# FILED

June 2, 1999 Cecil Crowson, Jr. Appellate Cou rt Clerk MITCHELL L. DARNALL, ) ) Plaintiff/Appell

ant, ) Appeal No.

) 01-A-01-9807-CV- 00347 v. ) ) Williamson C

ircuit A 

## % HOMECARE,

INC. and ) No. I-95381 JAMES D. SMITH, ) ) Defendants/Appel

lees. )

)

COURT OF APPEALS OF TENNESSEE

APPEAL FROM THE CIRCUI T COURT FOR WILLIAMSON COUNTY AT FRANKLIN, TENNESSEE

THE HONORABLE CORNELIA A. CLARK, JUDGE

STANLEY M. CHERNAU Suntrust Center, Suite 1750 424 Church Street Nashville, Tennessee 37219 ATTORNEY FOR PLAINTIFF/APPELLANT

ROBERT E. BOSTON 511 Union Street, S uite 2100 Nashville, Tennessee 37219 ATTORNEY FOR DEFENDANTS/APPELLEES

AFFIRMED AND REMANDED

WILLIAM B. CAIN, JUDGE-2- 

# OPINION

This is an appeal by th

e plaintiff from

summary judgment granted tothe Defendantsin a complaint a sserting retaliator

y discharge wi

th the action

based solely upon Tenne ssee Code Annotate d section 50-1-304.

I. THE FACTS OF THE CAS E Plaintiff was emplo yed by A+ Home care, Inc. on S eptember 6, 1 994 to be its Director of Finan ce. He was hired as an "at will" employee. A+ Homecare, Inc., through its a gencies, provides ho

me health serv

ices to indiv iduals throughout the Middle T ennessee area. A+ Homecar e, Inc. had a written policy prohibiting sexual harassment in the work place which policy was known to Mitchell Darna ll. In l ate October 1994, one of Darnall's fem

ale coworkers complained to A + supervisory pe

rson nel that Darnall had m ade inappropriate, unwe lcome, sexuall y graphic comments to her of a personal nature that made her very uncomfortable. T his employee, Diana Rollinson, made her complaints

to Cindi Smith, Vice President of Human Res ources at A +. After reporting the problem to R hea Garrett , General Counsel for A+, C indi Smith informed Dar

nall of the comp

laint asserted by

Ms. Rollinson.

Darnall's response to A+'s motion for summ ary judgm ent reads in pertinent part, a

s follows: DEFENDANT 'S ALLEGED UNDISPUTED FACT - NUMBER 3
In late October, 19 94, one of Darnall 's female co

worke r s complained to A+'s supervisory personnel that Darnall had enga ge d in inappropriate be havior which, apparently

to the employee and certainly to A+, was deemed to constitute sexual harassment. Garrett aff. at¶ ¶ 2-3. That employee, Diana Rollinson, complained that Darnall had made inapp ropri ate, u nwelc ome sexually graphic comm

ents to her, of a very

personal natur

e, t hat made her very uncomfortable. 2

...

2 Specifically , Ms. Rollinson rep orted that, while

the two were alone at

A+'s offices one

evening, Darnall told her that he had learned at Lamaze class that his pregnant wife's labor could be quickened with ejaculation of semen an d massaging of the breasts . Garrett Aff at ¶ 2.-3- * * * PLAINTIFF'S RESPONSE The only true rep roac h by anyone at Defendant A+, until the date of term

ination, was a sta

tement by M s. Cindi Smith, Vice President of Human Resource s, th at Plaintiff had p ossibly offen ded Ms. Dianna Rol linson with a com

ment regardinghis wife's pregnanc y in late October 1994. At that time, Plaintiff could not r ecall any quest

ion able statemen

ts made, and M s. Smith did not know the specifics. Plaintiff later reali zed it occur red at a staf f me etin g on a Monday following a Lamaze class he attended with his pregnant wife. During the staff mee

ting, he was asked m

any qu estion s by his staff. Plaintif

f answered their

questions concerning the class because the staff members appeared to be genuinely interested. Apparently,

