Trusz v. Ubs Realty Investors, LLC

• Citation: 319 Conn. 175,123 A.3d 1212
• Decision Date: 13 October 2015
• Docket Number: No. 19323.,19323.
• Court: Supreme Court of Connecticut
• Parties: Richard TRUSZ v. UBS REALTY INVESTORS, LLC, et al.

319 Conn. 175

123 A.3d 1212

Richard TRUSZ

v.UBS REALTY INVESTORS, LLC, et al.

No. 19323.

Supreme Court of Connecticut.

Argued March 24, 2015.

Decided Oct. 13, 2015.

Wesley W. Horton, with whom were Todd Steigman, Karen L. Dowdand, on the brief, Jacques J. Parenteau, Hartford, for the appellant (plaintiff).

James A. Wade, Hartford, with whom were Brett J. Boskiewiczand, on the brief, Thomas J. Donlon, Stamford, for the appellees (defendants).

Sandra J. Staub, David J. McGuire and Martin B. Marguliesfiled a brief for the American Civil Liberties Union of Connecticut as amicus curiae.

Charles Krich, principal attorney, and Jane Kelleher, law student intern, filed a brief for the Commission on Human Rights and Opportunities as amicus curiae.

Daniel A. Schwartz, Hartford, Christopher T. Parkinand Clarisse N. Thomas, Stamford, filed a brief for Connecticut Business and Industry Association, Inc., as amicus curiae.

Opinion

PALMER, J.

This case comes before us on certification from the United States District Court for the District of Connecticut pursuant to General Statutes § 51–199b. The certified question that we must answer is: “Does the rule announced by the [United States] Supreme Court in Garcetti v. Ceballos,547 U.S. 410, [421, 126 S.Ct. 1951, 164 L.Ed.2d 689] (2006), i.e., ‘that when ... employees make statements pursuant to their official duties, the employees are not speaking as citizens for [f]irst [a]mendment purposes, and the [c]onstitution does not insulate their communications from employer discipline,’ apply to a claim that an employer violated [General Statutes] § 31–51q¹by subjecting an employee ‘to discipline or discharge on account of the exercise by such employee of rights guaranteed by ... [§§] 3, 4 or 14 of article first of the [c]onstitution of the state ....?” (Footnote added.) We conclude that the answer to this question is “no.” We further conclude that a modified form of the Pickering/Connickbalancing test applies to speech by a public employee pursuant to the employee's official duties under the state constitution; see Connick v. Myers,461 U.S. 138, 142, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983)(in determining scope of public employee's constitutional right to free speech in workplace, court's task is to seek “a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the [s]tate, as an employer, in promoting the efficiency of the public services it performs through its employees” [internal quotation marks omitted] ); Pickering v. Board of Education,391 U.S. 563, 568, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968)(same); and that § 31–51qextends the same protection to similar speech by a private employee. Specifically, we conclude that, under the state constitution, employee speech pursuant to official job duties on certain matters of significant public interest is protected from employer discipline in a public workplace, and § 31–51qextends the same protection to employee speech pursuant to official job duties in the private workplace.

The District Court's certification order sets forth the following facts that we accept as true for purposes of responding to the certified question. “[The defendant UBS Realty Investors, LLC (UBS Realty) ] provides real estate investment management services to clients, such as pension funds, public employee retirement systems, foundations, and private investors. UBS Realty is registered with the Securities and Exchange Commission as an investment advisor. UBS Realty is a subsidiary of [the defendant] UBS AG²and is part of UBS AG's [g]lobal [a]sset [m]anagement division. UBS AG is a corporation whose stock is publicly traded on the New York Stock Exchange.

“At all times pertinent to this action, the plaintiff, Richard Trusz, was the head of UBS Realty's valuation unit and a [m]anaging [d]irector of UBS Realty. As head of the valuation unit, [the plaintiff] managed the process which ultimately resulted in the valuation of properties held in UBS Realty's private real estate investment funds. In early 2008 [the plaintiff] reported to UBS Realty management what he contended were errors in the valuation of certain properties held by UBS Realty in various investment funds. At that time [the plaintiff] also expressed to UBS Realty management his opinions that UBS Realty was obligated to correct and disclose to investors the valuation errors, that UBS Realty was obligated to return to investors any excess management fees received as a result of the valuation errors, that the valuation unit had insufficient staff and resources to adequately perform its function, that UBS Realty's internal controls regarding valuation were inadequate, that UBS Realty improperly provided preferential treatment to certain investors, and that UBS Realty was breaching fiduciary duties it owed to its investors.

