Title: Barbara R. Fleming v. Correctional Healthcare Solutions, Inc.

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). PER CURIAM The primary question in this appeal, which concerns New Jersey's Conscientious Employee Protection Act (CEPA), is whether an employer can terminate an employee for insubordination for failing to follow the employer's chain-of-command structure for making workplace complaints about perceived unethical or illegal activity. The employee who was terminated, Barbara R. Fleming, worked as a nurse at the Edna Mahan Correctional Facility, a prison for women. At the time of the termination, the Department of Corrections had privatized medical services at the prison and hired an outside corporation, Correctional Healthcare Solutions, Inc. (CHS), to deliver those services. CHS thus became Fleming's employer. Fleming's immediate supervisor was Sally Simpson. Above Simpson in the nursing chain-of-command was Jennifer Miers. In the spring of 1996, within a few months after the effective date of a new law that requires inmates to pay a nominal fee for medical services and medications, Fleming began complaining to Simpson that she had noticed that medical services and medications were being provided to inmates who had not completed the required co-payment form and thus were not charged the required co-payment. Simpson and Miers acknowledged that Fleming made these complaints and they acknowledged that the co-payment forms often were not completed. In addition, Fleming complained to Simpson that CHS employees were providing medications to inmates under expired doctor's orders, which she believed violated state and federal law. On July 2, 1996, Fleming sent a letter to Donald Moore, the Director of the Medical Department at the prison for CHS, complaining about the violations she had observed. The next day Miers returned the letter to Fleming with a handwritten note attached telling her that the letter first should go to Simpson, who then should take it to Miers, who in turn would take it to Moore. On July 5, 1996, Fleming sent Miers a letter setting forth the identical complaints made in her July 2 letter to Moore. Fleming stated that although she was instructed to send the letter to Simpson first, she did not do so because she believed she should bring the problems to the attention of the highest person in command and that her prior oral complaints to Simpson had not produced results. One week later, on July 12, 1996, Miers fired Fleming, telling her that the July 5 letter was the most important thing and that Fleming had failed to follow the chain of command. Miers said Fleming's conduct constituted willful disobedience and that she was terminated. Miers also told Fleming, for the first time, that Fleming had received a negative performance review from Simpson. Fleming's initial evaluation as a CHS employee, dated May 30, 1996, had described her performance as meets expectations and reported no problems with her performance. Simpson acknowledged that she had no problems with Fleming's performance prior to May 30. Simpson had told another nurse prior to Fleming's termination that I'm not giving anybody a bad evaluation. I don't have anything bad to say about anybody. When this nurse later learned of Simpson's negative review of Fleming, she confronted Simpson about the earlier statement and Simpson responded: We all need our jobs. In the litigation Fleming filed against CHS, Miers, Simpson, and others, she asserted that her termination violated CEPA because it was in retaliation for her submission of complaints of illegal workplace conduct. CHS contended that it fired Fleming for insubordination in reporting misconduct to a higher-up, in combination with poor job performance exacerbated by her refusal to follow direct orders. Fleming, in turn, argued that CEPA permits employees to submit legitimate CEPA complaints to any individual who falls within CEPA's definition of supervisor. On a motion for summary judgment, the trial court found that Fleming had presented evidence from which a jury could find that her belief that illegal conduct was occurring was objectively reasonable, but found that her whistle-blowing was not protected. The Appellate Division, to which Fleming appealed, agreed with the trial court and held that Fleming did not produce sufficient evidence to establish that her firing was due to her complaints about CHS's violations and not due to her refusal to follow instructions from Miers regarding the submission of complaints through the chain of command and for her refusal to follow orders in the dispensing of medication. The Supreme Court granted Fleming's petition for certification, primarily to consider the chain-of-command issue. HELD: An employer cannot fire an employee for insubordination because the employee failed to follow the chain of command established by the employer when the employee is making complaints of illegal or unethical workplace conduct. 