Schmitz v. U.S. Steel Corp.

• Citation: 831 N.W.2d 656
• Decision Date: 06 August 2013
• Docket Number: No. A12–0709.,A12–0709.
• Parties: Darrel SCHMITZ, Respondent, v. UNITED STATES STEEL CORPORATION, Appellant.
• Court: Court of Appeals of Minnesota

831 N.W.2d 656

Darrel SCHMITZ, Respondent,

v.UNITED STATES STEEL CORPORATION, Appellant.

No. A12–0709.

Court of Appeals of Minnesota.

May 13, 2013.

Review Granted Aug. 6, 2013.

Syllabus by the Court

1. Minn.Stat. § 176.82, subd. 1 (2012), of the Minnesota Workers' Compensation Act provides a cause of action for threatening to discharge an employee for seeking workers' compensation benefits that is independent of claims for retaliatory discharge and intentional obstruction of benefits.

2. A claim for threatening to discharge an employee for seeking workers' compensation benefits in violation of Minn.Stat. § 176.82, subd. 1, requires the plaintiff to show that a person, with knowledge that the plaintiff may have suffered a workplace injury, attempted to dissuade the plaintiff from seeking workers' compensation benefits through one or more communications that created a reasonable apprehension of discharge and caused the plaintiff to delay or cease seeking benefits.

3. Under basic agency principles, an employer is vicariously liable for the actions of a supervisor who threatens to discharge an employee for seeking workers' compensation benefits in violation of Minn.Stat. § 176.82, subd. 1.

4. A claim alleging retaliatory discharge in violation of Minn.Stat. § 176.82, subd. 1, seeking only money damages, sounds in tort and is therefore an action at law with an attendant right to a jury trial under the Minnesota Constitution.

5. A party is not entitled to a jury trial on a refusal-to-offer-continued-employment claim under Minn.Stat. § 176.82, subd. 2 (2012).

Michelle Dye Neumann, Phillip M. Kitzer, Halunen & Associates, Minneapolis, MN, for respondent.

Douglas R. Christensen, Marilyn Clark, Dorsey & Whitney LLP, Minneapolis, MN; and Rodney M. Torbic (pro hac vice), United States Steel Corporation, Pittsburgh, PA, for appellant.

Considered and decided by HUDSON, Presiding Judge; STONEBURNER, Judge; and KIRK, Judge.

OPINION

HUDSON, Judge.

Following a court trial, appellant U.S. Steel challenges the district court's judgment awarding respondent Darrel Schmitz $15,000 in damages, as well as reasonable attorney fees and costs, for threatening to discharge Schmitz for seeking workers' compensation benefits in violation of Minn.Stat. § 176.82, subd. 1, but finding for U.S. Steel on Schmitz's retaliatory-discharge and refusal-to-offer-continued-employment claims brought under Minn.Stat. § 176.82, subds. 1, 2. U.S. Steel argues that the district court erred (1) in holding U.S. Steel liable for threatening to discharge Schmitz in violation of Minn.Stat. § 176.82, subd. 1; (2) in concluding that the employer's conduct does not have to be cruel or venal for a plaintiff to recover on a threat-to-discharge claim; (3) by declining to analyze Schmitz's threat-to-discharge claim using the McDonnell Douglas burden-shifting framework; (4) by not allowing U.S. Steel to assert a Faragher–Ellerth affirmative defense to liability for supervisor wrongdoing; and (5) in awarding respondent $203,112.50 in attorney fees. In his cross-appeal, Schmitz argues that the district court denied his constitutional right to a jury trial and clearly erred by finding for U.S. Steel on his retaliatory-discharge claim.

Because Minn.Stat. § 176.82, subd. 1, provides a cause of action for threatening to discharge an employee for seeking workers' compensation benefits, and because the district court did not err in concluding that U.S. Steel violated the statute, we affirm the district court's judgment on that claim. Additionally, because a claim alleging retaliatory discharge in violation of Minn.Stat. § 176.82, subd. 1, seeking only money damages, sounds in tort and is therefore an action at law with an attendant right to a jury trial under the Minnesota Constitution, we reverse the district court's judgment on that claim and remand for a jury trial. Finally, we affirm the district court's judgment for U.S. Steel on Schmitz's refusal-to-offer-continued-employment claim under Minn.Stat. § 176.82, subd. 2, because Schmitz was not entitled to a jury trial on that claim.

FACTS

Plaintiff Darrel Schmitz was employed by U.S. Steel as a maintenance mechanic at its iron-ore facility in Keewatin. In October 2006, Schmitz worked on the “mill crew” and was supervised by Michael Bakk, who in turn was supervised by Larry Sutherland, the facility's area manager.

On October 23, 2006, Schmitz allegedly injured his back at work. Schmitz claims that he reported the injury to Bakk and went home after his shift. Schmitz did not file an accident report that day; filing an accident report is the first step in filing a workers' compensation claim.

