Peter L. Phung v. Waste Management, Inc. and Francis J. Sidoti

Decision Date19 October 1984
Docket NumberS-84-4,84-LW-4279
PartiesPeter L. PHUNG, Plaintiff-Appellant, v. WASTE MANAGEMENT, INC. and Francis J. Sidoti, Defendants-Appellees. C.A.
CourtUnited States Court of Appeals (Ohio)

Peter L. PHUNG, Plaintiff-Appellant,

WASTE MANAGEMENT, INC. and Francis J. Sidoti, Defendants-Appellees.

No. S-84-4.

84-LW-4279 (6th)

Court of Appeals of Ohio, Sixth District, Sandusky

October 19, 1984

Dennis E. Murray and Kirk J. Delli Bovi, for appellant.

Jeffrey G. Miller and John D. Starn, for appellees.


1.Public policy requires that there be an exception to the absolute right of an employer to discharge an employee at will when such employee is discharged for reporting to his employer or proper authorities that the employer is conducting its business in violation of law.

2.An employee at will, who is discharged by his employer for reporting to either the employer or proper authorities that the employer is doing business in a manner which contravenes the law, has a cause of action against the employer for wrongful discharge.

3.While other jurisdictions vary as to whether an action for wrongful discharge is one in contract or one in tort, in Ohio, the cause of action for wrongful discharge in violation of public policy may be brought in tort.


Appellant, Dr. Peter L. Phung, has asked this court to carve out a public policy exception to the general principle in Ohio that an at-will employee may be discharged from employment at any time and under any circumstance. This court has carefully and laboriously considered this issue and we now reverse the judgment of the trial court, wherein that court held that no such exception existed.


Dr. Phung was employed as the chief chemist for Waste Management, Inc., at its liquid disposal site in Vickery, Ohio, during the two year period from April 1, 1979, through April 30, 1981. Dr. Phung's employment with Waste Management has since been terminated. On June 1, 1983, Dr. Phung filed an action in the Sandusky County Common Pleas Court, naming appellees, his employer, Waste Management, and his alleged supervisor, Francis J. Sidoti, as defendants.

Dr. Phung alleged in his complaint that during the course of his two year employment with Waste Management, he had acquired knowledge and had become aware that his employer had violated certain requirements set forth by law. Dr. Phung further alleged that upon ascertaining the nature, extent and duration of these violations, he directed these matters to the attention of his employer and immediate supervisor. Dr. Phung also alleged in his complaint that rather than ceasing these violations, Waste Management discharged him from its employ. Dr. Phung asserted that his discharge was wrongful and solely in retaliation for his insistence that Waste Management refrain from violating its legal obligations.

Appellees filed a motion in the trial court pursuant to Civ.R. 12(B) on November 17, 1983, asking the trial court to dismiss appellant-Phung's cause of action. Appellees argued that appellant-Phung had failed to state a claim under Ohio law upon which relief could be granted.

The trial court, on January 18, 1984, entered judgment holding that appellant-Phung was an employee at will and, therefore, terminable at any time and for any reason. The trial court deduced in its judgment entry that since the state of Ohio presently did not recognize a claim for wrongful discharge from employment, appellees' dismissal motion should be granted. This timely appeal followed.®1¯


Appellant-Phung challenges the trial court's dismissal of his cause of action, claiming as his sole assignment of error:


In construing appellant's complaint, for purposes of appellees' motion to dismiss, this court is required to accept the allegations contained therein as true. See Royce v. Smith (1981), 68 Ohio St.2d 106; State, ex rel. Alford, v. Willoughby (1979), 58 Ohio St.2d 221. Accepting the allegations in appellant's complaint as true, we are then required to apply the "beyond doubt" test as set forth in O'Brien v. University Community Tenants Union (1975), 42 Ohio St.2d 242. See Hedrick v. Centrafore Comprehensive Alcoholism Treatment (1982), 7 Ohio App.3d 211. Simply stated, application of this test assures that the dismissal of an action pursuant to a Civ.R. 12(B)(6) motion will not be upheld on appeal unless it appears beyond doubt that the nonmoving party can prove no set of facts in support of his claim that would entitle him to recover.