the statement w

as made by Plaintiff while answering th

e ir questions. At no point did Plaintiff acknowledge that a

ny conversation

had gotten out of

hand. Ms. Smith maintained that the statement was sim ply an unintentional misunderstanding and defi nitely was not a prob lem. Further, it woul d not be reported in his personnel file. He apologized to Ms. Rollinson. No f urther complai

nts were made known to Plaintiff u ntil termination. ... Shortly a f ter he began his emp loymen t with A+, Dar nall b ecame concerned about the ac coun ting practices of th e corporation. Pa

rticularly he foundtha t a c heck in the amount of $30,000 had been drawn on the general operating account o f A+ o n June 1, 1993, payable to the Defendant James Bradley Smith, with n

o supporting docume

nta ti on. Darnall questioned Brad Smith and received four differing explanat ions for the $30,000 ch

eck. First, that itwas a part of the p

roceeds of the sale

of a previous com

pany to A+; sec

ond, it

was a loan payback for m oney previously loaned by Sm

ith to A+; third, tha

t it was compensat

ion to him over

and above what Medicare would allow and that he did not wan t to report it to Medicare or the IRS, and fourthly, t

hat it was a loan to him by A+ for which he had documentation at home. Not being satisfied withthese explanations,

Darnall went to t

he outside auditors of the company to discuss the problem with th em. On Janua

ry 20, 1995, one day af

ter his meeting with the auditors, Darnall was ter minated.-4-

II. TENNESSE

E CODE ANN

OTATED SE

CTION 50-1-304 (Public Protectio

n Act) At common law Tennessee recognized the "employee-at-will" rule which provides that employ

ment for an inde

finite term is

acontract at

will and can be terminated

by either party at

any time without cause. Combs v. Standard Oi l Co. , 166 Tenn. 88, 59 S.W.2d 525 (1933).
In sustaining the com

mon law rule th

is court has said: The rule has been well

established in t

hi s state that a contractof

employm ent for an indefinit

e term is a contract at will and can be terminated by either party at any

time without cause. Graves v. Ancho r Wi re Co rp. of Tennessee , 692 S.W.2d 420 (Tenn.App.1 985) . In Payne v. West ern & Atlantic Railroad Co. , 81 Te nn. 50 7 (188 4), th e Supr eme Court said: All may dism

iss their emplo

yees a t will, be they many or few, for good cause, for no cause or even for cause morally

wron g without being thereb y guilty of legal w

rong. Randolph v. Domini

on Bank , 826 S.W.2d 477, 478 (Tenn. Ap p. 1991).

Thi s principle is still via ble in Tennessee ex

cept where m

odified b y statute. Whitaker v. Care-Moore, Inc. , 621 S.W.2d 395 (Tenn. App. 1981).

Tennessee Code Annotated section 50-1-304 is a narrowly crafted statutory exception t o the common law "employee-at-will" rule.

Tennessee Code Annotated sec tion 50-1-304 provides in pertinent part : (a) No employee

shall be discharged o

r terminated sol

ely for refu sing to participate in, or for refusing to r

emain silent about, illegal acti

vities. * * * (c) As used in this sectio n, "illega l acti vities" means activities which are in violat ion of the crimi

nal or civil code of this st at e or the United States or any regulation intended to protect the public health, safety or welfare. (d) any employ

ee terminate

d in violation of subsect

i on (a ) sha ll have a cause of action against the employer fo r-5- retaliatory discharge and any other damages to w hich the employee m

ay be entitled.

The historical background for this statute and our limited experience under it has been addresse d by the United S tates Dis trict Co urt for the Eastern District of Tennessee: T his sta tutory cause of

action, enacted i

n 1990, embodies a common law caus e of action previousl y considered by

the Tennessee Supreme Cour t in Watson v. Cleveland Chair Co. , 7 89 S.W.2d 538, 544 (Tenn.1989) (recognizing "a cause o f actionfor retaliatory discharge . . . when an at-will em ployee is terminated s olely f or refusing to parti cipate, or rem

ain silent about illegal activities") and in Chism v. Mid-Sout h Mi llin g Co., Inc. , 762 S.W.2d 552 , 555-57 (Tenn.198 8) (re cognizing the cause of action , though not on the fac ts o f the case). However, both cases hesitated to fully val idate the caus e of act ion. The Watson court expressed its reluctance "to establish public policy or

