the current welfare reform laws. In exchange for his work, the Cabinet paid a portion of Cummings's salary. The dynamics of the relationship in the case at bar are certainly different than those in Stewart, whose holding is best confined to its particular facts, and our holding today is not inconsistent with the opinion in that case.

The trial court based its decision that Cummings was not an employee of the Cabinet on the fact that the only contract governing the study was between the Cabinet and the University. The court stated that although "Dr. Cummings may have obtained the contract for the University with the tacit understanding that he would perform the contract," the fact remained that he was not a party to the contract. We do not agree however, that the Contract entered into between the Cabinet and the University's Institute is the only governing document of the arrangement. The language of the Contract specifically delineates that the Institute is to perform certain enumerated services for the Cabinet. Section 1. p. of the Contract states that the Institute is to "[p]erform all of the services identified in the Second Party's [Institute's] proposal dated October...