The Supreme Court has not addressed a public policy exception to the employment-at-will doctrine, although it has been presented with the opportunity to do so. See Evely v. Carlan Co. (1983), 4 Ohio St.3d 163, 168-169. Similarly, the Summit County Court of Appeals (9th Dist.), has discussed the public policy exception to the employment-at-will doctrine; however, that court declined to definitively decide the question of whether the public policy exception would give rise to a cause of action in Ohio for wrongful discharge. West v. Roadway Express, Inc. (1982), 8 O.B.R. 155, 161-165; motion to certify the record to the Supreme Court overruled. This court had not yet been faced with a factual background which would give rise to the application of the public policy exception to the employment-at-will doctrine. Thus, it appears that this case is one of first impression for Ohio appellate courts.


Appellant's assignment of error questions whether an employer has a completely unlimited right to terminate the employment of an at-will employee. Generally speaking, the rule in Ohio is that an at-will employment relationship, by its own terms, is terminable at the will of either the employer or employee. West, supra, at 161. This court has recognized and followed the general rule in Peterson v. Scott Constr. Co. (1982), 5 Ohio App.3d 203, 205, 451 N.E.2d 1236, wherein we stated that at-will employees "can be terminated at will for any cause, at any time whatsoever, even if done in gross or reckless disregard of an employee's rights." Id.

Intermediate appellate courts and the trial courts of this state repeatedly rely upon a trilogy of Supreme Court cases for the general proposition regarding the termination of the at-will employee. These cases are Fawcett v. G.C. Murphy & Co. (1976), 46 Ohio St.2d 245; Henkel v. Educational Research Council (1976), 45 Ohio St.2d 249; and Anderson v. Minter (1972), 32 Ohio St.2d 207.

The first decided case in the trilogy is Minter, supra, wherein the Supreme Court held that a complaint filed in common pleas court by a civil service employee, wherein the civil servant sought to test the legality of a suspension order for five or less days, did not state a cause of action upon which relief could be granted. Minter, supra, at 212. Essentially, the Minter court held that R.C. 143.27, the applicable statute in that case, did not provide an "independent action" to test whether cause existed for a suspension of five or less days. Id.

Also in Minter, the plaintiff alleged a cause of action wherein the plaintiff sought recovery from her supervisor for tortious interference with her employment. Plaintiff based this cause of action on certain factual allegations wherein the plaintiff averred that her supervisor maliciously induced her suspension. Id., at 213. The court held that even if the supervisor's actions were malicious, plaintiff did not have a cause of action against the supervisor, as the supervisor's acts of which plaintiff complained were within the scope of the supervisor's duties and, therefore, unactionable. Even though plaintiff characterized her supervisor's actions as malicious, the Supreme Court stated that "[m]alice makes a bad case worse, but does not make wrong that which is lawful." Id.

The essence of the Minter holding is twofold: R.C. 143.27 does not provide a civil servant with an independent cause of action; and where a civil service supervisor's actions are otherwise lawful, the fact that they may be malicious does not transform them from lawful and unactionable to unlawful and actionable. The Minter court never suggested that at-will employees do not have a cause of action for wrongful discharge when their discharge violates public policy. Rather, the Minter court's holding was quite narrow, applying specifically to R.C. 143.27 and a civil service supervisor's otherwise lawful activities.

Nor does the court's decision in Henkel, supra, which is the second case in the trilogy, support the proposition that a cause of action for wrongful discharge does not lie where the facts indicate that an employee's discharge was in violation of public policy. The holding of the Henkel court is pointedly stated in the court's syllabus:

"In the absence of facts and circumstances which indicate that the agreement is for a specific term, an employment contract which provides for an annual rate of compensation, but makes no provision as to the duration of the employment, is not a contract for one year, but is terminable at will by either party."

In Henkel, supra, plaintiff filed a complaint alleging that her termination violated the contract which she had entered into with defendant. The contract at issue in Henkel provided for an annual rate of compensation, but did not specifically provide for the duration of the employment term. Plaintiff argued that the annual compensation figure necessitated an employment duration term of one year. The Supreme Court, however, held otherwise.

The Henkel court held that absent an agreement setting forth the duration of the employment term, plaintiff's employment was terminable at will by either the employer or employee. Plaintiff's action was brought in terms of breach of the contracted for term of employment. The Henkel court held, however, that no agreed upon term of employment existed which could have been breached. The Henkel court held that...

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