Simpson County Steeplechase Ass'n, Inc. v. Roberts, s. 93-CA-1267-M

• Citation: 898 S.W.2d 523
• Decision Date: 14 April 1995
• Docket Number: Nos. 93-CA-1267-M,93-CA-1346-MR,s. 93-CA-1267-M
• Parties: 131 Lab.Cas. P 58,073 SIMPSON COUNTY STEEPLECHASE ASSOCIATION, INC. d/b/a Dueling Grounds Race Course and Dr. Arnold G. Pessin, Appellants/Cross-Appellees, v. Jackie ROBERTS, Darlene Liles, Susan Anthony, and Jerry Edwards, Appellees/Cross-Appellants.
• Court: Court of Appeals of Kentucky

Page 523

898 S.W.2d 523

131 Lab.Cas. P 58,073

SIMPSON COUNTY STEEPLECHASE ASSOCIATION, INC. d/b/a Dueling Grounds Race Course and Dr. Arnold G. Pessin Appellants/Cross-Appellees, v. Jackie ROBERTS, Darlene Liles, Susan Anthony, and Jerry Edwards, Appellees/Cross-Appellants.

Nos. 93-CA-1267-MR, 93-CA-1346-MR.

Court of Appeals of Kentucky.

April 14, 1995.

As Modified May 5, 1995.

Robert D. Wilkey, Janet Jobe Crocker, Franklin, for appellants/cross-appellees.

Herbert L. Segal, John Christopher Sanders, Louisville, for appellees/cross-appellants.

Before COMBS, GARDNER, and JOHNSTONE, JJ.

GARDNER, Judge:

Appellants, Simpson County Steeplechase Association, Inc. and Dr. Arnold Pessin (Pessin), appeal from a judgment of the Simpson Circuit Court awarding the appellees, former employees of Simpson County Steeplechase, compensatory and punitive damages based upon their alleged wrongful termination as a result of attending a meeting with Pari-Mutuel Clerks Union of Kentucky (Pari-Mutuel). The former employees have cross-appealed. After reviewing the record, this Court affirms.

Simpson County Steeplechase owns and operates the Dueling Grounds Race Course in Simpson County, Kentucky. Bradley Michael Shannon (Shannon) was the sole shareholder and director of the corporation. Pessin was employed by the corporation as a consultant and performed managerial duties at Dueling Grounds. Shannon stated that Pessin was authorized to hire and fire employees. The appellees were pari-mutuel clerks employed at Dueling Grounds. Ten of the clerks, in June 1991, discussed union representation with Pari-Mutuel. A meeting was set up for Monday, July 29, 1991. The clerks contended that Pessin learned of the meeting prior to its occurrence, and he made threatening and intimidating statements to them. As a result, the location of the meeting was changed. On the day following the meeting, eight of the ten clerks who had attended the meeting were "laid off" and were escorted out of Dueling Grounds. The other two employees were subsequently "laid off."

Shortly thereafter, nine of the clerks and Pari-Mutuel filed suit in circuit court seeking compensatory and punitive damages as well as injunctive relief. The circuit court denied the claims for injunctive relief, finding that they were not entitled to this as a matter of law. The case was tried before a jury, and a verdict was returned for the appellees. The jury awarded each appellee compensatory damages based upon lost wages and awarded $25,000 in punitive damages to each appellee. Pari-Mutuel was awarded $3,800 in compensatory damages. The court formally entered judgment on March 19, 1993.

Appellants filed a motion for a new trial, a motion to alter, amend, or vacate, and a motion for judgment notwithstanding the verdict. All post-trial motions were denied by the circuit court. Appellants have appealed, and the appellees have cross-appealed.

Appellants first argue that the circuit court erred in instructing the jury that punitive damages could be awarded against the defendants for wrongful discharge. They maintain that allowing recovery of punitive damages contravenes Kentucky's statutes and case law. After reviewing the evidentiary record, Kentucky law, and law from other jurisdictions, this Court has found no reversible error.

Kentucky Revised Statutes (KRS) 411.184 and 411.186 address punitive damages. Under KRS 411.184(1)(f), " '[p]unitive damages' includes exemplary damages and means damages, other than compensatory and nominal damages, awarded against a person to punish and to discourage him and others from similar conduct in the future." See Hensley v. Paul Miller Ford, Inc., Ky., 508 S.W.2d 759 (1974); Harrod v. Fraley, Ky., 289 S.W.2d 203, 205 (1956). Further, "[a] plaintiff shall recover punitive damages only upon proving, by clear and convincing evidence, that the defendant from whom such damages are sought acted toward the plaintiff with oppression, fraud or malice." KRS 411.184(2). The key element in deciding whether punitives are appropriate is malice or conscious wrongdoing. Fowler v. Mantooth, Ky., 683 S.W.2d 250, 252 (1984). Malice may be implied from outrageous conduct and need not be express so long as the conduct is sufficient to evidence conscious wrongdoing. Id.

