Larson v. Ruskowitz, s. 68,040 and 68,044

• Decision Date: 16 April 1993
• Docket Number: Nos. 68,040 and 68,044,s. 68,040 and 68,044
• Citation: 850 P.2d 253,252 Kan. 963
• Parties: Cynthia Scott LARSON and Curtis Graham, Appellees, v. Joseph RUSKOWITZ and Wyandotte County Board of Commissioners, Appellants.
• Court: Kansas Supreme Court

Page 253

850 P.2d 253

252 Kan. 963

Cynthia Scott LARSON and Curtis Graham, Appellees, v. Joseph RUSKOWITZ and Wyandotte County Board of Commissioners, Appellants.

Nos. 68,040 and 68,044.

Supreme Court of Kansas.

April 16, 1993.

Syllabus by the Court

1. Where county employees are laid off as a result of a reorganization plan approved by the board of county commissioners and unsuccessfully seek the board's modification of the plan to allow their retention, the laid off employees are not required to appeal under K.S.A. 19-223 from said denial of modification in lieu of or as a condition to the filing of a tort action under the Kansas Tort Claims Act based upon retaliatory discharge.

2. A governmental unit cannot dismiss a public employee for exercising the right to speak out on issues of public concern because to do so would have an inhibiting effect on freedom of speech. A public employee's right to free speech is not absolute. The State has interests as an employer in regulating the speech of its employees that differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general. There should be a balance between the interests of a public employee, as a citizen, in commenting upon matters of public concern and the interests of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.

3. In applying the balancing test applicable to a governmental unit regulating the speech of an employee, the court as a threshold matter must first determine whether the communication can fairly be characterized as constituting speech on a matter of public concern. If so, the court must then balance the interests of the employee with the interests of the State in effectively and efficiently fulfilling its responsibilities to the public.

4. If the balancing test tips in favor of the employee, the employee has the burden of showing that the communication was a motivating factor for the discharge or suspension. When that burden is met, then the burden shifts to the governmental unit to show that it would have reached the same decision, even in the absence of the communication.

5. Retaliatory discharge actions based upon "whistle-blowing" and the violation of a public employee's right of freedom of speech are discussed and distinguished from each other.

R. Jeff Fendorf, Asst. County Counselor, argued the cause and was on the brief for appellants.

Jeffrey A. Dehon, Kansas City, argued the cause and was on the brief for appellees.

McFARLAND, Justice:

These are consolidated retaliatory discharge actions in which the plaintiffs contend their terminations as supervisors with Wyandotte County Community Corrections resulted from their comments criticizing the operation of the agency by its director, Joseph Ruskowitz. Verdicts were entered in favor of the plaintiffs, as follows:

                Larson
                  Lost wages and benefits  $100,000.00
                  Emotional distress       $200,000.00
                                           -----------
                    Total                  $300,000.00
                Graham
                  Lost wages and benefits  $360,000.00
                  Emotional distress       $140,000.00
                                           -----------
                    Total                  $500,000.00
                The defendants appeal therefrom
                

JURISDICTION

For their first issue on appeal, the defendants contend the district court lacked subject matter jurisdiction herein. Their argument is as follows. On September 28, 1990, the plaintiffs were advised that they would be laid off effective October 31, 1990. The plaintiffs, in accordance with Wyandotte County's grievance procedures, filed grievances protesting their layoffs to the defendant Board of County Commissioners (Board), and the Board upheld the layoffs on October 30, 1990. The plaintiffs then followed the procedures set forth in K.S.A. 12-105b for filing claims for actions under the Kansas Tort Claims Act (K.S.A. 75-6101 et seq.).

The defendants contend the proper procedure was for the plaintiffs to have appealed the decision of the Board affirming the layoffs to the district court under K.S.A. 19-223, which provides:

"Any person who shall be aggrieved by any decision of the board of commissioners may appeal from the decision of such board to the district court of the same county, by causing a written notice of such appeal to be served on the clerk of such board within thirty days after the making of such decision, and executing a bond to such county with sufficient security, to be approved by the clerk of said board, conditioned for the faithful prosecution of such appeal, and the payment of all costs that shall be adjudged against the appellant."

