Dukowitz v. Hannon Sec. Servs.

• Decision Date: 02 January 2014
• Docket Number: No. A11–1481.,A11–1481.
• Citation: 841 N.W.2d 147
• Parties: Jane Kay DUKOWITZ, Appellant, v. HANNON SECURITY SERVICES, Respondent.
• Court: Minnesota Supreme Court

841 N.W.2d 147

Jane Kay DUKOWITZ, Appellant,

v.HANNON SECURITY SERVICES, Respondent.

No. A11–1481.

Supreme Court of Minnesota.

Jan. 2, 2014.

Syllabus by the Court

1. The public-policy exception to the employment-at-will rule does not apply to a termination resulting from an employee's application for unemployment benefits.

2. Minnesota Statutes § 549.04, subd. 1 (2012), does not permit a district court to consider a non-prevailing party's indigent status when it awards costs and disbursements to a prevailing party.

John J. Neal, Willenbring, Dahl, Wocken & Zimmermann, PLLC, Cold Spring, MN, for appellant.

James R. Andreen, Jessica A. Ommen, Erstad & Riemer, P.A., Minneapolis, MN, for respondent.

Leslie L. Lienemann, Culberth & Lienemann, LLP, Saint Paul, MN; Stephen L. Smith, The Law Firm of Stephen L. Smith, Dorene R. Sarnoski, Dorene R. Sarnoski Law Office; and Justin D. Cummins, Cummins & Cummins, LLP, Minneapolis, MN, for amicus curiae National Employment Lawyers Association, Minnesota Chapter.

OPINION

STRAS, Justice.

Respondent Hannon Security Services (“Hannon”) terminated appellant Jane Kay Dukowitz from her position as a security officer. In this appeal, Dukowitz presents two legal questions for our consideration. The first question is whether the public-policy exception to the employment-at-will rule applies to a termination resulting from an employee's application for unemployment benefits. The second question is whether a district court has discretion to consider a non-prevailing party's status as an indigent litigant when it awards costs and disbursements to a prevailing party in a civil action. Because we conclude that the public-policy exception to the employment-at-will rule does not apply in this case and that Minn.Stat. § 549.04, subd. 1 (2012), does not permit a court to consider a non-prevailing party's indigent status, we affirm.

I.

Hannon hired Dukowitz as a security officer in November 2005 and assigned her to an evening position. In July 2008, Dukowitzlearned about a temporary daytime position that would be available for the holiday season. Dukowitz's supervisor offered her the position, but required Dukowitz to sign a document acknowledging the possibility that the position would be unavailable beyond the holiday season. Dukowitz switched to the daytime position in September 2008. In early December, Dukowitz's supervisor informed her that the position would no longer be available after the end of December and that Hannon did not have any hours available for Dukowitz in the ensuing months. Dukowitz claims that she told her direct supervisor that she would need to apply for unemployment benefits “to make ends meet.” According to Dukowitz, her supervisor then turned to another supervisor and asked, “should we term her?”—in other words, terminate her employment. Dukowitz claims that she begged her supervisor not to terminate her and asked that Hannon place her on a “floating shift” so that she could work when shifts became available.

Dukowitz applied for unemployment benefits on December 21, 2008. Two days later, Dukowitz's daytime position became unavailable. Hannon ultimately terminated Dukowitz's employment on March 13, 2009. The parties dispute the reasons for Dukowitz's termination. Hannon asserts that Dukowitz was terminated because of her “poor work [for a client], her expressed unwillingness to work weekends or nights and the lack of Hannon opportunities for business in the St. Cloud area.” Dukowitz contends that she received positive performance reviews and that she never refused to work weekends or nights.

In June 2010, Dukowitz commenced this action against Hannon for wrongful discharge. Dukowitz alleged in her complaint that Hannon violated the public policy of the State of Minnesota when it terminated her employment in retaliation for her application for unemployment benefits. The district court granted Hannon's motion for summary judgment based in part on its conclusion that “common law wrongful termination claims [are limited] to scenarios in which an employee was fired for his or her refusal to violate the law.” ¹ The court also awarded Hannon $1,361.35 in costs and disbursements, rejecting Dukowitz's argument that the court should not award Hannon costs and disbursements because of her indigent status.

