Dillard Dept. Stores, Inc. v. Beckwith

• Decision Date: 13 December 1999
• Docket Number: No. 31378.,31378.
• Citation: 115 Nev. 372,989 P.2d 882
• Parties: DILLARD DEPARTMENT STORES, INC., A Delaware Corporation; and Dillard's Nevada, Inc., A Nevada Corporation, Appellants, v. Deloris BECKWITH, Respondent.
• Court: Nevada Supreme Court

989 P.2d 882

115 Nev. 372

DILLARD DEPARTMENT STORES, INC., A Delaware Corporation; and Dillard's Nevada, Inc., A Nevada Corporation, Appellants, v. Deloris BECKWITH, Respondent.

No. 31378.

Supreme Court of Nevada.

December 13, 1999.

Rehearing Denied February 22, 2000.

John Peter Lee, Ltd., Barney C. Ales and Paul C. Ray, Las Vegas, for Appellants.

Donald J. Campbell & Associates and J. Colby Williams, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

LEAVITT, J.

Deloris Beckwith, sixty-four years of age, was a twenty-five-year employee of Dillard Department Stores (Dillard) and an area sales manager for nineteen years. She injured her back at work and filed a workers' compensation claim. Dillard is a self-insured employer. Beckwith was asked to return to work, but her doctor refused to release her because of her condition. When Beckwith failed to return to work, Dillard filled her job with another manager. Upon her return, Beckwith was demoted to an entry-level sales position with a forty-percent reduction in salary and benefits. She resigned and commenced this action.

FACTS

Beckwith was an exemplary employee of Dillard who had never received an annual review rating of less than "satisfactory" and most of her reviews rated her "very good" or "outstanding." Her salary was $41,000 per year, and she enjoyed a benefit package that included medical coverage and a retirement plan.

Beckwith strained her back at work while attempting to move a large mahogany table. Her injuries rendered her unable to walk upright or without assistance. A doctor recommended by Dillard certified her as temporarily disabled secondary to acute lumbosacral strain. Another doctor referred by Dillard agreed. The store manager requested that Beckwith return to work prior to her release from the doctor, even though the manager knew she had not been released. Beckwith failed to return to work when requested, and another person was given her position. The store manager later informed her by telephone that she had been replaced.

Beckwith returned to Dillard for light duty work approximately a month after the injury. She was assigned an entry-level position, which included document filing. Thereafter, she was asked to leave a weekly department managers' meeting because she no longer served in a management position. All of the other area sales managers and assistant managers observed Beckwith's humiliation as a result of the incident.

Beckwith was ultimately given two choices, resignation or a permanent entry-level sales associate position with a forty-percent cut in wages and benefits. She accepted the demotion because she was her sole support and needed the medical benefits. Beckwith was assigned to the ladies' ready-to-wear division, one of the most difficult departments in which to make daily sales quotas. If entry-level sales associates did not make their daily quotas, they could be docked part of their pay or be fired. After Beckwith began working in sales, the teenage sales associates would laugh at her behind her back, and additionally, other Dillard employees in the store talked about Beckwith's situation and why she was demoted. At one point when Beckwith walked into the employee lounge at lunchtime, the room went silent and people stared at her. Beckwith twice complained to management about the humiliation she was experiencing and its effect on her health. She finally resigned one week before her twenty-fifth year with Dillard.

At the time Beckwith was released to return to work there were two area sales manager positions open for which she was qualified, but management determined she was not eligible for an area sales manager position, a post she held prior to her demotion. She was notified the demotion was because she took time "off for workman's [sic] comp."

Beckwith fell into a depression and was treated by a psychiatrist for a major depressive disorder. She was treated with antidepressant medication and psychotherapy.

After leaving her job, Beckwith filled out applications for employment at several department stores, called friends who worked at different stores to inquire if any positions were open and consulted a friend who owned an employment agency in attempts to find work. She called Sears and J.C. Penney's to see if they had openings and filled out applications. She also filed an application with Neiman-Marcus. Nothing came of these efforts. At trial evidence was presented that most department stores have a policy to promote from within and for that reason, Beckwith would not have a chance to be hired as a manager at any comparable department store.

