Kentucky Employment Law Blog

Does A Wrongful Discharge Under Kentucky Law Require Proof That The Employee Was Ordered To Violate the Law?

A claim of wrongful discharge under Kentucky law arises where an employee's discharge from employment in contrary to public policy.  The two prime examples are (1) where the employee is fired for refusing to violate a law in the course of his or her employment; and, (2) where the reason for discharge was the employee's exercise of a statutory right.  Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985).  The Kentucky Supreme Court relied on a Michigan case, Suchodolski v. Michigan Consolidated Gas Company, 316 N.W.2d 710 (Mich. 1982), for these clarifications.  

Does a wrongful discharge under Kentucky law require proof that the employer ordered the employee to violate the law?  Kentucky courts are yet to squarely address this question in a published opinion.  The Sixth Circuit's recent decision in Morrison v. B. Braun, No. 10-1548 (6th Cir., December 8, 2011), should provide some guidance since it relied upon Suchodolski.  The Sixth Circuit, in an opinion authored by Judge Boyce Martin, rejected the employer's argument that the discharged employee must prove that she was ordered to violate the law by her employer:

Courts applying Michigan law have consistently defined the wrongful discharge tort at issue here as an employer's termination of an employee because of the employee's "failure or refusal to violate a law in the course of employment."  No Michigan court has defined this cause of action to require a plaintiff to show that the employer directed him or her to violate the law.

Robert L. Abell
www.RobertAbellLaw.com 

Kentucky Workers Compensation Retaliation: Punitive Damages and the Jural Rights Doctrine

Terminating an employee in retaliation for filing a Kentucky workers compensation claim was ruled to constitute the tort of wrongful discharge by the Kentucky Supreme Court in Firestone Textile v. Meadows, 666 S.W.2d 730 (Ky 1984).  Subsequently, the General Assembly enacted KRS 342.197 and codified a cause of action for workers compensation retaliation.

Employers in defense to a workers compensation retaliation claim under KRS 342.197 often assert that punitive damages are not available as a remedy. That position was undermined by the recent Court of Appeals decision in Taylor v King, 2009-CA-1599 (Ky App, October 1, 2010).

The most pertinent issue in Taylor v King was whether the Kentucky Dram Shop Act, KRS 413.241, could constitutionally prohibit recovery of punitive damages against a seller or provider of alcohol. Because the Kentucky Dram Shop Act is similar to KRS 342.197, because it was enacted after significant common-law development of claims, defenses and remedies, the court's analysis is applicable to the similar issue presented with regard to claims for workers compensation retaliation under KRS 342.197.

Kentucky's jural rights doctrine "flows from a reading of sections 14, 54, and 241" of the Kentucky Constitution and "states that the General Assembly has no authority to abolish or restrict a common-law right of recovery for personal injury or wrongful death." The doctrine, the court added, applies not only to causes of action recognized at the time Kentucky's constitution was adopted in 1891 "but also to actions in remedies which have developed through the common-law since the adoption of the Constitution. Perkins v. Northeastern Log Homes, 808 S.W.2d 809, 815-18 (Ky 1991)." The court then concluded that the Kentucky Dram Shop Act had restricted the opportunity to recover punitive damages in violation of the jural rights doctrine.

A similar rationale applies to KRS 342.197. First, wrongful discharge is a tort and essentially a cause of action for personal injury. Second, the tort of wrongful discharge, like dram shop liability, is an action developed in the common-law since adoption of Kentucky's Constitution in 1891. Accordingly, a construction of KRS 342.197 that punitive damages are not a remedy would similarly violate the jural rights doctrine.

Robert L. Abell
www.RobertAbellLaw.com

Wrongful Discharge in Kentucky: Pleading the Claim

Wrongful discharge occurs under Kentucky law where (1) the discharge is contrary to a fundamental and well-defined public policy, and (2) the policy is evidenced by constitutional or statutory provision. Firestone Tire and Rubber Co. v. Meadows, 666 S.W.2d 730 (Ky. 1983). That has been wall in Kentucky for over 25 years; nonetheless, the Kentucky Court of Appeals was recently required to address what allegations were sufficient to properly plead (not prove but simply plead) a claim of wrongful discharge in Mitchell v. Coldstream Laboratories, No. 2009-CA-1885 (September 24, 2010).

Mitchell, a former Vice President for Quality and Regulatory Compliance for the defendant, Coldstream Laboratories, pleaded in his claim that "his discharge violated a well-defined public policy requiring 'honest and full compliance with the FDA investigators' and that his discharge came as a result of his refusal to violate law – albeit unspecified by name or number." This was sufficient the Kentucky Court of Appeals ruled in reversing a dismissal of the case ordered by Fayette Circuit Judge Pamela Goodwine. 

The panel of judges for the Kentucky Court of Appeals was as follows: Hon. Sara Combs (who wrote the opinion), Hon. Michael Caperton and Hon. Joseph Lambert, former Chief Justice of the Kentucky Supreme Court and sitting as a Special Judge.