The next morning, October 24, 2006, Schmitz called Bakk to tell him that his back and side felt strange, but because of the noise in the facility, Bakk could not hear Schmitz and informed Schmitz that he would call him back later. Later that day, Bakk and Sutherland called Schmitz at home. According to Schmitz, Sutherland informed Schmitz that U.S. Steel would take a “very dim view” of Schmitz if he were to file an accident report. Schmitz testified that he then asked Sutherland,“What are they going to do, fire me?” Schmitz testified that Sutherland responded, “Without having to perjure [myself], yes.” Schmitz testified that this conversation led him to believe that he would be fired if he filed an accident report.

Later on October 24, Schmitz had a doctor's appointment regarding his back. The physician's notes from that visit state, “51–year old presents with lower back discomfort and pain with some spasm since last evening around 10 o'clock when he was moving a heavy object at work. Patient adamantly refuses to put this under workman's comp because of other issues that have been going on there.” U.S. Steel provided Schmitz with accommodations when he returned to work on October 26, 2006, with no medical restrictions placed upon his work-related duties. Schmitz never filed an accident report concerning his October 23, 2006 injury.

Schmitz injured his back at home on December 28, 2006. Schmitz was unable to return to work following that injury, and was placed on paid sickness and accident leave. In April 2007 he filed a workers' compensation claim, asserting that his inability to work resulted from his October 23, 2006 workplace injury. The claim was denied one year later on multiple grounds, one of which was Schmitz's failure to provide notice to U.S. Steel of his injury. After undergoing back surgery, in October 2007 Schmitz was authorized to return to light-duty work with several activity restrictions. No position was found for him, however, and Schmitz has not worked at U.S. Steel since January 2007.

In May 2008, Schmitz filed a complaint asserting claims of (a) retaliatory discharge for seeking workers' compensation benefits in violation of Minn.Stat. § 176.82, subd. 1, (b) refusing to offer continued employment in violation of Minn.Stat. § 176.82, subd. 2, and (c) disability discrimination in violation of the Minnesota Human Rights Act (MHRA), Minn.Stat. §§ 363A.01–.41 (2006). The district court granted U.S. Steel's motion for summary judgment on all claims in February 2010. In December 2010, this court reversed the district court regarding Schmitz's claims under section 176.82. Schmitz v. U.S. Steel Corp., No. A10–633, 2010 WL 4941668 (Minn.App. Dec. 7, 2010). This court noted that “[a]ppellant has not raised a claim that Sutherland's threat, by itself, constitutes a per se violation of the workers' compensation laws resulting in respondent's liability,” but the statute explicitly prohibits threatening to discharge an employee for seeking workers' compensation benefits. Id. at *7. This court held that the alleged threat was evidence of retaliation that, in conjunction with other evidence on the record, could lead a rational fact-finder to conclude that Schmitz was discharged in retaliation for seeking workers' compensation benefits. Id. at *7–8.

Upon remand, U.S. Steel moved to quash Schmitz's demand for a jury trial, and the district court granted this motion. The district court also granted Schmitz's motion to amend the complaint to add a claim for threatening to discharge an employee for seeking workers' compensation in violation of Minn.Stat. § 176.82, subd. 1.

Following a three-day bench trial, the district court entered judgment for Schmitz on his threat-to-discharge claim, awarding $15,000 in emotional-distress damages, plus reasonable attorney fees and costs. The district court rejected Schmitz's retaliatory-discharge and refusal-to-offer-continued-employment claims, finding that Schmitz's activity restrictions frustrated U.S. Steel's ability to find a position for Schmitz after his injury.

U.S. Steel filed a motion to amend findings or for a new trial, and Schmitz filed a motion for attorney fees and costs. U.S. Steel argued that (1) the district court should not have recognized a separate cause of action under Minn.Stat. § 176.82, subd. 1, for threatening to discharge an employee for seeking workers' compensation benefits; (2) U.S. Steel was entitled to assert a Faragher/Ellerth affirmative defense to liability for the wrongdoing of a supervisor; (3) the district court should have applied the McDonnell Douglas burden-shifting framework to Schmitz's threat-to-discharge claim; and (4) Schmitz did not prove that U.S. Steel's conduct was cruel or venal. The district court denied U.S. Steel's motion.

The district court granted in part Schmitz's motion for attorney fees, awarding $203,112.50 in attorney fees, $100,000 less than Schmitz requested, and $9,448.58 in costs. This appeal follows.

ISSUES

I. Did the district court err by concluding that Minn.Stat. § 176.82, subd. 1, provides a cause of action for threatening to discharge an employee for seeking workers' compensation benefits that is independent of claims for retaliatory discharge and intentional obstruction of benefits?

II. Was Schmitz required to...