In the instant case, this Court is presented with an issue of first impression, whether punitive damages should be awarded in a case where termination of an employee occurs because of union activity. KRS 336.130(1) and (2) provides,

(1) Employees may, free from restraint or coercion by the employers or their agents, associate collectively for self-organization and designate collectively representatives of their own choosing to negotiate the terms and conditions of their employment to effectively promote their own rights and general welfare. Employees, collectively and individually, may strike, engage in peaceful picketing, and assemble collectively for peaceful purposes.

(2) Neither employers or their agents nor employees or associations, organizations or groups of employees shall engage or be permitted to engage in unfair or illegal acts or practices or resort to violence, intimidation, threats or coercion.

KRS 446.070 provides that a person injured by the violation of any statute may recover from the offender such damages as he or she sustained by reason of the violation although a penalty or forfeiture is imposed for such violation.

The Kentucky Supreme Court in Pari-Mutuel Clerks' Union of Kentucky v. Kentucky Jockey Club, Ky., 551 S.W.2d 801 (1977), recognized that a civil action for damages exists in cases where employees are discharged in violation of KRS 336.130; however, the Court held that the statute does not permit injunctive relief. The opinion did not address punitive damages. In reaching its decision, the Court noted that there are few tactics available to an employer seeking to discourage association by its employees for the purpose of collective bargaining which are more coercive or intimidating than the discharge or threat of discharge of those employees pursuing that objective. Id., at 803. In Firestone Textile Co. Div., Firestone Tire and Rubber Co. v. Meadows, Ky., 666 S.W.2d 730 (1983), the Supreme Court also recognized an action for damages for the termination of an employee as a result of filing a workers' compensation claim.

There is somewhat of a split among courts in other jurisdictions regarding whether punitive damages are recoverable for wrongful termination based upon filing a workers' compensation claim or a similar reason. Generally, punitive damages have been allowed in actions for wrongful discharge of an at-will employee where the action has been based upon the claim that the discharge was in violation of public policy. Francis M. Dougherty, Annotation, Damages Recoverable For Wrongful Discharge of At-Will Employee, 44 A.L.R.4th 1131, 1138 (1986). Courts have reasoned that such a violation sounds in tort and that all damages including punitives are available. Id. Punitive damages are thus used as a deterrent. Id. See Lozier Corp. v. Gray, 624 So.2d 1034 (Ala.1993); Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980); Commodore Home Systems, Inc. v. Superior Court of San Bernardino County, 32 Cal.3d 211, 185 Cal.Rptr. 270, 649 P.2d 912 (1982); Murphy v. City of Topeka-Shawnee County Dept. of Labor Services, 6 Kan.App.2d 488, 630 P.2d 186 (1981); Reed v. Sale Memorial Hospital and Clinic, 698 S.W.2d 931 (Mo.App.1985); Potter v. Village Bank of New Jersey, 225 N.J.Super. 547, 543 A.2d 80 (1988); Hicks v. Tulsa Dynaspan, Inc., 695 P.2d 17 (Okla.App.1985); Borden, Inc. v. Guerra, 860 S.W.2d 515 (Tex.App.1993); Federal Express Corp. v. Dutschmann, 846 S.W.2d 282 (Tex.1993).

The Nevada court in Hansen v. Harrah's, 100 Nev. 60, 675 P.2d 394 (1984), a case involving discharging of employees due to filing workers' compensation claims, noted that punitive damages are appropriate where the conduct of the employer was malicious, oppressive or involved fraudulent conduct. The Illinois courts in Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978), and Midgett v. Sackett-Chicago, Inc., 105 Ill.2d 143, 85 Ill.Dec. 475, 473 N.E.2d 1280 (1984), held that punitive damages must be recoverable in cases involving termination after filing workers' compensation claims in order to dissuade such actions by employers. Recognition of a cause of action in tort where such employer conduct occurs, merely allows an employee an additional remedy in areas where strong public policies are involved. Midgett v. Sackett-Chicago, Inc., 473 N.E.2d at 1283.

The number of other state courts addressing the infringement on an employee's right to associate with a union is small. In Quinn v. Buchanan, 298 S.W.2d 413 (Mo.1957), certain employees were threatened and even fired for talking with a union. The court held that coercion against employees either to prevent or compel organizations is a violation of the employees' rights of free choice. ¹ The court recognized that a cause of action on the part of the employees existed and reversed and remanded the trial court's decision to dismiss the employees' action which included a claim for punitive damages. In Wetherton v. Growers Farm Labor Association, 275 Cal.App.2d 168, 79 Cal.Rptr. 543 (1969), the court recognized a cause of action for intimidation and threats by the employer to the employees not to join the union. The court noted that the claim sounds in tort and that such actions violate the statute and public policy.

In the instant case, the appellees presented evidence at trial which, if taken as true, shows a violation of KRS 336.130. There was evidence that the workers were threatened before they ever attended the meeting with Pari-Mutuel and that the ten employees who went to the meeting were subsequently dismissed. Such actions by an employer are clearly violative of public...