1. CEPA is remedial legislation intended to protect employees who report illegal or unethical activities in the workplace, to encourage employees to report such conduct, and to discourage employers from engaging in illegal or unethical workplace activities. Under CEPA, an employee has the right to submit complaints of illegal or unethical conduct to any individual defined as a supervisor in the statute, a term that is broadly defined and that in this case includes, among others, Miers. CHS cannot limit the definition of supervisor under CEPA and cannot punish Fleming for submitting her CEPA-protected complaints to Miers rather than to Simpson. (pp. 7-9) 2. A chain-of-command defense may be used by an employer as a valid nondiscriminatory reason for an employee's firing, but permitting violation of a chain of command in reporting illegal or unethical workplace activity to justify discipline of an employee undermines the intent of the Legislature in passing CEPA. It cannot be relied on to justify Fleming's termination. (pp. 10-12) 3. On the evidence in this case, a jury could infer that Simpson's negative evaluation of Fleming was a pretext designed to cover up CHS's retaliation against Fleming for reporting the sloppy and illegal practices she observed. In order to prevail ultimately, Fleming must prove that CHS was motivated by this retaliatory intent when it fired her. On remand, the trial court should reconsider the summary judgment application in light of the principles stated by the Court and any additional proofs the parties may submit. (pp. 12-18) The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division for further proceedings in accordance with this opinion. JUSTICE VERNIERO, dissenting, agrees that an employee may not be lawfully discharged for blowing the whistle on a supervisor by lodging a CEPA complaint outside of the employer's chain-of-command structure, but is of the view that Fleming did not produce sufficient evidence to support the inference that she bypassed Simpson because Simpson was involved in wrongdoing or to establish that her termination was the result of her protected activity and not due to her refusal to follow instructions from Miers about the submission of complaints or for her refusal to follow orders in dispensing medication. JUSTICES O'HERN, STEIN, COLEMAN, LONG and LaVECCHIA join in the Court's opinion. JUSTICE VERNIERO filed a separate dissenting opinion in which CHIEF JUSTICE PORITZ joins. BARBARA R. FLEMING, Plaintiff-Appellant, v. CORRECTIONAL HEALTHCARE SOLUTIONS, INC., JENNIFER MIERS and SALLY SIMPSON, Defendants-Respondents, and JANE DOE and ROBERT ROE, Defendants. Argued March 14, 2000-- Decided June 7, 2000 On certification to the Superior Court, Appellate Division. John F. McDonnell argued the cause for appellant (Rand, Algeier, Tosti & Woodruff, attorneys). Alan S. Gold, a member of the Pennsylvania bar, argued the cause for respondents (McElroy, Deutsch & Mulvaney, attorneys; Joseph P. LaSala, on the brief). Per Curiam This appeal concerns the Conscientious Employee Protection Act (CEPA or Whistleblower Act), N.J.S.A. 34:19-1 to -8. The central question in the appeal is the extent to which an employer can dictate to its employees the manner in which complaints of illegal workplace conduct can be made. More specifically, can an employer fire an employee on the basis of insubordination because the employer has directed that the complaints be submitted to a lower-level supervisor who had previously ignored the same complaints? Plaintiff contends that CEPA permits employees to submit legitimate CEPA complaints to any individual who falls within the definition of supervisor as defined in N.J.S.A. 34:19-2(d). No employee can be lawfully terminated for submitting a CEPA complaint to any individual with an employer's organization who has the authority to direct and control the work performance of the affected employee, who has authority to take corrective action regarding the violation of the law, rule or regulation of which the employee complains, or who has been designated by the employer on the notice required [by] this act. Ibid. [N.J.S.A. 34:19-3 (emphasis added).] Importantly, supervisor is defined as any individual with an employer's organization who has the authority to direct and control the work performance of the affected employee, who has authority to take corrective action regarding the violation of the law, rule or regulation of which the employee complains, or who has been designated by the employer on the notice required under Section 7 of this act. Thus, supervisor is broadly defined. It includes, among others, Miers, to whom Fleming submitted her complaint in early July 1996. CHS has no right to limit CEPA's definition of supervisor by mandating that its employees submit CEPA complaints to their immediate supervisor. Certainly, it could not punish Fleming for submitting her protected complaints to Miers, an individual who fell within CEPA's definition of supervisor. This does not mean that an employer may not fire an employee, even a whistleblower, who is unreasonable in expressing his or her complaints. For example, a state employee who repeatedly called the Governor at the Governor's residence late at night to report violations of law at a state agency could justly be said to be insubordinate if requested not to do so. But to discipline an employee for going over the head of a supervisor allegedly involved in illegal or unethical workplace activity undermines exactly what the Legislature had in mind when it passed the Whistleblower Act. The most that can be made of a chain-of-command defense is that it might be raised as a valid nondiscriminatory reason for an employee's firing, that, like any other defense would have to be resolved by a factfinder. See McDaniel v. Temple Indep. Sch. Dist., 770 F.2d 1340, 1348-49 (5th Cir. 1985)(advancing arguments in support of [plaintiff's] contention that . . . court erred in concluding that her unfavorable job evaluations were not motivated by a discriminatory or retaliatory