The court of appeals affirmed. Dukowitz v. Hannon Sec. Servs., 815 N.W.2d 848, 855 (Minn.App.2012). The court acknowledged that “an employer may be liable for wrongful discharge if it terminates an employment relationship because of the employee's refusal to violate the law,” but concluded that Dukowitz's claim did “not come within this narrow exception” to the employment-at-will rule. Id. at 851. Instead, the court observed that allowing Dukowitz to proceed on her theory would require it “to recognize a new cause of action.” Id. The court of appeals also concluded that the district court “correctly determined that it did not have discretion to deny Hannon's application for costs and disbursements.” Id. at 855. We granted Dukowitz's petition for further review.²

II.

The first question presented in this case is whether the public-policy exception to the employment-at-will rule applies to a termination resulting from an employee's application for unemployment benefits. We review de novo a district court's grant of summary judgment. Savela v. City of Duluth, 806 N.W.2d 793, 796 (Minn.2011). We view the evidence in the light most favorable to the party against whom summary judgment was granted to determine whether there are any genuine issues of material fact and whether the district court correctly applied the law. Bearder v. State, 806 N.W.2d 766, 770 (Minn.2011).

The dispute in this case centers on the scope of the public-policy exception to the employment-at-will rule. Dukowitz argues that our decisions in Phipps v. Clark Oil & Refining Corp., 408 N.W.2d 569 (Minn.1987), and Nelson v. Productive Alternatives, Inc., 715 N.W.2d 452 (Minn.2006), establish a cause of action for wrongful discharge if an employee can identify a clear mandate of public policy that the employer violated when it discharged the employee. Dukowitz alternatively asserts that, even if the scope of the public-policy exception is more limited, we should now recognize a cause of action for wrongful discharge under the circumstances presented by this case. We address each of Dukowitz's arguments in turn.

A.

In Minnesota, the employer-employee relationship is generally at-will, which means that an employer may discharge an employee for “any reason or no reason” and that an employee is “under no obligation to remain on the job.” Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn.1983). In Phipps, we recognized a narrow public-policy exception to the employment-at-will rule. See408 N.W.2d at 571. We held that “[a]n 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 or rule or regulation adopted pursuant to law.” Id. We thus limited the cause of action in Phipps to discharges resulting from an employee's good-faith refusal to violate the law.

Dukowitz interprets Phipps more broadly, arguing that the case implicitly recognized an exception to the employment-at-will rule for any violation of a clear mandate of the state's public policy. Dukowitz's interpretation, however, is inconsistent with the reasoning of Phipps. In that case, we did not reach “the policy question of whether or not Minnesota should join the three-fifths of the states that now recognize, to some extent, a cause of action for wrongful discharge.” Phipps, 408 N.W.2d at 571;see also Anderson–Johanningmeier v. Mid–Minn. Women's Ctr., Inc., 637 N.W.2d 270, 273 (Minn.2002)(noting that Phipps “did not resolve whether Minnesota should join the majority of states that had recognized a cause of action for wrongful discharge”).

Nelson, the other case relied upon by Dukowitz, was similarly limited in scope. In Nelson, we considered the effect of Minnesota's Whistleblower Act, Minn.Stat. § 181.931–.935 (2012), on the cause of action we had recognized in Phipps.Nelson, 715 N.W.2d at 453. Although we acknowledged some possible overlap between the two, we held that the common-law cause of action that we had recognized in Phipps survived the enactment of the Whistleblower Act. See Nelson, 715 N.W.2d at 455 & n. 3.

Of particular significance here, we also concluded that Nelson's complaint failed to state a legally cognizable claim. Id. at 456. In doing so, we observed that Nelson had failed to identify a “clear public policy at stake that would justify judicially interposing a new restriction and a new cause of action.” Id. at 457. We then explicitly declined to consider whether the public-policy exception extended to circumstances beyond those identified in Phipps:

Because we conclude that Nelson's discharge was not a violation of a clear public policy, we need not determine whether Nelson would have stated a viable cause of action for wrongful discharge if his discharge had violated a clear public policy. Accordingly, we also do not address the broader question of whether other discharges in violation of public policy give rise to common-law causes of action, aside from those that we already recognized in Phipps.

See Nelson, 715 N.W.2d at 457 n. 5.

Phipps and Nelson, therefore, recognize a common-law cause of action for wrongful discharge only in those circumstances in which a termination is the result of an employee's refusal to do an act that the employee, in good faith, believes to be illegal. See Abraham v. Cnty. of Hennepin, 639 N.W.2d 342, 352 (Minn.2002) (stating that “the common law protects those fired for their refusal to violate the law”); Anderson–Johanningmeier, 637 N.W.2d at 273 (same). Neither case recognizes a broader cause of action that arises every time an employee's...