Walker v. State

• Citation: 367 Or. 761,484 P.3d 1035
• Decision Date: 08 April 2021
• Docket Number: CC 15CV02202 (SC S067211)
• Parties: Kyle K. WALKER, Petitioner on Review, v. STATE of Oregon, BY AND THROUGH the Semi-Independent State Agency, the OREGON TRAVEL INFORMATION COUNCIL, branded and doing business as the Oregon Travel Experience, Respondent on Review.
• Court: Supreme Court of Oregon

367 Or. 761

484 P.3d 1035

Kyle K. WALKER, Petitioner on Review,

v.STATE of Oregon, BY AND THROUGH the Semi-Independent State Agency, the OREGON TRAVEL INFORMATION COUNCIL, branded and doing business as the Oregon Travel Experience, Respondent on Review.

CC 15CV02202 (SC S067211)

Supreme Court of Oregon, En Banc.

Argued and submitted September 16, 2020.

April 8, 2021

Shayna M. Rogers, Garrett Hemann Robertson, PC, Salem, Oregon, argued the cause for petitioner on review. Luke W. Reese filed the briefs. Also on the briefs was Elizabeth L. Polay.

Denise G. Fjordbeck, Assistant Attorney General, Salem, argued the cause and filed the brief for respondent on review. Also on the brief were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

NAKAMOTO, J.

An employee who is fired from an at-will position may, in some cases, assert a common-law claim of wrongful discharge. In this case, plaintiff persuaded a jury that her public employer had wrongfully discharged her for blowing the whistle on what she reasonably believed to be her employer's violations of law. The trial court had denied her employer's motions for a directed verdict, and the court entered a judgment that awarded her damages on that claim. The Court of Appeals reversed, holding that, notwithstanding the jury verdict in her favor, plaintiff's action had not served an important public policy. Walker v. Oregon Travel Information Council , 299 Or. App. 432, 450 P.3d 19 (2019).

We now reverse the Court of Appeals and remand the case to that court for further proceedings. The Court of Appeals incorrectly concluded that the threshold issue—whether plaintiff had identified an important public policy that permitted her to assert the tort of wrongful discharge—depended on whether she had reasonably believed that her employer had violated the law; instead, that threshold issue properly turns on sources of law that support the asserted public policy and whether those sources of law are tied to the acts by plaintiff that led her employer to discharge her. We further conclude that whether plaintiff had a reasonable belief that her employer had violated the law—the disputed element of whistleblowing on appeal—is a question of fact for the factfinder and that the record contains evidence that supports the jury's finding.

I. BACKGROUND

Plaintiff Kyle Walker, the chief executive officer of a semi-independent state agency, the Oregon Travel Experience, was fired by the agency's governing body, the Oregon Travel Information Council. She was an at-will employee, meaning that, generally, "in the absence of a contract or legislation to the contrary," the Council could discharge her "at any time and for any cause." Nees v. Hocks , 272 Or. 210, 216, 536 P.2d 512 (1975). Plaintiff filed an action against defendant "the State of Oregon, by and through * * * the * * * Council," and asserted two claims. One claim was for whistleblowing as a public employee, a statutory claim governed by ORS 659A.203(1).¹ The other was a common-law claim for wrongful discharge, a tort that this court recognized in Nees as protecting at-will employees who are discharged from employment for engaging in protected conduct.

Defendant's motions for a directed verdict on plaintiff's wrongful discharge claim are at issue on review. Accordingly, we review the evidence in the light most favorable to plaintiff, because the jury returned a verdict for her. Green v. Uncle Don's Mobile City , 279 Or. 425, 427, 568 P.2d 1375 (1977). We recite the facts consistently with that standard of review.

The Oregon Travel Experience (OTE) is a semi-independent agency responsible for blue roadway informational signs, historical marker signs, and rest areas along Oregon's highways. The Council, OTE's governing body, is composed of 11 volunteer members. The Council has the authority, according to its bylaws, to establish an Executive Committee, whose responsibilities include appointing the agency's CEO² and evaluating the CEO's performance. The CEO of OTE is responsible for the agency's day-to-day operations and serves "at the pleasure of the Council." ORS 377.835(7) (2013).³ The CEO is also in administrative control of the Council and is authorized to hire and set the salary for OTE's paid staff. Id. The CEO's salary, however, is under the exclusive authority of the Council according to its bylaws.

