Chandler v. Schlumberger

• Court: Court of Appeal of Michigan
• Writing for the Court: MARKMAN; SHELTON
• Citation: Chandler v. Schlumberger, 214 Mich.App. 111, 542 N.W.2d 310 (Mich. App. 1995)
• Decision Date: 24 October 1995
• Docket Number: No. 166009,166009
• Parties: , 131 Lab.Cas. P 58,036, 11 IER Cases 707 Joseph W. CHANDLER, Plaintiff-Appellant, v. Dowell SCHLUMBERGER, Incorporated, Defendant-Appellee.

Page 310

542 N.W.2d 310

214 Mich.App. 111, 131 Lab.Cas. P 58,036,

11 IER Cases 707

Joseph W. CHANDLER, Plaintiff-Appellant, v. Dowell SCHLUMBERGER, Incorporated, Defendant-Appellee.

No. 166009.

Court of Appeals of Michigan.

Submitted April 12, 1995, at Grand Rapids.

Decided Oct. 24, 1995, at 9:05 a.m.

Released for Publication Jan. 23, 1996.

R. Drummond Black, Midland, for plaintiff.

Riecker, Van Dam & Gannon, P.C. by Lynn S. Looby, Midland, for defendant.

Before GRIBBS, P.J., and MARKMAN and SHELTON, ^* JJ.

MARKMAN, Judge.

Plaintiff appeals from an opinion and order of the Midland Circuit Court granting summary disposition in favor of defendant. We affirm.

Plaintiff was employed by defendant beginning in June 1989. In January 1992, a new regulation went into effect requiring that defendant obtain certification for vehicles transporting hazardous materials on public roads. Plaintiff complained to defendant's agents regarding defendant's inconsistent compliance with the regulation. However, plaintiff did not report the violation to any public authority. On April 6, 1992, defendant was cited by the Michigan Department of Transportation for violating the regulation as a result of an anonymous tip. Shortly thereafter, defendant terminated plaintiff's employment.

On July 8, 1992, plaintiff filed a complaint alleging that defendant was liable under the Whistleblowers' Protection Act (WPA), M.C.L. § 15.361 et seq.; M.S.A. § 17.428(1) et seq. Defendant moved for summary disposition pursuant to MCR 2.116(C)(8) and (10), alleging that plaintiff had been dismissed because of economic necessity and that plaintiff could not recover under the WPA because he had not engaged in the protected activity of reporting or being about to report illegal conduct to a public authority. The trial court granted defendant's motion pursuant to MCR 2.116(C)(10), reasoning that because plaintiff had never reported a violation to a public authority, he had not engaged in protected activity and thus had failed to state a prima facie case under the WPA.

Plaintiff argues that the WPA protects an employee who has been discharged because of an erroneous perception that the employee has reported a violation of law, regulations, or rules to a public body. We disagree.

The starting point in every case involving construction of a statute is the language itself. House Speaker v. State Administrative Bd., 441 Mich. 547, 567, 495 N.W.2d 539 (1993). The WPA, at M.C.L. § 15.362; M.S.A. § 17.428(2), provides the following:

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.

This Court has stated that under the WPA a prima facie case of retaliatory discharge requires proof (1) that the plaintiff was engaged in protected activities as defined by the act, (2) that the plaintiff was subsequently discharged, and (3) that a causal connection existed between the protected activity and the discharge. Tyrna v. Adamo, Inc., 159 Mich.App. 592, 601, 407 N.W.2d 47 (1987). The issue in this case involves the first and third requirements. The plaintiff did not report, nor does he argue that he was about to report, his employer's violations to a public body. Thus, he was not "engaged in protected activities as defined by the act." Because he was not so engaged, there also exists a lack of a causal connection between the discharge and "the protected activity."

Plaintiff claims, however, that he is entitled to protection under the WPA as a "perceived whistleblower." In support of his claim, plaintiff points to Sanchez v. Lagoudakis, 440 Mich. 496, 486 N.W.2d 657 (1992), in which the Michigan Supreme Court held that the Michigan Handicappers' Civil Rights Act (MHCRA) prohibited employer discrimination based on erroneous perception of membership in a protected category. The MHCRA specifically provided a cause of action to employees who were subject to discrimination "because of a handicap." M.C.L. § 37.1202(1); M.S.A. § 3.550(202)(1); Sanchez, supra at 502, 486 N.W.2d 657. The Court held that the MHCRA covered those erroneously perceived of as having a handicap, reasoning:

The focus of the act was the basis of the employer's conduct--the employer's belief or intent--and not the employee's condition. If the employer acts on a belief that the employee has a handicap, and subsequently discharges or otherwise discriminates against the employee on the basis of that belief, it is inconsequential whether the employee actually has the handicap because, in either hypothesis, the employer has undertaken the kind of discriminatory action that the act prohibits.16

[Sanchez, supra at 502-503, 486 N.W.2d 657.]

