Dunwoody v. Handskill Corp.

• Citation: 185 Or.App. 605,60 P.3d 1135
• Parties: Cathleen DUNWOODY, Appellant, v. HANDSKILL CORPORATION, an Oregon corporation, and Edward Snider, Respondents.
• Decision Date: 08 January 2003
• Court: Court of Appeals of Oregon

60 P.3d 1135

185 Or.App. 605

Cathleen DUNWOODY, Appellant, v. HANDSKILL CORPORATION, an Oregon corporation, and Edward Snider, Respondents.

9908-08919; A112093.

Court of Appeals of Oregon.

Argued and Submitted April 8, 2002.

Decided January 8, 2003.

Maureen Leonard, Portland, argued the cause for appellant. With her on the briefs was Peggy S. Foraker, Gresham.

Paul C. Buchanan argued the cause for respondents. With him on the brief was Andrew M. Altschul, Boise, ID.

Before HASELTON, Presiding Judge, and LINDER and WOLLHEIM, Judges.

LINDER, J.

Plaintiff, a contractual employee, allegedly was fired for missing work in order to assist the state in the prosecution of her husband's murderers. She brought this action against her employer for common-law wrongful discharge and intentional infliction of emotional distress. The trial court concluded that a contractual employee who may be terminated only for just cause may not bring an action for wrongful discharge. Based on that conclusion, the trial court dismissed plaintiff's claim for wrongful discharge.¹ We disagree with the trial court's legal conclusion and hold that a person may bring an action for common-law wrongful discharge even though that person is a party to an employment contract that provides that she may be terminated only for cause. We also hold that a person has a public duty to testify in criminal proceedings when compelled to do so by subpoena. Consistently with those holdings, we reverse that part of the trial court's judgment that dismissed plaintiff's claim for wrongful discharge and remand for further proceedings.

Because this case was decided on a motion to dismiss, we take the facts from the complaint. Dymock v. Norwest Safety Protective Equipment, 334 Or. 55, 57, 45 P.3d 114 (2002). In doing so, we assume the truth of all well-pleaded factual allegations and give plaintiff the benefit of all favorable inferences that may be drawn from the facts alleged. McGanty v. Staudenraus, 321 Or. 532, 536, 901 P.2d 841 (1995).

On October 2, 1996, plaintiff's husband was murdered by three teenagers on Larch Mountain. At that time, plaintiff was working for defendant Handskill. In December 1996, plaintiff and defendant entered into a three-year "Contract for Services." Defendant's stated purpose for entering into the contract was "to protect [plaintiff] in the event the Corporation was sold in the midst of the criminal prosecutions, so as to allow her to cooperate in the criminal case without losing her job." To that end, the contract provided for "time off without pay * * * for court time during 1997 and 1998 * * *."

With defendant's approval, plaintiff attended the trial of her husband's murderers. The criminal jury returned a guilty verdict on a Monday evening. Plaintiff "was compelled by the Multnomah County District Attorney's Office to assist and testify in the penalty phase of the criminal prosecution the next day." Although she worked Tuesday morning, plaintiff informed defendant Snider that she would be at the district attorney's office on Tuesday afternoon. While she was meeting with a deputy district attorney regarding her testimony in the penalty phase, defendant Snider called plaintiff on her cellular phone and yelled, " `Where the hell are you? I need you at the office[,]' " and asked her, " `What the hell do you do when you are here?' " Defendant subsequently fired plaintiff for missing work in order to assist the state in prosecuting her husband's murderers. According to plaintiff's complaint, defendant's "discharge of plaintiff was in contravention of the clear public policy against interference in a criminal prosecution by attempting to interfere with a witness who has been compelled to assist the District Attorney's Office." Defendant moved to dismiss plaintiff's claim for wrongful discharge. ORCP 21 A(8). Specifically, defendant argued that, because plaintiff was employed pursuant to a contract and was not an at-will employee, she had an adequate remedy in contract and thus could not bring a claim for wrongful discharge. Additionally, defendant argued that plaintiff failed to identify a "protected public policy interest that was violated by the termination of her employment." The trial court agreed with defendant's first argument and, on that basis, dismissed plaintiff's claim for wrongful discharge.

