Henning v. Avera McKennan Hosp., #29081

• Court: Supreme Court of South Dakota
• Writing for the Court: DEVANEY, Justice
• Citation: 945 N.W.2d 526
• Parties: Stephanie HENNING, Plaintiff and Appellant, v. AVERA MCKENNAN HOSPITAL, Defendant and Appellee.
• Decision Date: 17 June 2020
• Docket Number: #29081

945 N.W.2d 526

Stephanie HENNING, Plaintiff and Appellant,
v.
AVERA MCKENNAN HOSPITAL, Defendant and Appellee.

#29081

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS APRIL 20, 2020
OPINION FILED June 17, 2020

SCOTT G. HOY of Hoy Trial Lawyers, Prof. LLC, Sioux Falls, South Dakota, MICHAEL W. STRAIN of Strain Morman Law Firm, Sturgis, South Dakota, Attorneys for plaintiff and appellant.

LISA HANSEN MARSO, MATTHEW D. MURPHY of Boyce Law Firm, LLP, Sioux Falls, South Dakota, Attorneys for defendant and appellee.

DEVANEY, Justice

945 N.W.2d 528

[¶1.] Avera McKennan Hospital terminated Stephanie Henning, a nurse in its intensive care unit, after it discovered errors in Henning's documentation of controlled substances. Henning brought suit against Avera alleging multiple claims including: wrongful discharge, breach of contract, and defamation. The circuit court granted Avera summary judgment on all claims. Henning appeals, and we affirm.

Factual and Procedural Background

¶2.] Avera McKennan Hospital hired Stephanie Henning as a registered nurse in its intensive care unit in the fall of 2014. As part of its regular internal process, Avera tracks the handling of controlled substances by Avera employees to identify possible drug diversion issues. Avera uses an automated medication dispensing system to track medications administered to patients. Avera explained that its dispensing system logs when each employee accesses the system and withdraws certain medications. The employee must then track the medications by scanning the bar code at the time they are administered to patients or by manually entering into the system the time and amount administered. To account for waste, the employee must also note whether any of the withdrawn medications were not administered. Avera then uses the dispensing system to generate reports showing the information tracked.

[¶3.] In March 2016, the report run by Avera indicated an atypically high removal rate of Fentanyl by Henning in comparison to her coworkers between March 1, 2015 and March 1, 2016. Avera assigned a review committee consisting of Henning's nurse manager (Amy Boyd), a pharmacist, and a nurse to conduct a more thorough review of Henning's charts. The reviewers examined 16 charts and issued a written summary of their findings. The summary revealed 12 areas of concern, including that they could not account for 275 micrograms of Fentanyl, 3 milligrams of Ativan, and 3 milligrams of Hydromorphone under Henning's possession and control.¹ The summary further indicated that Henning did not scan 66 of the 669 medications to denote that the medications removed by her had been administered to a patient, the time of administration, and whether there was any leftover medication. Avera observed that these scanning errors would not on their own be concerning, but the fact that a large portion of the errors related to Fentanyl raised a red flag.

[¶4.] On March 28, Henning arrived for her scheduled shift, but instead of beginning her duties, she was asked to meet with Boyd and Teresa Frederick from Human Resources. At the meeting, Boyd and Frederick presented Henning with the information obtained during the committee's review of Henning's charts. According to Henning, Frederick told her that she would be reported to the South Dakota Board of Nursing for suspected drug diversion unless she accounted for the drugs she had removed but did not properly document in the dispensing system. Henning denied any wrongdoing.

[¶5.] At some point during the meeting, Agent Doug Heilman from the Department

[945 N.W.2d 529

of Criminal Investigation (DCI) came into the room. Avera had contacted the DCI to report possible drug diversion or a discrepancy/potential discrepancy in the tracking of controlled substances. The record suggests that Boyd and Frederick left the room while Agent Heilman questioned Henning. Henning points out that Agent Heilman told her he was there to help and that no one would be arrested that day. During Heilman's interview, Henning denied any use of narcotics and any sale or diversion of drugs. That same day, she also underwent a urinalysis, which, according to Henning, later came back negative for any of the controlled substances allegedly diverted.²

¶6.] Avera terminated Henning after the interview due to her documentation errors and her inability to account for the controlled substances removed from the dispensing system. Following her termination, Henning sent text and Facebook messages to at least 13 of her coworkers claiming that Avera had accused her of stealing narcotics and that Avera terminated her for documentation errors.

[¶7.] The next day, Avera reported Henning's suspected drug diversion to the South Dakota Board of Nursing. Henning had already self-reported. The Board conducted an independent investigation, and Henning hired counsel to represent her in the process. Following its investigation, the Board issued a confidential letter of concern and ordered Henning to attend counseling with the Health Professionals Assistance Program and complete remedial education. In early April 2016, Avera similarly reported Henning's suspected drug diversion to the South Dakota Department of Health, the Drug Enforcement Agency (DEA), and the South Dakota Board of Pharmacy. Each entity investigated the report and did not take action against Henning.

[¶8.] In September 2017, Henning brought suit against Avera alleging that Avera accused her without sufficient evidence or cause of stealing controlled substances and ingesting or selling them. She asserted that Avera's "breach of contract and tortious actions" caused her to lose "her job and her ability to find like work" and caused her to have to retain counsel to defend the allegations before the Board of Nursing. Henning further claimed that she suffered the loss of past and future wages, mental and emotional distress, loss of enjoyment of life, and other personal injuries. Finally, she alleged that Avera's actions constituted libel and slander.

[¶9.] Avera moved for summary judgment on all of Henning's claims, arguing that Henning could not, as a matter of law, prove wrongful termination or breach of contract because she was an at-will employee. Avera further asserted that no issue of material fact was in dispute on Henning's libel and slander claims because Avera reported the truth, and that its reporting to the governmental agencies was privileged and without malice. In response, Henning asserted that she was entitled to due process prior to being discharged because of Avera's controlled substance use policy and further asserted that a public policy exception to the at-will doctrine should apply. Henning additionally argued that Avera's failure to provide her due process caused her emotional distress.

[¶10.] The circuit court held a hearing on Avera's motion and thereafter issued a memorandum decision granting Avera summary judgment. The court noted that

[945 N.W.2d 530

Henning admitted in her deposition that she was an at-will employee and that Avera had not provided her anything, written or verbal, indicating that she was something other than an at-will employee. Therefore, the court concluded that Henning could not proceed on her breach of contract or wrongful termination claims. The court further reasoned that Henning failed to identify any evidence to support her claim that a public policy exception to the at-will doctrine applies here.

¶11.] On Henning's defamation claim, the court noted that Henning testified in her deposition that she was unaware of any false information reported by Avera related to either her documentation errors or her inability to account for controlled substances. The court also noted that Henning had not pointed to any statements by Avera that would imply a false assertion of an objective fact about Henning. Rather, the court determined that the record revealed that Avera's reports described suspected diversion. The court further concluded that the communications were privileged because Avera reported its suspicions to persons and entities with a common interest in the diversion of controlled substances. Finally, the court held that because malice could not be inferred, Henning would have to prove malice to destroy the privilege. In the...