adopt an exception to the co

mmon law by placing [its] imprimatur thereon in the a bsence of some cons ti tutional or legislative precedent." Watson , 789 S.W.2d at 544. The Chismcourt emphasized res ti ng the cause of action upon

public policy cle

arly "evidenced by an un ambiguous constitutional, stat utory or regulatory provision." Chism , 762 S .W.2 d at 556. Public policy guidan ce is necessary because at the heart of the law of retal ia tory discharge is the balance between the employer's unde ni able right to terminate an at-will employee over manageme

ntand policy decisions and the em ployee's right t

o protection

from unlawful discharge. Id. at 555; Watson , 789 S.W.2d at540; Clanton v. Cain-Sloan Co., 677 S.W.2d 441, 445 (Tenn.1984). As noted above, the Te nnessee General A

ssembly enacted the Act in 1990, thereby satisfying the Tennessee Supre me Court's concern f or clear public polic

y gui da nce. The st atute' s language nearly adopts verbatim

the language foundin the earlier cases. Recent cases specifi cal ly addressing Tenn. Code Ann . § 50-1-304, though, are very few in number. Griggs v. Coca-Cola Em

ployees' Credit U

nion , 909 F.Supp. 1059, 1063 (E.D. Tenn. 1995).

In order to get to the heart of the issue in this cas e, it is necessary to clearly establish the distinct

ion between retal

iatory dischar

ge u nder other-6-

statutory and common law exceptions to the em

ployee-at-w

ill doctrine and

the very limited statutor

y exception ther

eto established b

y Tennessee Code Annotated section 50-1-304. In Johnson v. St. Francis Hosp., Inc. , 759 S.W.2d 925 (Tenn. App. 1998 ), the Wester n Section of the Cour

t of Appeals was de

aling witha retaliatory

discharge

for filing a workers compensation cl aim. Rely ing on Hansome v. North Western Cooperage C o. , 679 S. W.2d 273 (Mo. 1984 ), the court asserted four elements to establish a prima fa ci e case of retaliatory discharge, to-wi

t: 1. Plaint iff's st atus as an emplo yee of th e defen dant be fore in jury. 2. Plaintiff's exer

cise of his right to se

ek workers com

pensation. 3. Employer's discharge of or discrimination against Plaintiff. 4. An exclusive causal relat ion ship between Plaint iff's actions and Defendant's actions.

In the co ntex t of a r etali atory d ischa rge fo r work ers co mp ensat ion relat ed activities, this co

urt questioned the cor

rectness of the four

th facto r se t forthin Johnson and the Suprem e Court granted an a

ppeal to reconc

i le the fac tors needed for a prima facie case of ret aliatory discharge in a wo rkers ' compensation con

text. The Suprem

e Court held: Based on the principles stated in Clanton v. Cain-Sloan C o., Chism v. Mid-South Mill ing Co., Inc. and Johnson v. Saint Francis

Hosp., Inc., the following elem ents are found to establish a cause of

action for discharge in re

taliation for assertinga workers' c ompen sation claim: (1) The plaintiff was an employee of the defendant at the t ime of the inj ury; (2) the plain t iff made a cl aim against the

defendant for workers'compensation benefits; (3) the defendant terminated the plaintiff's em

ployment; a

nd (4) the cla

im for workers' c ompensation

benefits was a substantial factor i n th e employer's motivation to ter minate the em

pl o yee's employm ent. Anderson v. Standard R

egister Co. , 857 S.W.2d 555, 558 (Tenn. 1993).

Johnson v. St. Francis Hosp., Inc. , 759 S.W.2d 925 (T enn. App. 1988) dealt with workers' compensation retaliatory discharg e and was decided two years before the enactm

ent of Tennessee Code

Annotated section 50- 1-304. The first case dealing

specifically with this "whistle blower" statute was Merryman-7-

v. Central Pa rkin g System, Inc., et al , No. 01A01-9 203-CH-00 076, 1992 WL 33 0404, (Ten n. App. Nov. 13, 1992). It was dec

ided after the dec

ision of this court in Anderson v. Standard R egist er Co ., 1992 WL 63421 (Te nn. Ct. App. Ap ril 1, 1992), but befor e the Supreme