The defendants acknowledge that this issue is being raised for the first time on appeal. The defendants argue that lack of jurisdiction may be raised at any time and that reviewing courts have a duty to raise the issue sua sponte, citing Misco Industries, Inc. v. Board of Sedgwick County Comm'rs, 235 Kan. 958, 685 P.2d 866 (1984), and Dick v. Drainage District No. 2, 187 Kan. 520, 358 P.2d 744 (1961).

Inasmuch as this issue is a challenge to jurisdiction, we will consider the issue, although it is raised for the first time on appeal.

In Dutoit v. Board of Johnson County Comm'rs, 233 Kan. 995, 998-99, 667 P.2d 879 (1983), we discussed K.S.A. 19-223 and held that it provided the exclusive method by which a district court may review a judicial or quasi-judicial decision of a board of county commissioners but was inapplicable to appeals from a legislative-type decision by a board of county commissioners.

What type of decision is involved herein? In September 1990, the Board had approved a reorganization plan submitted to it by the Community Corrections Advisory Board which provided, inter alia, for the elimination of 15 positions including the two held by the plaintiffs. In the filing of the grievances, the plaintiffs were, in essence, asking the Board to reconsider that aspect of the reorganization plan which eliminated their positions. When their efforts at retention of their employment proved unsuccessful, they then brought this action in tort seeking damages for their termination after filing the necessary statutory notice.

We conclude this was an appropriate procedure. The action herein arises out of the employer-employee relationship of the parties. The Board was acting in an administrative capacity in approving the reorganization plan and in declining to modify the plan as requested by the plaintiffs. The tort action herein could have been brought without having sought reconsideration of the reorganization plan. The fact that such reconsideration or review was sought does not lock plaintiffs into a position of being required to exhaust that avenue through the court system in lieu of or as a condition to proceeding under the Tort Claims Act. We conclude the district court had jurisdiction herein.

CAUSE OF ACTION

For their second issue, the defendants contend the case was improperly submitted to the jury. They argue that the district court either failed to make or improperly made certain necessary determinations required by the nature of the cause of action. These areas involve determination of whether the statements of the plaintiffs which they contend caused their discharge involved a matter of public concern and application of the balancing test. Before proceeding to a discussion of the facts herein and how the case was judicially handled, an analysis of the cause of action is appropriate.

In their briefs the parties refer to the case as being a "whistle-blowing" retaliatory discharge claim. In their briefs the parties treat two related causes of action which differ in significant respects as one, and this blending has, we believe, caused some of the problems present herein. We need to discuss and separate these two causes of action.

Palmer v. Brown, 242 Kan. 893, 752 P.2d 685 (1988), is a good example of a "whistle-blowing" retaliatory discharge action. In Palmer, the plaintiff was a medical technician employed in a laboratory owned by the defendants. Although not directly involved therein, she became aware of the fact that the laboratory was committing Medicaid fraud by billing for tests that were not performed. She reported this fact to "unspecified authorities" and was terminated from her employment for such action.

In Palmer, we noted that it is public policy to encourage citizens to report crimes and that Medicaid fraud is a felony offense, and we traced the development of retaliatory discharge actions based upon "whistle-blowing." We then stated:

"Several jurisdictions have provided common-law 'whistle-blower' protection for employees discharged for reporting illegal activity. See, e.g., Vermillion v. AAA Pro Moving & Storage, 146 Ariz. 215, 704 P.2d 1360 (1985) (employee told customer of employer theft of customer's property); Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876 (1981) (employee reported to police theft of screwdriver by co-employee); Kalman v. Grand Union Co., 183 N.J.Super. 153, 443 A.2d 728 (1982) (pharmacist reported to State Board of Pharmacy employer's plan to violate state pharmacy rules); Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367 (9th Cir.1984) (employee reported to California health officials shipment of adulterated milk); Shaw v. Russell Trucking Line, Inc., 542 F.Supp. 776 (W.D.Pa.1982) (employee notified police that employer's trucks were overloaded in violation of state law).

"Public policy requires that citizens in a democracy be protected from reprisals for performing their civic duty of reporting infractions of rules, regulations, or the law pertaining to public health, safety, and the general welfare. Thus, we have no hesitation in holding termination of an employee in retaliation for the good faith reporting of a serious infraction of such rules, regulations, or the law by a co-worker or an employer to either company...