intent ). Consider our most recent decision in Bergen Commercial Bank v. Sisler, 157 N.J. 188 (1999), involving discrimination against a bank officer because of his youth. There the employer asserted that it was not discriminating against the employee but rather that it fired him because he was unqualified for the job. Id. at 197. We said that was a question for the factfinder. Id. at 221. Improperly applied, a chain-of-command policy will undermine fair employment policies. See Gares v. Willingboro Township, 90 F.3d 720, 724 (3rd Cir. 1996)(describing municipality's chain-of command procedure as trapping plaintiff between the Scylla of enduring [a supervisor]'s offensive conduct and the Charybdis of possible termination for violating the chain-of-command rules by reporting supervisor's conduct to higher authority). In the analogous context of disciplining public employees for speech, the chain-of-command defense has often been raised but often rejected. For example, if the employee is speaking out against the corruption of his or her supervisors, it may be reasonable to forego the internal complaint mechanism of the department because it would be a futile gesture. Cf. Brockell v. Norton, 732 F.2d 664, 668 (8th Cir.1984) (allegations warranted going around normal chain of command). However, where an adequate internal complaint mechanism is established, the employee's failure to use the complaint procedure can be considered in determining whether the speech was reasonable. The seriousness of the issue of public concern should also be considered in determining whether the speech was reasonable. The more serious the issue, the greater latitude that should be given the public employee to speak out. [Johnsen v. Independent Sch. Dist. No. 3, 891 F.2d 1485, 1490 n. 4 (10th Cir. 1989). In Czurlanis v. Albanese, 721 F.2d 98 (3rd Cir. 1983), the Third Circuit reviewed an employee's claim that he was wrongly terminated for failing to follow the employer's chain-of command policy when making whistleblowing complaints protected by the First Amendment. In that case, the public employer had a chain-of-command policy precluding employees from addressing complaints to the County Board of Chosen Freeholders without first bringing the complaint to the attention of those officials ultimately responsible. Id. at 105. The court held that such a policy cannot be used to justify the retaliatory action . . . under the rubric of the County's interest in promoting the efficiency of public service. Ibid. A policy which would compel public employees to route complaints about poor departmental practices to the very officials responsible for those practices would impermissibly chill such speech . . . . It would deter whistleblowing by public employees on matters of public concern. It would deprive the public in general and its elected officials in particular of important information about the functioning of government departments. [Id. at 106 (citation omitted).] That analysis should apply here. The holdings below that allow firing for insubordination when a whistle-blowing employee sidesteps an involved supervisor contradict the express language of CEPA and its broad remedial purpose. Fleming's act of communicating her complaints to Miers involved protected conduct as a matter of law. Fleming claims that despite the difficulty of working in a prison, she remained the kind of person who [a]t the end of every hard earned day . . . [found] some reason to believe. Bruce Springsteen, Reason to Believe, Nebraska (Sony/Columbia 1982). We are not so certain that plaintiff is that ideal employee, but insubordination for violating a chain of command cannot be relied on to justify her termination. An employment discrimination case may be advanced on either a pretext or mixed-motives theory. In a pretext case, once the employee has made a prima facie showing of discrimination, the burden of going forward shifts to the employer who must articulate a legitimate, nondiscriminatory reason for the adverse employment decision. If the employer does produce evidence showing a legitimate, nondiscriminatory reason for the discharge, the burden of production shifts back to the employee who must show that the employer's proffered explanation is incredible. At all times the burden of proof or risk of non-persuasion, including the burden of proving but for causation or causation in fact, remains on the employee. In a mixed motives or Price Waterhouse case, the employee must produce direct evidence of discrimination, i.e., more direct evidence than is required for the McDonnell Douglas/Burdine [Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981)] prima facie case. If the employee does produce direct evidence of discriminatory animus, the employer must then produce evidence sufficient to show that it would have made the same decision if illegal bias had played no role in the employment decision. In short, direct proof of discriminatory animus leaves the employer only an affirmative defense on the question of but for cause or cause in fact. [Starceski v. Westinghouse Electric Corp., 54 F.3d 1089, 1096 n. 4 (3d Cir. 1995) (citations omitted).] The distinction between a pretext and a mixed-motive case lies in the directness of proof of discrimination required by the plaintiff. Starceski, supra, 54 F.3d at 1097. In a mixed-motive case, direct evidence of discriminatory animus leads not only to a ready logical inference of bias, but also to a rational presumption that the person expressing bias acted on it. Ibid. . . . . At a bare minimum, a plaintiff seeking to advance a mixed-motive case will have to adduce circumstantial evidence 'of conduct or statements by persons involved in the decisionmaking process that may be viewed as directly reflecting the alleged discriminatory attitude.' Griffiths v. CIGNA Corp., 988 F.2d 457, 470 (3d Cir.), cert. denied, 510 U.S. 865, 114 S. Ct. 186, 126 L. Ed. 2d 145 (1993), overruled on other grounds, Miller v. CIGNA Corp., 47 F.3d 586 (3d Cir. 1995) (in banc ) (citation omitted). [Jackson v. Georgia-Pacific Corp., 296 N.J. Super. 