Although not applicable to the case before it, the Supreme Court noted that in 1990, the Legislature amended the definition of "handicap" to include "[b]eing regarded as having" a handicap. Id. at 506, 486 N.W.2d 657.

Plaintiff urges this Court to follow the rule established in Sanchez to afford protection to perceived whistleblowers. Plaintiff further points to Polk v. Yellow Freight System, Inc., 801 F.2d 190 (C.A.6, 1986), in support of his claim. In Polk, the court concluded that a visit to the Michigan Civil Rights Commission was a protected activity under the Civil Rights Act, M.C.L. § 37.2101 et seq.; M.S.A. § 3.548(101) et seq. As the court noted, the act "prohibits discrimination or retaliation against a person 'because the person has opposed a violation of this act, or because the person has made a charge, filed a complaint, testified, assisted, or participated in an investigation, proceeding, or hearing under this act.' [M.C.L. § 37.2701(a); M.S.A. § 3.548(701)(a) ]. Id. at 197. The court, citing Gifford v. Atchison, T & SFR Co., 685 F.2d 1149, 1156, n 3 (C.A.9, 1982), found no legal distinction between filing a charge and threatening to file a charge. Id. at 200. The court then reasoned:

We see no reason to distinguish between a visit to a government agency to inquire about filing a charge and a threat to file a charge. In both instances, the focus is not on whether the employee intends to follow through with filing the charge, but rather on whether the employer's decision to discharge was motivated by an improper desire to retaliate against an employee for pursuing rights granted by the Act. [Polk, supra at 200.]

The issue whether the WPA affords protection to a perceived whistleblower has not been examined in Michigan. ¹ However, the issue of an employer's knowledge or belief under the WPA was addressed in Kaufman & Payton, P.C. v. Nikkila, 200 Mich.App. 250, 503 N.W.2d 728 (1993). In Kaufman & Payton, the counterplaintiff was employed by the law firm of Kaufman & Payton, P.C. Id. at 252, 503 N.W.2d 728. After becoming concerned with the legality of billing procedures that she had executed, she consulted outside counsel who subsequently sent letters to the firm questioning its billing practices and addressing the counterplaintiff's future duties. Id. at 252-253, 503 N.W.2d 728. The counterplaintiff subsequently resigned. Id. at 253, 503 N.W.2d 728. Thereafter, she sent a request for investigation to the Attorney Grievance Commission and followed up with a formal complaint. Id. The counterplaintiff later alleged in her countercomplaint against the employer that she had been constructively discharged in violation of the WPA. Id. at 253-254, 503 N.W.2d 728.

This Court found that the counterplaintiff's failure to produce evidence that the firm believed, before she resigned, that the counterplaintiff would report her complaints to responsible agencies was fatal to her cause of action under the WPA. Id. at 254-258, 503 N.W.2d 728. A majority of the panel explained:

An employer's subjective fear of retaliation will not substitute for some form of notice of threatened action. Instead, an employer is entitled to objective notice of a report or a threat to report by the whistleblower. Neither Kaufman's nor the firm's knowledge that Nikkila [the counterplaintiff] had retained counsel, together with other unspecified evidence, yields an inference that the firm believed before she resigned that she would report her complaints to responsible agencies. [Id. at 257-258, 503 N.W.2d 728. Emphasis in original.]

One could conceivably argue, under Kaufman & Payton, that plaintiff's dismissal, which may have been based on a "fear" or "perception" of whistleblowing, is not covered under the WPA. However, the problem with the counterplaintiff's case in Kaufman & Payton was the lack of a causal connection between the alleged constructive discharge and protected activity under the WPA due to the employer's apparent lack of belief or knowledge of any protected activity. In other words, if the employer did not believe or know of the employee's protected activity, it would be difficult to imagine how that could have been the basis for discharge. ²

In contrast, in the instant case, assuming plaintiff was discharged because of defendant's erroneous perception of whistleblowing by plaintiff, defendant had the belief or knowledge of whistleblowing. In fact, defendant in this case admitted that whistleblowing had taken place, the erroneous perception only being that the individual who engaged in the activity was the plaintiff. We recognize, of course, that a causal connection is nevertheless still lacking between the discharge and actual...