Fleshner v. Pepose Vision Institute, P.C., No. ED 90853 (Mo. App. 1/20/2009)

• Decision Date: 20 January 2009
• Docket Number: No. ED 90853,ED 90853
• Parties: MICHELLE FLESHNER, Plaintiff/Respondent, v. PEPOSE VISION INSTITUTE, P.C., Defendant/Appellant.
• Court: Court of Appeal of Missouri (US)

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MICHELLE FLESHNER, Plaintiff/Respondent, v. PEPOSE VISION INSTITUTE, P.C., Defendant/Appellant.

No. ED 90853

Court of Appeals of Missouri, Eastern District, Division Four.

January 20, 2009.

NOTE: THIS OPINION IS SUBJECT TO MODIFICATION OR TRANSFER TO THE SUPREME COURT.

Appeal from the Circuit Court of St. Louis County, Honorable Mark D. Seigel.

KATHIANNE KNAUP CRANE, Judge.

Defendant employer appeals from a judgment entered on a jury verdict in favor of plaintiff, a former at-will employee, in her lawsuit to recover damages for wrongful termination based on her claim that she was terminated in retaliation for communicating with United States Department of Labor investigators. We reverse and remand because the trial court failed to instruct the jury that it had to find that plaintiff's communication was the exclusive cause of her termination.

FACTUAL AND PROCEDURAL BACKGROUND

We view the evidence in the light most favorable to the verdict. Plaintiff, Michelle Fleshner, was employed by defendant, Pepose Vision Institute, P.C., from September 2000 until May 2003. The record does not indicate that she had an employment contract. Defendant's founder and sole owner is Jay Pepose, M.D., Ph.D., an ophthalmologist. Dr. Pepose's wife, Susan Feigenbaum, served as a consultant to defendant as well as its executive secretary, and she participated in the decisions to hire plaintiff and to terminate her employment.

In March 2003, the United States Department of Labor (DOL) began an investigation into whether defendant failed to pay its employees overtime in violation of federal wage law. In mid-April, a DOL investigator interviewed employees, including plaintiff, at defendant's place of business. Plaintiff consented to being contacted at home. Jacob Cedergreen, plaintiff's direct supervisor, asked plaintiff what transpired during the interview and told plaintiff to contact him immediately if the investigator telephoned her. On May 21, 2003, the DOL investigator contacted plaintiff at her home by telephone. Plaintiff cooperated with the investigator, who sought general information about defendant's business, and specific information about time studies plaintiff had done for defendant. The next day, May 22, 2003, plaintiff described this conversation to Mr. Cedergreen. Mr. Cedergreen, who appeared agitated and unhappy, questioned why plaintiff had read the time studies to the DOL. That afternoon, Mr. Cedergreen emailed Ms. Feigenbaum, expressing his wish to terminate plaintiff immediately. Ms. Feigenbaum agreed by return email. The following day, May 23, 2003, Mr. Cedergreen terminated plaintiff and escorted her out of the building.

Plaintiff thereafter filed a lawsuit against defendant to recover damages for wrongful termination in violation of public policy.¹ Plaintiff alleged that she was terminated because she provided information to DOL officials investigating overtime pay violations, which was contrary to public policy as expressed in Missouri's Minimum Wage Law (MWL), sections 290.505, 290.510, 290.525 RSMo (2000). The jury entered a verdict against defendant, and awarded plaintiff $30,000 in compensatory damages and $95,000 in punitive damages. The trial court entered judgment on the verdict.

DISCUSSION

On appeal, defendant asserts that the trial court erred in (1) denying its motion for new trial based on juror misconduct (Point I); (2) denying its motions for directed verdict and JNOV (a) because plaintiff's state law claim was subject to federal preemption (Point II), and (b) because plaintiff failed to adduce substantial evidence that defendant's conduct violated Missouri public policy (Point III); (3) refusing to give a verdict director that required exclusive causation (Point IV); (4) admitting evidence of the parties' disagreement over the parties' non-compete agreement (Point V); and (5) in refusing to give an instruction limiting the use of that evidence (Point V).

The trial court erred in refusing to give a verdict director that required exclusive causation, which requires this case to be reversed and remanded for a new trial. The trial court did not err in denying the motions for directed verdict and JNOV, so we do not reverse without remand. Because it is unlikely to come up on retrial, we do not reach the question of juror misconduct. In addition, we do not reach the merits of the claim of error relating to the admission of the non-compete evidence because it was not preserved for appeal. Finally, we do not reach the failure to give a limiting instruction with respect to the non-compete evidence because the necessity of a limiting instruction in a future trial would depend on whether, in what form, and in what context this evidence would be admitted in another trial.