The jury awarded $424, 028 in compensatory damages on the tortious constructive discharge claim and $200,000 on the intentional infliction of emotional distress cause of action. The jury also awarded punitive damages and after reduction of each claim to three times the compensatory damages the punitive damages totaled $1,872,084. The total damages awarded were $2,496,112. The court also awarded attorney's fees in the amount of $518,455 pursuant to NRS 17.115 and NRCP 68.

DISCUSSION

Tortious Constructive Discharge

Employees in Nevada are presumed to be employed "at-will" unless the employee can prove facts legally sufficient to show a contrary agreement was in effect. Vancheri v. GNLV Corp., 105 Nev. 417, 777 P.2d 366 (1989). The at-will rule gives the employer the right to discharge an employee for any reason, so long as the reason does not violate public policy. Vancheri at 421, 777 P.2d at 369; K Mart Corp. v. Ponsock, 103 Nev. 39, 47, 732 P.2d 1364, 1369 (1987).

Previously, we have specifically held that "the at-will employment rule is subject to limited exceptions founded upon strong public policy; and the failure of the legislature to enact a statute expressly forbidding retaliatory discharge for filing workmen's compensation claims does not preclude this Court from providing a remedy for what we conclude to be tortious behavior." Hansen v. Harrah's, 100 Nev. 60, 63, 675 P.2d 394, 396 (1984).

Dillard claims a private cause of action for tortious discharge for filing a workers' compensation claim no longer exists in Nevada after the legislature, in 1995, passed NRS 616D.030:

1. No cause of action may be brought or maintained against an insurer or a third-party administrator who violates any provision of this chapter or chapter 616A, 616B, 616C or 617 of NRS.

2. The administrative fines provided for in NRS 616B.318 and 616D.120 are the exclusive remedies for any violation of this chapter or chapter 616A, 616B, 616C or 617 of NRS committed by an insurer or a third-party administrator.

We have recognized:

[R]etaliatory discharge by an employer stemming from the filing of a workmen's compensation claim by an injured employee is actionable in tort. Since both the cause of action and the remedy are governed by the law of torts, there is no basis for administrative relief within the framework of the state industrial insurance system ...."

Hansen, 100 Nev. at 64-65, 675 P.2d at 397.

The statutory scheme applies only to the administration of the act. The statutes set forth fines to be paid for violations of the act, such as not paying claimants properly, or at all. It also provides that a self-insured employer may lose its certification if it violates the workers' compensation statutes. NRS 616D.030, as part of this statutory scheme, does not affect the case law of tortious discharge against public policy.

[A] tortious constructive discharge is shown to exist upon proof that: (1) the employee's resignation was induced by action and conditions that are violative of public policy; (2) a reasonable person in the employee's position at the time of resignation would have also resigned because of the aggravated and intolerable employment actions and conditions; (3) the employer had actual or constructive knowledge of the intolerable actions and conditions and their impact on the employee; and (4) the situation could have been remedied.

Martin v. Sears, Roebuck and Co., 111 Nev. 923, 926, 899 P.2d 551, 553 (1995) (citing Brady v. Elixir Industries, 196 Cal.App.3d 1299, 1306, 242 Cal.Rptr. 324 (1987)). Here, the jury was properly instructed on the above elements.

We have held that "Nevada's workmen's compensation laws reflect a clear public policy favoring economic security for employees injured while in the course of their employment." Hansen, 100 Nev. at 63, 675 P.2d at 396.

Beckwith also requested and received a jury instruction concerning the provisions of NRS 616C.530, which provides that an insurer shall follow certain priorities in returning an injured employee to work, the first priority being to "[r]eturn the injured employee to the job he had before his injury." Dillard complains that the instruction created a strict liability standard and in effect directed a verdict against it.

We disagree. The instruction, which by its terms only applies to operatives of a public or private workers' compensation plan, was offered to demonstrate Nevada's policy with regard to injured workers. The instruction was not offered as an assertion of strict liability or that a violation of NRS 616C.530 is a claim for which a worker may receive monetary damages. Beckwith's claim was that Dillard violated public policy by requesting her to return to work prior to being medically released. Dillard then punished Beckwith for her refusal to return to work against doctor's orders by demoting her. Clearly, the public policy of this state favors "economic security for employees injured while in the course of their employment." We conclude that the failure to follow the priorities set forth in the statute, together with Dillard's improper request that Beckwith return to work against doctor's orders, was a direct violation of that public policy. One of the elements necessary to prove constructive tortious discharge is that the action by the employer was in violation of...