“UBS Realty's compliance officer subsequently investigated [the plaintiff's] contentions. Although the report issued at the conclusion of this investigation confirmed the valuation errors reported by [the plaintiff], it concluded that none of the errors rose to a level that required UBS Realty to restate the values to its investors or return any management fees that had been paid by investors. A third-party auditor for some of the funds managed by UBS Realty also investigated [the plaintiff's] claims of valuation errors. The auditor confirmed valuation errors, but concluded that these errors were not material to the funds' financial statements and did not require a restatement of any of the financial statements for the funds.

“[The plaintiff] disagreed with the conclusions of the compliance officer and the third-party auditor and continued to express to both UBS Realty and UBS AG his opinion that by not disclosing property valuation errors to investors and not adjusting management fees in light of these valuation errors, UBS Realty was violating its fiduciary, legal, and ethical obligations to its investors.

“[The plaintiff] subsequently filed discrimination and retaliation complaints with the Connecticut Commission on Human Rights and Opportunities, the United States Equal Employment Opportunity Commission, and the United States Occupational Safety and Health Administration. [The plaintiff] claimed that UBS Realty discriminated against him based on a disability—a heart condition—and later retaliated against him by taking adverse employment actions, culminating in his termination in August, 2008, because he opposed what he believed was unlawful activity by the defendants and because he had reported alleged securities laws violations. The defendants dispute [the plaintiff's] allegations of unlawful activity. [The plaintiff] sued [the defendants] in federal court in 2009.” (Footnote added.) The plaintiff alleged, among other things, that the defendants had violated § 31–51qby subjecting him to discipline “on account of the exercise ... of rights guaranteed by ... [§§] 3, 4 or 14 of article first of the [c]onstitution of Connecticut.”

Thereafter, the defendants filed a motion for summary judgment contending that they were entitled to judgment as a matter of law on the plaintiff's claim under § 31–51q.³Before the court, Squatrito, J.,⁴could rule on that motion, this court issued its decision in Schumann v. Dianon Systems, Inc.,304 Conn. 585, 598, 43 A.3d 111 (2012), in which we concluded that the United States Supreme Court's decision in Garcetti,holding that speech pursuant to a public employee's official job duties was not protected by the first amendment; Garcetti v. Ceballos,supra, 547 U.S. at 421, 126 S.Ct. 1951(public employees who make statements pursuant to their official duties are not speaking as citizens for purposes of first amendment); applies to claims brought pursuant to § 31–51qagainst a private employer that are based on the first amendment. See Schumann v. Dianon Systems, Inc.,supra, at 598, 43 A.3d 111. In light of our decision in Schumann,the plaintiff filed in the District Court a motion for conference to discuss new authority in which he stated that he intended to argue that Garcettidid not apply to his retaliation claim because he was raising that claim under the state constitution.⁵The District Court asked the parties to submit briefs on the question of whether it should certify the issue raised by the plaintiff to this court. The defendants filed a brief contending that § 31–51qdid not apply because the plaintiff's workplace speech did not relate to matters of public concern and, therefore, was not constitutionally protected under either Garcettior the Pickering/Connickbalancing test.⁶The defendants also argued, however, that if the District Court were to determine that the plaintiff's speech did involve matters of public concern, it should certify the issue to this court. The plaintiff contended in his brief that the requirements for certification set forth in § 51–199bhad been met and the question of whether the Garcettistandard applies to the free speech provisions of the state constitution should be certified to this court, provided that doing so would not delay proceedings in the District Court. Thereafter, the District Court issued its order of certification to this court, and we accepted the question of law previously set forth in this opinion.⁷

To provide context for our resolution of the certified question, we briefly review the governing legal principles. “In Pickering v. Board of Education,[supra, 391 U.S. at 568, 88 S.Ct. 1731] ... the court ... recognized that a government has interests as an employer in regulating the speech of its employees that differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general. The court then set forth a general principle governing the constitutionality of government restrictions on the speech of its employees:

in evaluating the constitutionality of government restrictions on an employee's speech, a court must arrive at a...