I. Verdict Director — Exclusive Causation

We begin our discussion with point four, which challenges the trial court's failure to require exclusive causation in the verdict director. Defendant asserts that the trial court erred in refusing to give defendant's proposed verdict director to the jury because it properly submitted that plaintiff was required to prove that her protected activity was the exclusive cause of her termination, whereas the verdict director given by the court erroneously required plaintiff to prove only that she was terminated "because of" her protected activity. We agree.

At the instruction conference, defendant proffered the following verdict director:

Your verdict must be for Plaintiff if you believe:

First, Plaintiff was employed by Defendant, and

Second, Plaintiff communicated with a U.S. Department of Labor investigator; and

Third, Defendant discharged Plaintiff, and

Fourth, the exclusive cause of such discharge was Plaintiff's communication with a U.S. Department of Labor investigator, and

Fifth, as a direct result of such discharge Plaintiff sustained damage.

The court rejected that instruction, and gave the verdict director proposed by plaintiff:

Your verdict must be for the Plaintiff Michelle Fleshner on her wrongful termination claim if you believe

First, Plaintiff Michelle Fleshner communicated with the United States Department of Labor, and

Second, Defendant Pepose Vision Institute terminated Plaintiff Michelle Fleshner's employment because she communicated with the United States Department of Labor, and

Third, Plaintiff Michelle Fleshner was thereby damaged.

Rule 70.02(a) provides that jury instructions "shall be given or refused by the court according to the law and the evidence in the case." "The giving of an instruction in violation of this Rule 70.02 shall constitute error its prejudicial effect to be judicially determined." Rule 70.02(c).

We review a trial court's refusal to give a proffered instruction de novo. Marion v. Marcus, 199 S.W.3d 887, 893 (Mo.App. 2006). See also Ploch v. Hamai, 213 S.W.3d 135, 139 (Mo.App. 2006). We reverse only if the error resulted in prejudice and materially affected the merits of the action. Marion, 199 S.W.3d at 894; Ploch, 213 S.W.3d at 139. See also Rules 70.02(a), 84.13(b). Prejudice results when the jury is directed to make a finding on an essential element under a lesser standard than the law requires. See Schoor v. Wilson, 731 S.W.2d 308, 313-14 (Mo.App. 1987).

Missouri considers employees whose term of employment is not protected by contract to be employees at will. See Johnson v. McDonnell Douglas Corp., 745 S.W.2d 661, 663 (Mo. banc 1988); Dake v. Tuell, 687 S.W.2d 191, 192-93 (Mo. banc 1985). Under the employment at will doctrine "an employer can discharge — for cause or without cause—an at-will employee . . . and still not be subject to liability for wrongful discharge." Dake, 687 S.W.2d at 193.

In 1985, the Western District of the Missouri Court of Appeals held that a public policy exception to the employment at will doctrine recognized by other jurisdictions would be recognized in Missouri. Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859 (Mo.App. 1985). Boyle identified four kinds of discharges that fall within the public policy exception, categorizing them according to the reason for the discharge: (1) because an employee refused to perform an illegal act; (2) because an employee reported violations of law or public policy to superiors or public authorities; (3) because an employee participated in acts that public policy would encourage; and (4) because an employee filed a workers' compensation claim. Boyle, 700 S.W.3d at 873-75. All three Missouri appellate court districts have recognized and continue to recognize a public policy exception in these limited instances. See, e.g., Drury v. Missouri Youth Soccer Ass'n, Inc., 259 S.W.3d 558, 566 (Mo.App. 2008); Sivigliano v. Harrah's, 188 S.W.3d 46, 48 (Mo.App. 2006); Bell v. Dynamite Foods, 969 S.W.2d 847, 852 (Mo.App. 1998); Williams v. Thomas, 961 S.W.2d 869, 873 (Mo.App. 1998); Porter v. Reardon Mach. Co., 962 S.W.2d 932, 936-37 (Mo.App. 1998); Adoch v. Newtec, Inc., 939 S.W.2d 426, 428 (Mo.App. 1996); Lynch v. Blanke Baer & Bowey Krimko, Inc., 901 S.W.2d 147, 150 (Mo.App. 1995).²

Although the public policy exception is available, it is narrow. Lynch, 901 S.W.2d at 151-52; Boyle, 700 S.W.2d at 871. As stated in Faust v. Ryder Commercial Leasing & Serv., 954 S.W.2d 383, 392 (Mo.App. 1997):

[I]t must be remembered that the Missouri Supreme Court has emphatically declared Missouri to be an employment-at-will doctrine state, Dake, supra, and Johnson, supra, and that the public policy exception to the doctrine, which was fashioned by the Missouri Court of Appeals and never expressly approved and adopted by the Missouri Supreme Court, is a narrow and limited exception, Adolphsen, 907 S.W.2d at 336; Cole, 884 S.W.2d at 21; Boyle, 700 S.W.2d at 878, which should not be expanded without clear justification.

To prevail on a claim of wrongful discharge under the public policy exception, a plaintiff must prove that the plaintiff engaged in one of the protected actions, that the...