Rackley v. Fairview Care Centers, Inc.

• Decision Date: 17 December 1998
• Docket Number: No. 971213-CA,971213-CA
• Citation: 970 P.2d 277
• Parties: 14 IER Cases 1186, 358 Utah Adv. Rep. 45 Cathleen L. RACKLEY, Plaintiff and Appellee, v. FAIRVIEW CARE CENTERS, INC., a Utah corporation, Defendant and Appellant.
• Court: Utah Court of Appeals

Page 277

970 P.2d 277

14 IER Cases 1186, 358 Utah Adv. Rep. 45

Cathleen L. RACKLEY, Plaintiff and Appellee, v. FAIRVIEW CARE CENTERS, INC., a Utah corporation, Defendant

and Appellant.

No. 971213-CA.

Court of Appeals of Utah.

Dec. 17, 1998.

C. Danny Quintana, Danny Quintana & Associates, P.C., Salt Lake City, for Appellant.

Peter C. Collins and Tara L. Isaacson, Bugden Collins & Morton, Salt Lake City, for Appellee.

Before DAVIS, P.J., and WILKINS, Associate P.J., and GREENWOOD, J.

OPINION

DAVIS, Presiding Judge:

Defendant Fairview Care Centers, Inc. (Fairview) appeals the trial court's judgment in favor of plaintiff Cathleen L. Rackley. We reverse. ¹

FACTS

Fairview is a family-owned nursing care operation consisting of two care facilities. Rackley managed the Fairview "West" facility from November 1993 through February 1994. During her tenure at Fairview, Rackley made numerous suggestions to Joseph Peterson, an owner and general manager of Fairview, regarding Fairview's compliance with federal and state law and other work-related issues. While not all of Rackley's suggested changes were received favorably by Peterson, many were implemented nonetheless.

In February 1994, Rackley discovered that Karleen Merkley, the Fairview manager responsible for resident funds, had instructed the Fairview staff not to tell resident Muriel Mellen that a $720 check from the Veterans Administration had arrived. Merkley herself was so instructed by Sharon Mellen, Muriel's daughter-in-law who had been managing Muriel's financial affairs for many years since the death of Muriel's husband. ² Although Sharon had deposited Muriel's check into Muriel's personal bank account, she wanted to personally tell Muriel of its arrival in the hopes of convincing Muriel, an Alzheimers resident, that the money should be spent for the purchase of a wheelchair for her.

When Rackley discovered Muriel's check and the fact that Muriel had not yet been informed of its arrival, she took it upon herself to not only tell Muriel, but to also call Sharon at her place of employment to express her "concerns" about the impropriety of keeping the information from Muriel. Rackley did not take the initiative to tell Peterson, nor did she contact any outside authorities in an attempt to have the situation investigated. ³

Sharon was upset that, despite her instructions, Rackley had made a unilateral decision to tell Muriel about the check. ⁴ Sharon consequently called Peterson and told him what had happened. Peterson then met with Rackley, Merkley, and Sallie Maroney, the manager of the Fairview "East" facility. Both Maroney and Merkley received a written reprimand for failing to tell Muriel about the check. Peterson also instituted a new official policy requiring that residents be informed of all incoming funds, regardless of who is assisting them with their financial affairs.

Peterson also reprimanded Rackley and told her to call Sharon to apologize for the incident. However, after further thought, Peterson decided to terminate Rackley and called her into a meeting. While the testimony is conflicting as to whether Peterson had changed his mind and decided to keep Rackley as the Fairview "West" administrator, the trial court found that Peterson did, in fact, fire Rackley.

Rackley filed suit claiming she was wrongfully discharged by Fairview in violation of public policy. After a bench trial, the trial court ruled that "[d]efendant's said termination of plaintiff's employment implicated a clear and substantial public policy, to wit: the right of the residents of defendant's Salt Defendant unlawfully terminated the employment of plaintiff in violation of the public policy of the State of Utah, including but not limited to the clear and substantial public policy considerations set forth in the following:

                Lake City west side facility (including resident Muriel Mellen) to be informed of the fact that resident personal monies had arrived at the facility." 5  The trial court further determined that "[d]efendant violated that public policy by, in terminating plaintiff's employment, punishing plaintiff for engaging in conduct furthering that policy." 6  The trial court then concluded that
                

Article I, Section 1 of the Utah Constitution[;]

Article I, Section 27 of the Utah Constitution[;]

42 U.S.C. §§ 3058g(a)(3) and (5)[;]

Utah Code Ann. §§ 62A-3-201, et seq.[;]

42 U.S.C. § 1396[r(c)(6) ⁷;]

Utah Admin. Code § R432-150-4[; and]

42 C.F.R. § 483.10[ ⁸

Fairview appeals the trial court's legal conclusion that a clear and substantial public policy exists supporting Rackley's wrongful discharge claim. ⁹

ISSUE AND STANDARD OF REVIEW

Fairview argues the trial court erred by concluding that a clear and substantial public policy exists that a nursing home resident must be immediately notified by a care facility employee of personal funds arriving at the nursing facility. ¹⁰ Whether a clear and substantial public policy exists supporting a wrongful discharge claim based on an employer's violation of that policy is a question of law. We review questions of law for correctness, giving no deference to the trial court's legal conclusion. See Ryan v. Dan's Food Stores, Inc., 350 Utah Adv. Rep. 3, 3, 972 P.2d 395, 399-400 (Utah 1998); Retherford v. AT & T Communications, 844 P.2d 949, 958 (Utah 1992).

