### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON January 20, 2000 S ession

RONALD M. GUY v. MUTUAL OF OMAHA INSURANCE COMPANY

An Interlocutory Appeal from the Circuit Court for Shelby County

No. 69975-3 T.D. Karen R. Williams, Judge

No. W1999-00942--COA-R9-CV - Filed March 1, 2001

This is a retaliatory

discharge case. The plaintiff employee reported to government authorities the illegal activities of a thi

rd party, w

hich resulted in

adverse consequences to the employer. The plaintiff alleged that he was discharged i n retaliati on for reporting the illegal activities. The employer’smotion for summary judgment was denied, and the employ er then filed this interlocutory appeal. We hold, inter alia , that the Tenness e e whistl eblower statute is not limited to reports of illegal activities of the e

mployer, an

d that any cl

aims to which the wh

istleblower statut

e is applicable must meet the require

ments of the statute . The whistleblowe r statute is not appl

i cableto the plaintiff’s claims in this case, because the plaintiff was not aware at the time of the repo rt t hat it could result in adverse consequences to the employer, and the plaintiff did not fac e the choic e betweenreporting the illegal activities or keeping his job. The plaintiff states a common law claim for retaliatory discharge in violation of pub lic pol icy, and proffers sufficient evidence for a trier of fact to find that retaliation was a substantial factor in his discharg e. Therefore, the denial of the employer’s motion for summary judgment is aff irmed.

Tenn. R. App. P. 9 Inte

rlocutory Appeal;

Judgment of the Cir

cuit Court Affirm

ed.

H OLLY K IRBY L ILLARD , J., delivered the opinion of the court, in w

hich W. F RANK C RAWFORD , P.J., W.S., and D AVID R. F ARMER , J., joined.

Herbert E. Ger son, Th omas J. Walsh, Jr., Timothy S. Bland, Memphis, Te

nnessee, for the

appellant, Mut ual of O mah a Ins uran ce C omp any.

Don ald A. D ona ti, Mem phi s, T enn ess ee, f or t he ap pel lee , Ro nal d M. Guy.

OPINION

This is retaliatory discharge case. The trial court denied

the employer’s motion for summary judgment, and

the employer was granted permission to file this interlocutory appeal. The facts as presented to the trial court are outlined below.2

Plaintiff/Appellee Ron ald Guy ( “Gu y”) wa s em plo ye d by Def endant/Appellant Mutual of Omaha Insurance Company (“Mutual”) fr om December 1991 until April 1995. Guy was an at-will employee with Mutual, and he

served as gene

ral manager of

its Memphisdivision office from June 1992 until his termination. As general manager, Guy oversaw Mutual’s insurance age

nts in West Tennessee. Guy’s other duties included recruiting and training insurance agents, managing the administrative functions of the Memphis office, and making the Memphis office profitable.

As of early November 1994, Mutual viewed Guy ’s job perfo rma nce favorably. In a letter datedNovember 4, 1994, Dave Rooney (“ Roo ney”), Area Sales Director for Mutual and Guy ’s immediate

supervisor, commented to Don Lilly, Jr. (“Lilly ”), Regional Vice P

resident o f Mutual, that Guy had “done

a good job in adap

ting to a new situa

tion in one of the wo

rst offices at the time.” For the first time in memor y , he stated, “we have a great opportunity to have Me mphis enjoy the success it deserves.” In light of this performance, Rooney recommended that Mutual “guarantee”

a portion of Guy ’s earnings, sta ting that “[i]t is now t

ime for me to help Ro

n get t o a six figure income that will be built solidly through Process Management.”

