Chavez-Lavagnino v. Motivation Educ. Training, Inc.
| Decision Date | 25 August 2014 |
| Docket Number | No. 12–1058.,12–1058. |
| Citation | 767 F.3d 744 |
| Parties | Luisa CHAVEZ–LAVAGNINO and Debra Yanez, Plaintiffs–Appellees, v. MOTIVATION EDUCATION TRAINING, INC., and Amy Cerna, also known as Amy Cerna–Espinoza, Defendants–Appellants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Michael John Minenko, argued, Edina, MN (Keith C. Livesay, Harlingen, TX, on the brief), for appellant.
Brian Emery Cote, argued, Minneapolis, MN, for appellee.
Before RILEY, Chief Judge, COLLOTON and GRUENDER, Circuit Judges.
Luisa Chavez–Lavagnino and Debra Yanez alleged that their employer, Motivation Education Training, Inc. (“MET”), and their supervisor, Amy Cerna, terminated them in violation of Minnesota law for refusing to participate in MET's attempts to defraud the federal government. The case proceeded to trial, and the jury found in favor of Chavez–Lavagnino and Yanez (the “employees”), awarding them damages. MET and Cerna (the “defendants”) appeal from the district court's denial of their motion for judgment as a matter of law. We affirm in part, reverse in part, and vacate and remand in part.
Because we are reviewing the denial of the defendants' motion for judgment as a matter of law, we recite the facts in the light most favorable to the employees. MET is a non-profit corporation that provides services and training to migrant and seasonal farm workers. Much of MET's funding comes from federal grants distributed pursuant to the National Farmworker Jobs Program. Before MET may use Program funds to assist a farmworker, federal law requires MET to ensure that the worker satisfies certain eligibility requirements. See 29 U.S.C. § 2912. For example, a recipient must be in the country legally, he must work primarily in agriculture, and his income must not exceed a certain threshold. To confirm that a worker seeking benefits is eligible to receive them, MET requires the worker to complete an application and provide MET with certain documents. After MET assists a worker, it creates a so-called follow-up note on him. The follow-up note documents how the worker fared in the job market after receiving training or other services from MET. MET submits the information in the follow-up notes to the Department of Labor when it applies for renewal of its federal grants.
Chavez–Lavagnino began working at MET's office in Rochester, Minnesota, in September 2008. In December, Chavez–Lavagnino's supervisor, Cerna, ordered her to forge a worker's signature, because the worker failed to sign his application. Chavez–Lavagnino refused. She explained to Cerna that breaking the law could jeopardize her immigration status and cause her to lose custody of her daughter. Cerna responded, “I can see that you are not willing to go an extra mile for your job.” After that incident, Cerna treated Chavez–Lavagnino differently. Cerna began to ignore Chavez–Lavagnino's questions about the job, and she began verbally abusing Chavez–Lavagnino by calling her “stupid,” disparaging her physical appearance, and mocking her ability to speak English.
In January 2009, Cerna ordered Chavez–Lavagnino to begin forging follow-up notes. Cerna explained that forging the follow-up notes would allow MET to demonstrate that its clients were performing well and strengthen its next application for grant money. Chavez–Lavagnino complied until late March or early April. Chavez–Lavagnino then told Cerna she would no longer falsify the notes, because doing so was illegal. MET fired Chavez–Lavagnino on May 1, 2009.
Yanez began working at MET in June 2008. Yanez claims that during her time at MET, Cerna instructed her to forge signatures, shred tax forms, falsify follow-up notes, and register applicants whom Yanez knew to be in the country illegally. Initially, Yanez complied, and she forged signatures on roughly seventy-five applications so that the clients could receive Program funds. When Cerna next ordered Yanez to forge signatures, however, Yanez refused. Cerna responded: “You are not willing to go above and beyond the call of duty for your job.” Despite her refusal to forge signatures, Yanez shredded tax forms, falsified follow-up notes, and qualified applicants whom she knew to be ineligible until October 2008. In mid-October, Yanez told Cerna that she would no longer break the law. Cerna responded, “I guess you are not willing to go above and beyond the call of duty.” After that conversation, Cerna reassigned much of Yanez's work to other employees.
