Martin Marietta Corp. v. Lorenz, 90SC583

• Decision Date: 13 January 1992
• Docket Number: No. 90SC583,90SC583
• Citation: 823 P.2d 100
• Parties: , 120 Lab.Cas. P 56,773, 7 IER Cases 77 MARTIN MARIETTA CORPORATION, Petitioner, v. Paul M. LORENZ, Respondent.
• Court: Colorado Supreme Court

Page 100

823 P.2d 100

60 USLW 2473, 120 Lab.Cas. P 56,773,

7 IER Cases 77

MARTIN MARIETTA CORPORATION, Petitioner, v. Paul M. LORENZ, Respondent.

No. 90SC583.

Supreme Court of Colorado En Banc.

Jan. 13, 1992.

As Modified on Denial of Rehearing Feb. 3, 1992.

Holme Roberts & Owen, John R. Webb, Katherine J. Peck, Susan B. Prose, Edwin P. Aro, Karen M. Barry, Denver, for petitioner.

Feiger, Collison & Killmer, Gilbert M. Roman, Darold W. Killmer, Denver, for respondent.

Barry D. Roseman, Law Offices of John W. McKendree, Thomas A. Feldman, Denver, for amicus curiae Nat. Employment Lawyers Ass'n.

Justice QUINN delivered the Opinion of the Court.

In Lorenz v. Martin Marietta Corp., Inc., 802 P.2d 1146 (Colo.App.1990), the court of appeals reversed the trial court's entry of a directed verdict against the plaintiff, Paul M. Lorenz, an at-will employee of Martin Marietta Corporation, on his tort claim against Martin Marietta for wrongful discharge predicated on Lorenz's alleged refusal to perform an illegal act. The court of appeals held that Lorenz's claim was cognizable in tort, that the standard for a wrongful discharge claim established in Cronk v. Intermountain Rural Elec. Ass'n, 765 P.2d 619 (Colo.App.1988), should be applied retroactively to Lorenz's claim, and that the statute of limitations for such a claim began to run on the day following Lorenz's discharge rather than on the date on which he was notified of his termination. We affirm the judgment, but in so doing we employ a slightly different analysis than that utilized by the court of appeals. We hold that a claim for wrongful discharge under the public-policy exception to the at-will employment doctrine is cognizable in Colorado and that, in order to withstand a directed verdict on a claim for wrongful discharge based on an employee's refusal to perform an illegal act, the employee must establish, in addition to the elements outlined in Cronk, that the employer had actual or constructive knowledge that the employee's refusal to perform the act was based on the employee's reasonable belief that the act directed by the employer was unlawful. In addition, we hold that the public-policy exception to the at-will employment doctrine should be retroactively applied to Lorenz's claim. Finally, we hold that Lorenz's cause of action accrued on the date of his actual discharge and that his tort claim was filed within the applicable statute of limitations. Because the added element applicable to Lorenz's claim for wrongful discharge--namely, the employer's actual or constructive knowledge of the reason for the employee's refusal to perform the act--had not been formulated as the controlling law when this case was tried, we remand the case for a new trial in the interest of fairness to both Lorenz and Martin Marietta.

I.

Lorenz's claim against Martin Marietta was predicated on the theory of wrongful or retaliatory discharge as the result of his failure to engage in acts of deception and misrepresentation concerning the quality of materials used by Martin Marietta in designing equipment for the National Aeronautics and Space Administration (NASA). The case was tried to a jury commencing on September 15, 1986, and at the conclusion of Lorenz's case the trial court directed a verdict in favor of Martin Marietta. Because of this evidentiary posture of the case, we summarize the evidence in the light most favorable to Lorenz, as we must for purposes of appellate review of a directed verdict. See Jasko v. F.W. Woolworth Co., 177 Colo. 418, 422, 494 P.2d 839, 841 (1972).

Lorenz held an advanced degree in mechanical engineering and, as of the date of the trial, had completed all his work for a doctorate degree in metallurgy except a thesis. Before joining Martin Marietta in 1972, he worked for the Boeing Company in Washington on defense and aerospace projects for sixteen years and specialized in fracture mechanics, which basically involved a study of the fracture or stress resistance of materials used in design and construction of defense and aerospace equipment. In July 1972 he was offered a position with Martin Marietta in Colorado. He accepted the offer and worked for Martin Marietta as an at-will employee until his termination in July 1975.