However, the chain of events that would eventually lead to Guy ’s discharge from Mutual had begun sometime in

late 1992. At that ti

me, Guy cons

i dered hiring Jerry Mac Roberson (“Roberson”), a licensed insurance agent based in Dyer County , Tennessee, to be an agent for Mutual. Guy testified that Roberson passed a background check, but Guy decide d not to hire Roberson after

conducting his own investigation. Guy testified that he never considered Roberson to be a Mutual employ

ee or agent. N

evertheless, Mut

ual’s home offic

e in Oma ha, N ebraska assigned Roberson an “agent production number” after Roberson passed the ini tial background check.

The parties dispute whether Roberson ever became a

n agent of Mutua

l. Guy said that it was his understanding t

hat Roberson was n

ever a contrac

ted agent of Mutu

al. Guy believe

d that, in order for Roberson to be a contracted agent, Guy would have to form

ally execute

the contract on be

half of Mutual. However, Guy admits that, during the pre-contract phase, a member of his staff may have forwarded

to Mutual’s home office some documents concerning Roberson’s appointment. Mutual contends that Guy had contracted Roberson as a Mutual agent. Mutual notes documents Guy used in a presentation to senior officers at Mutual’s home office, in which Guy listed Roberson as having been contracted as an agent on December 1, 1992. A different pag e on the same docu

ment lists Roberson as an agent “in precontract.” Mutual also produced a “Termination of Ag ency Contract

or Agr eement” form not ice, with Guy ’s signature, f iled with the Tenne

ssee Departmen

t o f Commerce and Insurance on September 1, 1993. This form notified th e agency that Roberson’s contract with Mutual had been terminated eight months earlier, on January 1, 1993. Mutual contends that there would have been no reason to notify the agen cy of Roberson’s termination if Roberson

never became a contracted agent. Guy a ssert s t hat the signatur

e on the form notic

e is not his signature, and denies filing the termination notice with the agency

. Regardless

of whether Roberson

was ever a contr

acted agent f

or Mutual, it is

undisputed that Roberson was given mater ials during his pre-c

ontract phase tha

t enabled him

to represent himse

lf3

to third parties as a Mutual agent. In December 1992, Roberson made a sales call onDoris Johnson (“Johnson”) of Dyersburg, Tennessee.Roberson showed John son documents

from both Mutual and John Hancock Insurance Company a nd falsely represented himself as a Mutual agent. Johnson later signed an application fo

r a Mutual annuity

. She gave Rober

son a stock certif

icate, as well

as checks made payable to Mutual totaling approximately $70,000. Roberson deposited the check s into his personal account. Roberson began sending Johnson monthly checks written on his personal checking account. He represented these to be “annuity che cks.” Subsequently, one

o f the checks was returned to Johnson for insufficient funds.

In J anua ry or February

1994, Roberson contacted Guy and told him that he had a stock certificate belon ging t o Johnson which was payable to Mutual. Roberson forwarded the stock certificate to Guy. Guy then gave the stock certificate to one of Mutual’s agents, Houston Jones (“Jones”), with instructions to contact Johnson and determine whether she still wanted the

stock to be sold and the proceeds invested with Mutual. When Jones visited Johnson in January or February 1994, Johnson showed Jones a John Hancock Insurance Company receipt that Roberson had given to her, reflecting the

annuity she had purchased from Roberson. Johnson told Jones that Roberson had sent her an annuity check that had bounced. After the visit with Johnson, Jones told G uy the information that Johnson had given him. Guy immediately contacted a manager at JohnHancock withthe information concerning Roberson’s dealings with Johnson. He also reporte d the matter to the Tennessee Department of Commerce and Insurance. Guy

did not tell his immediate supervisor, Roo ney, about the Roberson matter. Guy maintains that when Jones told him

the information that he had received from Johnson, he did not feel that Mutualwas involved in any fraud against her, or that Mutual was exposed to any liability for Roberson’s misconduct. Eventually , about eight months later, on October 13, 1994, Guy reported the matter to the Mutual L aw Division.