1, 18-19 (1996).] We are satisfied from our assessment of the evidence that the directness of proof of discrimination in this case does not make this a mixed-motive case. This is a McDonnell Douglas pretext case. In order ultimately to prevail, plaintiff must prove that retaliatory intent motivated her employer. However, the factfinder's disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional [retaliation]. Thus, rejection of the defendant's proffered reasons will permit the trier of fact to infer the ultimate fact of intentional retaliatory action. St. Mary's Honor Center v. Hicks, 509 U.S. 502, 511, 113 S. Ct. 2742, 2749, 125 L. Ed. 2d 407 (1993). BARBARA R. FLEMING, Plaintiff-Appellant, v. CORRECTIONAL HEALTHCARE SOLUTIONS, INC., JENNIFER MIERS and SALLY SIMPSON, Defendants-Respondents, and JANE DOE and ROBERT ROE, Defendants. VERNIERO, J., dissenting. To the extent that the Court holds that an employee may not be lawfully discharged for blowing the whistle on a supervisor by lodging a CEPA complaint outside of the employer's chain-of command structure, I fully agree. CEPA would make little sense if it required conscientious employees to disclose alleged wrongdoing to the wrongdoer, especially when the wrongdoer is the employee's immediate boss. However, that is not this case. Plaintiff twice broke the chain of command prior to her discharge. The first time, on July 2, 1996, she sent a memorandum entitled Variety of Pecky Problems to Donald Moore, then her department director. That memorandum contained no explanation of why plaintiff bypassed the normal procedure, which required that the memorandum be sent to her immediate supervisor, Sally Simpson. In fact, it did not reference Simpson at all. Jennifer Miers, then plaintiff's intermediate supervisor, returned the memorandum to plaintiff with this note: Dear Barb, This should first go to Sally [Simpson] - then Sally should bring it to me and then I'll bring it to Don [Moore]. The second time, just three days later, on July 5, 1996, plaintiff bypassed Simpson by resubmitting her list of complaints directly to Miers. In that memorandum, plaintiff explained the breach of protocol by stating: I see no reason to submit these through Sally, since they are areas over which she has very little input or control. Nowhere in that second memorandum does plaintiff state that Simpson is a wrongdoer or responsible for any of the matters about which plaintiff is complaining. It was only at her deposition, well after her discharge and the commencement of this suit, that plaintiff identified Simpson for the first time as the worst offender on our shift. That statement, made during the course of litigation, is a bare allegation unsupported by plaintiff's earlier memoranda. Stated differently, the record contains no foundational fact to support the proposition that plaintiff bypassed Simpson because the supervisor was specifically engaged in wrongdoing. Cf. Caputo v. Nice-Pak Prods., Inc., 300 N.J. Super 498, 506 (App. Div.) (upholding directed verdict because considering the absence of any corroboration of plaintiff's own self-serving testimony, a reasonable jury could not have found for plaintiff . . . ), certif. denied, 151 N.J. 463 (1997). I do not believe that CEPA was intended to abrogate this Court's sound instruction that when the evidence 'is so one sided that one party must prevail as a matter of law,' the trial court should not hesitate to grant summary judgment. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (citation omitted). Moreover, an adverse party may not rest upon the mere allegations or denials of the pleading . . . [to show] that there is a genuine issue for trial. R. 4:46-5. Nor do I believe that CEPA was intended to innoculate employees who are insubordinate or poor performers. According to defendant's personnel records, plaintiff had to be directed on numerous occasions to return to her unit to finish dispensing medications to inmates. By fair inference, she was not doing her job, at least in the minds of her supervisors. In a prison setting, failure to do one's job, especially the failure to administer proper medical care to inmates, can have dire consequences. I agree with the Appellate Division that NO. A-39 BARBARA R. FLEMING, Plaintiff-Appellant, v. CORRECTIONAL HEALTHCARE SOLUTIONS, INC., et al., Defendants-Respondents, and JANE DOE and ROBERT ROE, Defendants. DECIDED June 7, 2000 Chief Justice Poritz CEPA prohibits employees from retaliating against employees for blowing the whistle on (1) possible violations of the law, (2) possible improper quality of patient care in the health care industry, or (3) possible violations of any clear mandate of public policy concerning the public health, safety, or welfare or the protection of the environment. [Christopher P. Lenzo, The Changing Contours of New Jersey Whistleblower Law, New Jersey Lawyer, the Magazine, April, 1999 at 51 (footnotes omitted).]