On appeal, plaintiff argues that her status as a just-cause employee does not preclude her from bringing a claim for common-law wrongful discharge. Defendant takes the opposite position, arguing that, "[b]ecause [plaintiff] had a contract that guaranteed employment for a specific period, her employment could be terminated earlier only for `good' or `just' cause." Thus, according to defendant, "in the event of such a discharge, plaintiff, unlike an at-will employee, has a remedy." To bolster that argument, defendant characterizes the tort of wrongful discharge as "a narrow exception to the at-will employment doctrine." As such, it is an interstitial tort that is intended to fill a gap so that an at-will employee, who is otherwise without a remedy, will have one if she is discharged for reasons that contravene public policy. Defendant argues that, because plaintiff may bring an action for breach of contract, she may vindicate her own injury and the public interest by pursuing her rights under the contract.

In response, plaintiff points out that contract and tort claims are regularly brought together, especially in employment cases. See, e.g., McGanty, 321 Or. at 534, 901 P.2d 841 (action by former employee seeking damages for intentional infliction of severe emotional distress, wrongful discharge, battery, and breach of contract). Plaintiff also points to cases in which employees brought wrongful discharge claims after pursuing contractual remedies under collective bargaining agreements. See Shockey v. City of Portland, 313 Or. 414, 837 P.2d 505 (1992), cert. den., 507 U.S. 1017, 113 S.Ct. 1813, 123 L.Ed.2d 444 (1993); Shuler v. Distribution Trucking Co., 164 Or.App. 615, 994 P.2d 167 (1999), rev. den., 330 Or. 375, 6 P.3d 1104 (2000); Moustachetti v. State of Oregon, 122 Or.App. 598, 858 P.2d 487 (1993), aff'd, 319 Or. 319, 877 P.2d 66 (1994). Notwithstanding those examples, neither this court nor the Supreme Court has specifically decided whether a party to an employment contract can pursue a claim for wrongful discharge. A review of Oregon law leads us to conclude that the existence of a contractual relationship does not, by itself, foreclose a plaintiff from bringing a claim for common-law wrongful discharge.

The Supreme Court first recognized the tort of wrongful discharge in Nees v. Hocks, 272 Or. 210, 536 P.2d 512 (1975). In Nees, the court began by restating the rule of at-will employment, namely, that "in the absence of a contract or legislation to the contrary, an employer can discharge an employee at any time and for any cause * * *. Such termination * * * is not a breach of contract and ordinarily does not create a tortious cause of action." Id. at 216, 536 P.2d 512. Notwithstanding that well established rule, the court concluded that "there can be circumstances in which an employer discharges an employee for such a socially undesirable motive that the employer must respond in damages for any injury done." Id. at 218, 536 P.2d 512. In so concluding, the court recognized the tort of wrongful discharge as an exception to the at-will rule.

In the two years after Nees was decided, the court decided three additional wrongful discharge cases that served to demonstrate some of the boundaries of the newly recognized tort. The first of the three was Campbell v. Ford Industries, Inc., 274 Or. 243, 546 P.2d 141 (1976). The plaintiff in that case, a stockholder and employee, was fired in retaliation for exercising his statutory right to inspect corporate records. The court determined that the statute's primary purpose was to protect private and proprietary interests rather than public interests. Id. at 250, 546 P.2d 141. Because the plaintiff had been discharged for exercising a private statutory right that the court concluded was not of great importance to society, the court declined to extend the tort of wrongful discharge to his circumstances. Id. at 250-51, 546 P.2d 141.

The court likewise concluded that the wrongful discharge claim in Walsh v. Consolidated Freightways, 278 Or. 347, 563 P.2d 1205 (1977), was not actionable. There, an employee claimed that he had been terminated for reporting safety violations. In concluding that the employee could not bring a wrongful discharge claim for such a discharge, the court began by explaining that it created a remedy in Nees because "no other remedy existed for the wrongfully discharged employee." Walsh, 278 Or. at 351, 563 P.2d 1205. The court recognized that the societal interest in reporting safety violations was on par with the societal interest at issue in Nees. Id. But the plaintiff had an adequate remedy, via a complaint to the United States Department of Labor, to vindicate that interest. Id. at 351-52, 563 P.2d 1205. The court thus declined to extend the tort because the available statutory remedies were adequate to address both the injury to society and to the individual plaintiff. Id. at 352-53, 563 P.2d 1205.

One year after Walsh was decided, the court reached the opposite conclusion about the adequacy of a plaintiff's remedies and thus about the availability of a wrongful discharge action. In Brown v. Transcon Lines, 284 Or. 597, 588 P.2d 1087 (1978), the plaintiff brought a claim for wrongful discharge after being terminated for filing a workers' compensation claim. At the time of his discharge, the plaintiff had a remedy under a statute that made it an unlawful employment practice to discriminate against an employee for making a workers' compensation claim. Relying on Walsh, the defendant argued that the plaintiff's statutory remedy was adequate and he...