Court issued its opinion o n appeal

. Anderson v. Standard Registe r Co. , 857 S.W. 2d 555 (Tenn. June 28, 1993). Merryman

adopted the four fac

tor s of J ohnson v. St. Francis Hosp., Inc. , including the "exclusiv e causal relations hip" factor without

making clear t

hat thi s "exclusive

causal relationship" fact

or is mandated by

the particular languag

e of Tennessee Code An notate d secti on 50-1 -304, r ather t han by Johnson v. St. Francis Hosp., Inc. This fourth factor of Johnson did not survive Anderson v. Standard Register Co. , but was rather converted therein to a "substantial factor" test in worker compensation related retaliatory discharge.

Itresults that the four factor test set forth in Johnson v. St. Franc is Hosp., Inc., 759 S.W.2d 925, 928 (Tenn. Ap p. 1 988) is th e correct test only because Tennessee Code Annotated section 50-1-304(a) provides that "no employee shall be discharged or ter minated solely for

refusing to partici

pate in, or for refusing to r

emain silent,

about illegal activi

ties." (emph

asis added)

Thus conside ri ng this case in the lim ited context of Tenn

essee Code Annotated section 50-1-304 and no t in the context of re

taliatory disch

arge in general, the four factor Johnson test is valid.

The limit ed number of case s actually addr essing Tennessee C

ode Annotated section 50-1-304 indicate that the plai nti ff has indeed a for midable burden in establishing elements number two and four of t he cau se of action. Griggs v . Coca-Cola Employees' Cre dit Union , 909 F.Supp. 1059, 1063; Merr y ma n v. Central Parking System, Inc. , No. 01A01-9203- CH-00076 1992 WL 330404 and Leeman v. Edwar ds , No. 01A01-9 401-CV-00 050 1994 WL 560889 (Tenn. App. Oct. 14, 1994) (both overruled on other grounds).

III. SUMMARY JUDGMENT The often repeated ru

les governing summ

ary judgm

ent are outlined in Byrd v. Hall , 847 S.W.2d 208

(Tenn. 1993). The evidence m ust be taken by the-8-

trial court and by this c

ourt in the light m

ost f avorabl e to the plaintiff as the nonmoving

party and all reasonable inf

erences from

the facts of the case mus

t be construed in favor of

Darnall.

The four elem ents of a cause of acti on under Tennessee Code Annotated section 50-1-304 are:

(1) The plaintiff's s

tatus as an empl

oyee of the De

fendant; (2) The plaintiff's refu sal to participate i n, or to remai

n silent about, illegal activities; (3) The employ

er's discharge of

the employe

e; and (4) An exclusive

causal relationship betwe en the plaintiff's refusal to participat e in or r emain silent about illegal activities and the employer's termination

of the employee. Griggs v. Coca-Co l a Em ployees' Credit U

nion , 909 F.Supp. 1059, 1063 (E.D. Tenn. 1995).

Elemen ts (1) and (3) are c learly me t in this case. The

re is enoug h evidence in the record as held b y the trial jud

ge to preclude

summary judgment as to element number (2).

Itis the inability of the p laintiff t o establish the "exclusive causal relationship" between his allege d "whistle blower" activities and his termination by A+ that dooms his case. The persistent inquiries by Darnall into activities predating his employment with A+ and his conference with the outside

auditors the day before his term

ination may

have been the m

ain reason

for his discharge and probably were at

least a su bstantial part of the reason for his discharge. However, this sub stantial factor ra tionale will not avoid

summary judgment.
In analyzing the

causation

element necessary to sustain an action under Tennessee Code Annotated secti on 50-1-304, t he Uni ted States Distric t Court for the Eastern Distr

ict of Tennessee h

eld: The fourth elemen

t requires Griggs t

o de monstrate "an exclusive causal relationship betwe en the plaintiff's refusal to participate

in or to remain sil ent about illegal act ivities and the employer's termination

of the employee." Merryman , 1992 WL-9- 33040 4 , at p. *6; Leeman , 1994 WL 560889, at p. *2. The pertinent language of Tenn.Code Ann. § 50-1-304(a) (em phasis added) reads: "No employee shall be discharged or terminated solelyfor refusing to par ticipate in, or for

refusing to rem

ain silent about, illegal activities." Griggs invites the Courtto read the statu te and the la ngua ge fro m Merryman as inten ding th e employer's unlawful behavior t o only have been a

