Simas v. First Citizens' Federal Credit Union

• Decision Date: 30 August 1999
• Docket Number: Civil Action No. 96-10073-RBC.
• Citation: 63 F.Supp.2d 110
• Parties: Victor E. SIMAS, Plaintiff, v. FIRST CITIZENS' FEDERAL CREDIT UNION, Barbara Silva, and Lisa Grace, Defendants.
• Court: U.S. District Court — District of Massachusetts

63 F.Supp.2d 110

Victor E. SIMAS, Plaintiff, v. FIRST CITIZENS' FEDERAL CREDIT UNION, Barbara Silva, and Lisa Grace, Defendants.

Civil Action No. 96-10073-RBC.

United States District Court, D. Massachusetts.

August 30, 1999.

COPYRIGHT MATERIAL OMITTED

Philip N. Beauregard, Beauregard & Burke, New Bedford, MA, for plaintiff.

Michael P. Duffy, Harvey Weiner, Peabody & Arnold LLP, Boston, MA, for defendants.

FURTHER MEMORANDUM AND THIRD ORDER ON DEFENDANTS, FIRST CITIZENS' FEDERAL CREDIT UNION, BARBARA SILVA AND LISA GRACE'S MOTION FOR SUMMARY JUDGMENT (# 26)

COLLINGS, Chief United States Magistrate Judge.

I. Introduction

In an earlier decision in this case I granted the defendants' Motion for Summary Judgment on the plaintiff's sole federal claim of constructive discharge and discrimination in violation of Title 12 U.S.C. § 1790b, a federal whistleblower statute relating to federal credit unions, and further declined to exercise supplemental jurisdiction over the remaining state law claims. See Simas v. First Citizens' Federal Credit Union, 996 F.Supp. 76 (D.Mass., 1998).¹ On appeal, however, the First Circuit vacated that judgment and "remanded [the case] for further proceedings consistent with [its] opinion." Simas v. First Citizens' Federal Credit Union, 170 F.3d 37, 52 (1 Cir., 1999). With the federal claim now reinstated, the arguments advanced in support of the dispositive motion with respect to the state law claims must be addressed.

II. Background

Plaintiff Victor Simas (hereinafter "Simas") was employed by defendant First Citizens' Federal Credit Union (hereinafter "First Citizens") from 1983 to May 3, 1994. At all relevant times he served as vice-president of collections and credit at the financial institution. Defendant Barbara M.W. Silva (hereinafter "Silva"), who held the positions of Chief Operating Officer and President of First Citizens, was Simas' supervisor. The third defendant named in the complaint was Lisa A. Grace (hereinafter "Grace"), a senior vice-president of First Citizens.

Simas has delimited the extant claims in his complaint in that he only opposes defendants' motion for summary judgment on his claim under 12 U.S.C. § 1790b as to Defendant First Citizens, on his claim for wrongful termination as to Defendant First Citizens, on his claim for tortious interference as to Defendant Silva, and on his claim for defamation as to Defendants First Citizens and Silva. (Plaintiff's Opposition To Defendants' Motion For Summary Judgment (# 34) at 1) In other words, the remaining state law claims in this action are: (1) wrongful termination against First Citizens (Count I); (2) defamation against First Citizens and Silva (Count II); and (3) tortious interference with an advantageous relationship against Silva (Count VI). Moreover, the practical effect of Simas' statement that he "does not oppose Defendants' motion as to his remaining claims[,]" is that Grace is entitled to the entry of judgment in her favor as a matter of law on all claims alleged against her. Id. at 1-2.

Briefly recapping the highlights of the First Circuit decision, in his lone federal claim Simas alleges that he was constructively discharged and discriminated against by his employer First Citizens in violation of the whistleblower provision of the Federal Credit Union Act which provides that:

No insured credit union may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee ... provided information to the [National Credit Union Administration (NCUA)] Board ... regarding any possible violation of any law or regulation by the credit union or any director, officer, or employee of the credit union.

Title 12 U.S.C. § 1790b(a)(1).

For a plaintiff to prove a case of retaliation in violation of this statute, it must be established that

(1) the claimant engaged in the protected activity (e.g., filed a complaint or reported information to the government); (2) the defendants subjected the claimant to some materially adverse employment action; and (3) a causal connection existed between the protected activity and the adverse action.

Simas, 170 F.3d at 44 (citations omitted).

In the instant case, First Citizens does not dispute whether Simas contacted the NCUA; rather, the contention is that the credit union was unaware he had in fact done so and, consequently, § 1790b should not apply. Id. at 45. The Court of Appeals concluded that genuine issues of material fact exist on the question, however, pointing out that it was undisputed Silva knew in the Fall of 1993 that Simas had threatened to contact the NCUA about the Xifaras loan; there was no evidence anyone else at First Citizens had made similar threats; and third, the Xifaras loan documents were examined at unusual length by NCUA officials in January, 1994.² Simas, 170 F.3d at 45. Based on these factors, the First Circuit determined that a jury could have concluded Silva made the connection that Simas was indeed the whistleblower. Id.