Three months before the Council appointed plaintiff as CEO in December 2012, the Secretary of State conducted an audit that determined that greater transparency and accountability was needed within the agency. An audit performed the previous year also recommended that the Council establish an employee classification and salary structure for staff. Plaintiff was hired to bring the agency into compliance with the Secretary of State's audit and to implement the audit's recommendations. According to her employment offer, the Council would not adjust plaintiff's salary during her first year as CEO.

Soon after plaintiff became CEO, conflict arose between her and the Council. Friction stemmed from plaintiff's attempt to fulfill the audit's recommendation to create a more objective salary structure for staff. The Council was concerned that OTE's management compensation was too high and that it was "top-heavy." Both plaintiff and the Council understood that salary adjustments had to be made from the "top-down"—meaning that plaintiff's salary, as CEO, would establish the benchmark for setting other staff salaries—but the parties disagreed on how to model a new salary structure. Plaintiff intended to rely on the Department of Administrative Services (DAS) "Hay" system salary range as a compensation model for OTE. However, as a semi-independent agency, OTE is not required to follow the DAS system salary range. Thus, the Council instructed plaintiff not to rely on the DAS system salary range as a compensation model and told her to develop a salary structure that complied with the Council's stated objectives and proposed budget instead.

Plaintiff disagreed with the Council's instruction and relied on the DAS system salary range as a model in proposing a new salary structure. She concluded that it was the best way to establish an objective salary scheme and to bring the agency's salary structure into compliance with the audit. She evaluated CEO compensation at other semi-independent state agencies to determine an appropriate "benchmark" CEO salary and provided her salary structure proposal to the Council in June 2013. The Council was unhappy with plaintiff's proposal. The Council believed that plaintiff's inclusion of an adjustment to her own salary, before the one-year mark of employment, was plaintiff's demand for a raise and a failure to accept the Council's authority to set her compensation. Plaintiff's view was that her proposal was not a demand for a raise, but rather that her salary was included in the report because it was used as a benchmark to inform the Council on how the remaining salaries would cascade down from her own as the highest.

In January 2014, plaintiff implemented the new staff salary structure without giving prior notice to the Council. Plaintiff had statutory authority under ORS 377.835(7) to implement the new salary structure without first garnering Council approval. That statute authorized the CEO to "fix the[ ] compensation" for staff. Despite her statutory authority, plaintiff had earlier agreed to share with the Council her changes to the initial salary proposal so that the Council could ensure that the salary changes conformed to the budget. The Council did not learn of the new salary structure implementation until mid-February.

Once the Council learned about the new staff salaries, the Council chair requested that plaintiff meet with the Executive Committee on March 12, 2014, to discuss plaintiff's actions regarding the salary structure. Before that meeting, plaintiff's executive assistant, at plaintiff's direction, asked the Oregon Department of Justice whether the meeting would be considered a public meeting and would require notice under Oregon's Public Meetings Law. An attorney with the Department of Justice advised that the meeting would need to be noticed, pursuant to ORS 192.630(1), as a meeting of the agency's governing body. Plaintiff's executive assistant then asked the Council chair whether the meeting should be noticed, and the Council chair told her that the meeting did not need to be noticed. Although plaintiff knew that it was her responsibility, as CEO, to provide notice of public meetings—and that the March 2014 meeting would be held in violation of Oregon's public meetings law—she did not want to defy the chair's instruction because she knew that she served "at the pleasure of the [C]ouncil" and feared that she already was at risk of being terminated at the meeting.

Plaintiff was not terminated at the March 2014 meeting; however, conflict regarding plaintiff's and the Council's respective roles and authority persisted. In light of the continued conflict, on April 8, 2014, plaintiff sent a memorandum to Michael Jordan, the chief operations officer of the State of Oregon and the head of DAS. As the state's chief operations officer, Jordan acted as the Governor's manager over Oregon's executive branch. In the memorandum, plaintiff detailed thirteen concerns that she had about the Council's actions, including the following:

"6. The Executive Committee is currently out of compliance with current Council operating procedures, and statute regarding roles and authorities."

"* * * * *

"11. The Chair and Executive Committee have violated public meeting law."

"12. The Executive Committee are [sic ] attempting to micromanage agency operations under the guise of ‘broad direction’ without Council authority directing how the salary structure should be changed and how employees will be rated on performance evaluations without regard to the Classification and Salary study. They do not recognize the

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