ANALYSIS

It is well established Utah law that an employment relationship is presumptively at-will. See Ryan, 350 Utah Adv. Rep. at 4, 972 P.2d at 400-02; Fox v. MCI Communications Corp., 931 P.2d 857, 859 (Utah 1997); Retherford, 844 P.2d at 958; see generally Berube v. Fashion Centre, Ltd., 771 P.2d 1033, 1041 (Utah 1989). The atwill presumption "allows both the employer and the employee to terminate the employment for any reason and allows the employer to do so without extending any procedural safeguards The at-will presumption is not conclusive, however.

to an employee, except as required by law." Fox, 931 P.2d at 859.

An at-will employee may overcome th[e at-will] presumption by demonstrating that (1) there is an implied or express agreement that the employment may be terminated only for cause or upon satisfaction of another agreed-upon condition; (2) a statute or regulation restricts the right of an employer to terminate an employee under certain conditions; or (3) the termination of employment constitutes a violation of a clear and substantial public policy.

Id. (footnotes omitted). Here, Rackley argues that, by discharging her for telling Muriel about the Veterans Administration check, Fairview fired her in violation of a clear and substantial public policy.

To succeed on a wrongful discharge claim based on a violation of public policy, a party must satisfy a four-prong test. The "employee must show: (i) that his employer terminated him; (ii) that a clear and substantial public policy existed; (iii) that the employee's conduct brought the policy into play; and (iv) that the discharge and the conduct bringing the policy into play are causally connected." Ryan, 350 Utah Adv. Rep. at 6, 972 P.2d at 404 (footnote omitted). For purposes of this appeal, Fairview concedes that Rackley was terminated. Thus, we move on to the second prong, whether there was a clear and substantial public policy that nursing home residents have the right to be informed of personal monies arriving at the facility.

Our supreme court has repeatedly underscored the fact that "only clear and substantial public policies will support a claim of wrongful discharge in violation of public policy." Id.; accord Peterson v. Browning, 832 P.2d 1280, 1282 (Utah 1992) ("[W]e hold that the public policy exception applies in this state when the statutory language expressing the public conscience is clear and when the affected interests of society are substantial."); Berube, 771 P.2d at 1043 ("We also stress that actions for wrongful termination based on this exception must involve substantial and important public policies."). Additionally, "[t]his court ... will narrowly construe the public policies on which a wrongful termination action may be based." Peterson, 832 P.2d at 1282. A narrow interpretation will "avoid unreasonably eliminating employer discretion in discharging employees." Ryan, 350 Utah Adv. Rep. at 6, 972 P.2d at 405.

"[N]ot every employment termination that has the effect of violating some public policy is actionable." Fox, 931 P.2d at 860. "[E]ven those principles which are widely held values may not be sufficient to justify wrongful termination recovery." Berube, 771 P.2d at 1043. Furthermore, this court "will appl[y] only those [public policy] principles which are so substantial and fundamental that there can be virtually no question as to their importance for promotion of the public good." Id.

"A public policy is 'clear' only if plainly defined by legislative enactments, constitutional standards, or judicial decisions." Ryan, 350 Utah Adv. Rep. at 6, 972 P.2d at 405. Whether a public policy is substantial is determined "by 'examin[ing] the strength of the policy as well as the extent to which it affects the public as a whole' and by determining whether we would allow an employer and an employee to nullify the policy by express agreement." Id. at 7, 972 P.2d at 406 (quoting Retherford, 844 P.2d at 966 n. 9).

"Legitimate reliance on a public policy exception to the at-will rule requires an attempt to identify the proper sources of public policy and the principles which underlie it." Berube, 771 P.2d at 1042-43. Public policies may be found in legislative enactments, judicial pronouncements, or the constitution. See Ryan, 350 Utah Adv. Rep. at 6, 972 P.2d at 405; Berube, 771 P.2d at 1043. Here, the trial court relied on the following in support of its conclusion that a clear and substantial public policy existed: "Article I, Section 1 of the Utah Constitution[;] Article I, Section 27 of the Utah Constitution[;] 42 U.S.C. §§ 3058g(a)(3) and (5)[;] Utah Code Ann. §§ 62A-3-201, et seq. ...