Robert L. Abell
www.RobertAbellLaw.com

Kentucky Supreme Court Clarifies "Preemption" of Wrongful Discharge Claims

In Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985), the Kentucky Supreme Court further defined the parameters of the tort of wrongful discharge. Unfortunately, in so doing, the Court spawned a frequently misapplied "preemption" doctrine. The Court's analysis and discussion in its recent decision, Hill v. Kentucky Lottery Corp., 2006-SC-000748-DG (April 22, 2010), clarifies and should trim misapplication of the Grzyb "preemption" doctrine.

To review: the Kentucky Supreme Court recognized in Firestone Textile Co. v. Meadows, 666 S.W.2d 730 (Ky 1984), the tort of wrongful discharge, holding that a wrongful discharge claim arose where an employment termination was contrary to public policy as evidenced by a constitutional provision or statute. A year later, in Grzyb, the Court further advised that a wrongful discharge could arise where the discharge was motivated by (1) the employee's failure or refusal to violate the law in the course of employment, or (2) by the employee's exercise of a right conferred by statute.

The plaintiff in Grzyb sought to advance two claims: wrongful discharge and gender discrimination in violation of KRS 344.040. The Court ruled that his wrongful discharge claim "was preempted by the statutory remedies afforded under KRS Chapter 344 for civil rights violations." The rule actually stated in Grzyb was simple: "where the statute both declares the unlawful act and specifies the civil remedies available to the aggrieved party, the aggrieved party is limited to the remedy provided by the statute." Nonetheless, this point had been frequently misapplied and the case came before the Court presenting this error, among others, by the Court of Appeals.

The Hills were employees of the Kentucky Lottery Corporation (KLC). They protested the unlawful disability discrimination directed at a coworker. A jury found that KLC pressured Kim Hill to testify falsely at the (former) co-worker's unemployment hearing. The Hills were later fired and advanced two claims directly arising from their discharge: (1) that it violated KRS 344.280, which prohibits the discharge of an employee because the employee opposes an unlawful employment practice such as disability discrimination, and (2) wrongful discharge because their terminations were motivated by Kim Hill's refusal to perjure herself at the unemployment hearing. After two trials where the Hills prevailed, the Court of Appeals ruled that the Hills' wrongful discharge claim was preempted by their KRS 344.280 claim, because "both claims arose out of the same set of facts" and were "predicated on the same conduct" by KLC.

Both the Hills' wrongful discharge and KRS 344.280 claims did arise from the same facts: Kim Hill's testimony at the unemployment hearing, which opposed and protested the discriminatory treatment of a co-worker and in which she refused the employer's demand that she violate the laws prohibiting perjury. But the ruling in Grzyb did not preempt the wrongful discharge claim, the Supreme Court ruled:

Grzybdoes not hold that preemption is triggered when the same set of facts that establishes a common-law wrongful discharge claim also constitutes a claim under KRS Chapter 344.

The Court further explained as follows:

Because the statutes that declare the unlawful act of perjury are not the same statutes that declare and remedy civil rights violations, the Hills' claims under KRS Chapter 344 do not preempt the Hills' claims for wrongful discharge based on the public policy against perjured testimony. To further illustrate the distinct legal nature of the two claims, this Court notes that if KLC had requested Kim Hill to testify falsely regarding her co-worker, Gilmore, and she had refused but also did not affirmatively testify on Gilmore's behalf, any subsequent termination would potentially give rise to a common-law wrongful discharge claim but not an action under KRS Chapter 344. Similarly, had KLC never approached Kim Hill about her testimony in the Gilmore matter and the only conduct at issue was her eventual testimony on his behalf, a KRS Chapter 344 claim could be stated upon termination but there would be no basis for a common law wrongful discharge claim, i.e., no request for perjured testimony.

Robert L. Abell
www.RobertAbellLaw.com

Employee Can Sue For Constructive Wrongful Discharge

An employee fired for refusing to do an illegal act in the course of his or her employment may sue for wrongful discharge.  An employee faced with intolerable conditions of employment and thereby compelled to quit is constructively discharged.  The Indiana Court of Appeals recently combined the two concepts and ruled in Baker v. Tremco, Inc. (No. 29A02-0711-Cv-1001 July 16, 2008) that an employee constructively discharged because he refused to commit an illegal act in the course of employment may sue for damages.  "It makes little sense," the court observed, "to allow an employer to accomplish constructively what the law will not allow it to do directly." 

Robert L. Abell
www.RobertAbellLaw.com

Employee Fired For Reporting Co-Employee's Illegal Acts May Sue

An employee fired for reporting a co-employee's illegal acts relating to their employment may sue for wrongful termination and retaliatory discharge, the Mississippi Supreme Court ruled recently in DeCarlo v. Bonus Stores, Inc. (No. 2007-FC-02287-SCT).

DeCarlo learned that the company CEO was defrauding the company.  He reported this information to the company's CFO and several members of the company's board of directors.  He was fired and filed a wrongful termination lawsuit for retaliatory discharge.  The court ruled that his claim presented an exception to the employment-at-will doctrine and that a wrongful termination claim arose from a "discharge in retaliation for reporting a co-employee's illegal acts that relate to the employer's business." 

Robert L. Abell
www.RobertAbellLaw.com