Lorenz worked in Martin Marietta's research and development department as a "principal investigator" on a number of NASA projects involving the design of equipment for the United States space-shuttle program. As a "principal investigator," Lorenz was responsible for the organization and quality control of the projects assigned to him. In the course of his responsibilities, he expressed concerns to his superiors at Martin Marietta over three major NASA projects referred to as the NDI Contract, the Mixed Mode Contract, and the Tug Irad Contract. These projects were instituted by Martin Marietta in response to NASA's requests for proposals relating to equipment to be used in the space-shuttle system.

The purpose of the NDI Contract was to produce data regarding the quality of materials to be used in the design of an external tank for the space shuttle. In the fall of 1973, a design and review meeting was held to evaluate the status of the NDI Contract. During this meeting Lorenz expressed his concern that the testing sequence proposed was inadequate and that the existing data were insufficient to permit the designers to develop a safe external tank within the proposed contract price. Lorenz expressed his concern to his department head that Martin Marietta's proposals to NASA were "high promises" without any means to implement them. Due in part to the high cost of additional testing recommended by Lorenz, his comments were not well received by his supervisors.

In 1974 Lorenz told his supervisors that the data generated under the NDI Contract were not being communicated to the appropriate NASA personnel. When no action was taken on his concerns, he related them to the NASA project manager, who described Lorenz as "very attentive to details" and straightforward in his evaluations and criticisms of a particular project. As a result of Lorenz's action, a technical review session was held in order to address his concerns. Lorenz was chosen to take the minutes of this meeting and to distribute them to Martin Marietta and NASA participants. After drafting the minutes, Lorenz was instructed by a higher Martin Marietta official to make modifications in the minutes. Lorenz refused to make any changes to the minutes, and responded instead with a memorandum stating that the proposed modifications were not mere corrections but rather were retractions of important representations made by Martin Marietta officials to NASA at the review session. Lorenz was informed by his supervisor that he should have made the modifications and was warned that he should "start playing ball with management."

Lorenz later became involved as a principal investigator in another NASA project, referred to as the "Mixed Mode Contract." This project, which was funded from an internal research and development contribution of $25,000 from NASA, was undertaken by Martin Marietta in response to NASA's request for a contract proposal relating to the design and construction of a testing machine known as the Biaxial Test Fixture. The machine's purpose was to measure complex stresses in aluminum alloys used in the space shuttle. In August 1974 Lorenz wrote a memorandum to his superiors regarding problems which, if not corrected, could result in serious delays and costs. When asked to inspect the Biaxial Test Fixture, Lorenz found it to be deficient and unable to properly perform the function for which it was designed. Upon asking the person responsible for constructing the machine how such a defective piece of equipment could have been built, Lorenz was told that his superiors had directed that the machine be built for not more than $10,000 rather than the $25,000 allocated to the project.

The third project Lorenz undertook was an attempt to demonstrate Martin Marietta's ability to perform certain work for a NASA space vehicle known as "The Tug." The contemplated use of the Tug was to transport astronauts in space from one area to another. Lorenz's involvement in the project was to investigate and evaluate the fracture propensities of thin gauge aluminum to be used in the fuel tank. Lorenz testified that, although he was pressured by his superiors to attest to the adequacy of certain materials, he refused to write a final report attesting to the quality of the materials. His refusal was based on his professional opinion that the materials had not been subjected to adequate testing. According to Lorenz, he told his superiors that to compromise on this issue would jeopardize his integrity and his usefulness to Martin Marietta as an expert and, in addition, would constitute a fraud on NASA.

Despite the fact that at this time Lorenz was extremely busy with various job responsibilities at Martin Marietta, he received a telephone call from his supervisor on July 22, 1975, in which he was told that Martin Marietta was laying him off for lack of work as of July 25, 1975. Lorenz testified that he did not regard the telephone call as a final decision to fire him, but rather hoped that there had been some "horrible mistake" which would be corrected. Lorenz returned to work at Martin Marietta on the next three days and performed his usual activities on the job. His last day of employment was July 25, 1975.

On July 24, 1981, Lorenz filed a tort claim against Martin Marietta for wrongful discharge. The trial court, at the conclusion of Lorenz's case, ruled that Colorado did not recognize a claim for wrongful discharge and that his claim was time-barred by the passage of more than six years following the notice of termination given to him on July 22, 1975. The trial court accordingly entered a directed verdict against Lorenz.

Lorenz appealed to the court of appeals, which...