On Wednesday, December 10, 2008, Yanez went home from work early because she felt sick. The next morning, she received a voicemail from one of her coworkers, Maria Davila, advising Yanez that she was fired for abandoning her post. Davila testified that Cerna had instructed her to place the call and to tell Yanez that she was fired. Yanez went to the office to collect her belongings on Friday. While Yanez was packing, she spoke with Cerna on the phone. Cerna explained that her firing had been a mistake and told Yanez that she was welcome to resume her job. Yanez told Cerna she would think about the offer, but decided not to return to MET.
The employees initiated this action in Minnesota state court against MET and Cerna, alleging that the defendants fired them in retaliation for their refusals to follow Cerna's illegal orders, in violation of Minnesota's Whistleblower Act, Minn.Stat. § 181.932 subd. 1(3), and Minnesota common law. MET and Cerna removed the case to federal court on the basis of diversity jurisdiction. The district court dismissed the statutory claim against Cerna, but the statutory claim against MET and the common law claims against both defendants were tried to a jury.
The jury found in favor of the employees, awarding each employee the amount she sought in lost wages: $53,183.42 for Chavez–Lavagnino, and $35,241.67 for Yanez. After trial, the district court awarded the employees prejudgment interest and attorney's fees, and denied the defendants' motion for judgment as a matter of law. We remanded the case after the defendants' first attempt to appeal the judgment, because Cerna's citizenship was not clear from the record, so we could not determine whether the district court properly exercised jurisdiction under 28 U.S.C. § 1332. See Chavez–Lavagnino v. Motivation Educ. Training, Inc., 714 F.3d 1055 (8th Cir.2013). The parties supplemented the record in the district court, and it is now clear that diversity jurisdiction was proper. We review the district court's denial of a motion for judgment as a matter of law de novo, viewing the evidence in the light most favorable to the verdict. S. Wine & Spirits of Nev. v. Mountain Valley Spring Co., 646 F.3d 526, 533 (8th Cir.2011).
The defendants' principal argument on appeal is that the employees failed to prove a violation of either Minnesota's Whistleblower Act or the common law. The elements of the employees' statutory claims are similar but not identical to the elements of their common law claims. See Nelson v. Productive Alts., Inc., 715 N.W.2d 452, 455 n. 3 (Minn.2006) (). The statute provides that an employer “shall not discharge ... [or] otherwise discriminate against” an employee because “the employee refuses an employer's order to perform an action that the employee has an objective basis in fact to believe violates any state or federal law ... and the employee informs the employer that the order is being refused for that reason.” Minn.Stat. § 181.932, subd. 1(3). Under Minnesota common law, “an employee may bring an action for wrongful discharge if that employee is discharged for refusing to participate in an activity that the employee, in good faith, believes violates any state or federal law.” Nelson, 715 N.W.2d at 455 (internal quotation omitted).
The defendants first contend that the employees did not engage in protected conduct, because they failed to prove that Cerna's orders required them to break the law. Under the statute, the employees must have had an “objective basis in fact” to believe that the orders were illegal, Minn.Stat. § 181.932, subd. 1(3), and under the common law they must have held that belief “in good faith.” Nelson, 715 N.W.2d at 455.
The Minnesota Supreme Court has not interpreted the phrase “objective basis in fact” or elaborated on what “good faith” requires in the context of a common law claim for retaliatory discharge. The term “good faith” appears in the portion of the Act that protects employees who report illegal conduct. Minn.Stat. § 181.932, subd. 1(1). A report is protected where, assuming the facts reported by the employee are true, they would “constitute a violation of law.” Kratzer v. Welsh Cos., 771 N.W.2d 14, 22 (Minn.2009) (internal quotation omitted). We need not decide precisely what an “objective basis in fact” or “good faith” requires in this context, however, because the employees' claims pass muster under any plausible interpretation of those terms.
At trial, the employees testified that they refused Cerna's orders to forge signatures, shred tax forms, qualify ineligible workers, and falsify follow-up notes. The most natural inference from the evidence was that Cerna ordered the employees to take those actions so that MET could disburse Program funds to ineligible workers, falsely report to the government that MET was helping those workers succeed, and in turn receive more grant money when MET next applied. Such orders, if executed, would have violated 18 U.S.C. §§ 1001(a) and 1002, which prohibit making false representations to and defrauding the federal government. There was thus sufficient evidence to support the jury's conclusion that the employees refused to engage in illegal activity.
The defendants next argue that Yanez's discharge was not actionable under the Act or the common law, because Cerna offered...
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