On the second element, Simas must show that First Citizens engaged in either of the following activities:

(1) an actual or constructive `discharge'; or (2) other `discriminat[ion] ... with respect to compensation, terms, conditions, or privileges of employment' short of discharge, or what we have sometimes labeled `adverse employment actions.'

Simas, 170 F.3d at 46 (quoting 12 U.S.C. § 1790(a)(1)).

The test to determine whether an individual suffered a constructive discharge is whether the "working conditions [were] so intolerable [] that a reasonable person would feel compelled to forsake his job rather than to submit to looming indignities." Id. (quoting Vega v. Kodak Caribbean, Ltd., 3 F.3d 476, 480 (1 Cir., 1993)). The First Circuit did not determine if the plaintiff made out a case of constructive discharge, but rather rested its decision upon the "adverse employment actions" showing. Simas, 170 F.3d at 47.

The alleged abuses endured by Simas were assessed to be potentially "more than minor slights."³ Id. at 46. In addition, the Court observed that "otherwise minor slights, relentlessly compounded, may become sufficiently `adverse' to warrant relief under the FCUA." Id. at 48. The First Circuit directs attention to Silva's animus toward Simas when he threatened to approach the NCUA as more than subtle evidence that Silva looked disfavorably upon Simas' whistleblowing actions. Silva threatened to fire Simas if he continued to make "`unwarranted charges or threats [to report his suspicions to the NCUA].'" Id. at 48. "So construed, these direct retaliatory expressions by Silva could be considered materially adverse employment actions which sufficed to preclude summary judgment for defendants." Id. Such conduct is exactly what was to be targeted by the whistleblower provision: "Congress intended that section 1790b deter federal credit unions from expressly dissuading their employees in exercising the statutory right to report suspected regulatory violations." Id.

III. The Remaining State Law Claims

Simas alleges in Count I that he was wrongfully terminated by First Citizens "in violation of public policy" in that "[defendant's] true reason for constructively discharging Mr. Simas was in retaliation for his conduct and whistleblowing." (Complaint ¶ 27) Once again the argument is interposed that the credit union was not aware that Simas had contacted the NCUA and consequently could not have engaged in adverse employment actions that would have caused the plaintiff to resign from his employment.

Massachusetts does not have a statute that protects a private-sector employee who engages in whistleblowing activity and is then terminated by an employer in retaliation.⁴ Furthermore, it is well established in the Commonwealth that at-will employees can be terminated for any reason or no reason at all. See, e.g., Folmsbee v. Tech Tool Grinding & Supply, 417 Mass. 388, 394, 630 N.E.2d 586, 590 (1994); Smith v. Mitre Corp., 949 F.Supp. 943, 948 (D.Mass., 1997). There is a dearth of evidence in the record to suggest that Simas was anything but an at-will employee and, in fact, Simas does not assert otherwise.

The plaintiff's claim for wrongful termination rests on an exception to the general at-will employment rule: employers may not terminate their employees if such action is in violation of public policy. See Flesner v. Technical Communications Corp., 410 Mass. 805, 810, 575 N.E.2d 1107, 1110 (1991); DeRose v. Putnam Management Co., Inc., 398 Mass. 205, 208-09, 496 N.E.2d 428, 430-31 (1986); Mitre, 949 F.Supp. at 948. Whether there is a sufficiently defined public policy is a matter of law for the Court to determine. See Mitre, 949 F.Supp. at 949; Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 472, 589 N.E.2d 1241, 1243 (1992) (whether employee was terminated in violation of public policy by retaliatory employer was a question of law for the Court). "It is not for the jury to define the public policy. The judge must determine whether, on the evidence, there is a basis for finding that a well-defined, important public policy has been violated." Mello v. Stop & Shop Companies, Inc., 402 Mass. 555, 561, n. 7, 524 N.E.2d 105, 108, n. 7 (1988). Nonetheless, the Supreme Judicial Court "consistently has interpreted the public policy exception narrowly, reasoning that to do otherwise would `convert the general rule ... into a rule that requires just cause to terminate an at-will employee.'" King v. Driscoll, 418 Mass. 576, 582, 638 N.E.2d 488, 492 (1994) (quoting Smith-Pfeffer v. Superintendent of the Walter E. Fernald State Sch., 404 Mass. 145, 150, 533 N.E.2d 1368, 1371 (1989)).

A federal statute, such as 12 U.S.C. § 1790b, can be the basis for the public policy exception needed to make a claim of wrongful termination under Massachusetts law. Not all federal statutes, though, give rise to state public policy exceptions. See ...