"sub sta ntial" factor in the discharge (CourtFile No. 11, pp. 10-14). The Court declines to do so. The rule of statutory

construction requir

es th e C ourt to yield to the legislature's intention. Business Brokerage

Centre v. Dixon , 874 S.W.2d 1, 5 (Tenn.1994); City of Blai ne v. John ColemanHayes, 818 S.W.2d 33, 37 (Tenn.App.1991)

(citations omitted); Lockhart v. Jackson-Ma dis on Cty. Gnl. Hos p. , 793 S.W.2d 943, 945 (Tenn.App.1990) (ci tati ons omitted); see also First Am. Nat. Bank-Eastern v. F.D.I.C., 782 F.2d 633 , 636-37 (6th Cir.1986). In order to give effect to the legislature' s intent, courts look primarily

to "the natural and or

dinary mea

ning of the language used, when read i

n the context of the entire statute, and without any forc ed or

subtle construction to limit or extend t he impor t o f the language." City of Blaine , 818 S.W.2d a t 37 (citations omitted). Here, the language is clear. An employer m ay not discharge an employee

"solely for re

fusing to participate

in, or for refusing to remain silent about, illegal act iv ities." Tenn. Code Ann. § 50-1-304(a). Nothing in the remainder of th e section indicates the Court should re ad the statute differ ently. Nothi ng in Merryman

and Leeman , the only two cases directl y addressing the statute, indicate the Court should read the statut e differ ently.

Gri ggs v. Coca-Cola Em

ployees' Credit U

nion , 909 F.Supp. 1059, 10 65 (E.D. Tenn. 1995).

This cou rt, in discussing Te nnessee Code Annota

ted section 50-1-304, has stated: Prior

to the passage of T.C.A. § 50-1-304, the appellate courts had not

clearly settled

on whether a plaintiff was required to show that protected activity was either a substantial factor or the sole cause of terminat ion. But the statute supplie d the answer; it clearly re

quires the

employee

to show that the sole cause of his terminat

ion was his refusal

t o r emain silent ab

out illegal activities in the workplace. Hubrig v. Lockhe ed

Martin Energy Systems, Inc. , No. 03A01-9711- CV-00525 1998 WL 240128, * 11 (Tenn. App. May 4, 1998) perm. to app. denie d, concurring in results only (Tenn. Oct. 12, 1998).-10- The legislature chose t

he language used in T

ennessee Code Ann

otate d 50-1-304 an d provide d a very lim ited exception to the c

ommon law

rule governing "at will " employment. There is substantial evidence in the record at bar to establish a causa

l relationship betwe

en Darnall's sexu

ally explicit comments

to Ms. Rollinson and his subsequent discharg e by his empl oyer for alleged sexual harassm

ent. The necessa

ry "exclusive" causal relationship between the statuto

rilyprotected activiti

es and the discharge

of Darnall cannot be established, and the

action of the trial court in sustaining t he moti on for summary judgm

ent of A 

## % Homecare,

Inc. is affirm

ed.

Plaintiff further asserts t

hat the pre sident and sole stockholder of A 

## % Homecare, Inc., Jame s D. Smith, is liable u nder Tennessee Code Annotated section 50-1-304. Smith is not an "employer" under Tennessee Code

Annotated section 50-1-304 and cann ot be liable to the p laintiff under the s tatute. Carr v. United Parcel Service , 955 S.W.2d 832 (T enn. 1997) and Williams v. Williamson County Board of Educa

tion , 890 S.W.2d 788, 790 (Tenn. Ap p. 1994).

The judgment

of the trial court is a

ffirmed and c

osts are assessed against the Appellant.

_______ _____________

__________________

_ WILLIAM B. CAIN, JUDGE

CONCUR:

__________________________________ ___ BEN H. CANTRELL, P .J., M.S.

CONCURRING IN SEPARATE OPINION WILLIAM C. KOCH, JR., JUDGE