On November 17, 1994, the Tennessee Department of Commerce and

Insurance requested that Mutual reimburse Johnson $67,147.83 as a result of Roberson’s conduct. The letter from the Department

stated that, because Roberson had been given a Mutual a gent production number and other Mutual materials c

ustomarily g

iven to new Mutual agents, Mutualhad enabled Robe rson to represent himself to Johnson as a

Mutual agent.

Therefore, the Department concluded that Mutual

was responsible for Joh

nson’s loss. On December 16, 1994, Michael Kennedy from Mutual’s leg al office wrote a

reply letter to the Tennessee Department of Commerce and I nsurance. In Kennedy’s letter, Mu tual admitt

ed responsibility for Johnson’s loss but asserted that the John Hancock Company or Roberson should pay part of the restitution to Johnson. Ultimately, however, Mutual made restitution to Johnson in the form of an annuity w

orth $63,781.72. Mutual

applied a defici

t in the same amount to G

uy’s offic e, and Guy’ s monthly

bonus pay was reduced by 25% beginning in January 1995 in order to correct the deficit.

Meanwhile, another event re levant to Guy’s discharge from Mutual was unf olding. In la

te 1994, a female

agent in the Memphis office told Guy that she had been sexua

lly harasse

d by a male employee. The male

employee was the district sales manager in the Memphis office a nd, as such, workedunder Guy’s supervision. Guy took the female agent’s statement and reported the allegation to Rooney. In January 1995, Kim Hadley -Bidroski (“Bidroski”), Mutual’s Senior Regional Human4

Resources Consultant , se nt G uy a letter marked “Personal and Confidential” stating that the investigation into the female agent’s allegation had been completed and that no ac tion would be taken on the matter. The letter instructed Guy to distribute documents concerning Mutual’s sexual harassment

policy to employees and agents at the Memphis office. Guy testified that

he understood that the letter

itself was not to be distributed. Nevertheless, Guy’s administrative staff distributed the letter througho

ut the Memphis o ffice. After the letter had been distributed, the female agent approached

Guy and told h

im that she felt

“threatened.” Guy responded to the female agent that he “didn’t know what she expected.” The female agent reported the distribution of the letter and her conversation with Guy to Mutual’s home office.

Sub seq uen tly, on March 1, 1995, G uy met with Roo

ney, Bid roski, and Linda Beach (“Beach”), a manager in Mutual’s human resources office. Rooney gave Gu y a lett

er voicing Mutual’s “serious concern” after a review of Guy ’s handling of theRoberson matter and the sexual harassment

allegation. The letter, which was drafted by Bidroski for Rooney’s signature, listed areas of “continuing concern” to Mutual, including Guy’s “appar ent lack of understanding of

the personal and corporate liability invo lved in c ommunicating with the Tennessee Department of Insurance withoutnotify ing A gency Sal es management,” and the “lack o f judgment . . . disp

layed in [Guy

’s] communication involving the results of the sexual harassment allegation.” Rooney , on a recommendationfrom Bidroski and Bea ch , placed Guy

on “written notice

” as a result of hi

s “unacceptable

performance, ” re sulting in a 20% re duction in Guy ’s monthly bon us income, in addition to the reductions already in place due to the Roberson matter. Rooney stated that “continued unacceptable

performance may resul t in your termination of employment with Mutual. . . .” According to Beach, Guy

responded that he

would not work for $30,000 per year. Beach testified that she immediately asked Guy if that meant he wa s resigning, and he responded no.

While still on “written notice,” Guy received a telephone cal l from Greg Paylor (“Greg” ). Greg Paylor had previously worked under G u y ’s supervision as a

manager in Mutua

l’s Memphis office, and was the son of an acquaintance o

f Guy’s, Larry Pay

lor (“Larry”). Gre

g had been working in Mutual’s home office. During the conversation, Greg told Guy that he planned

to take a position in Mutual’s Tupelo, Mississippi office. On April 5, 1995, Guy telephoned Larry . At the time of the telephone call, Larry was an employ ee of Metropolitan Life Insur ance Compa ny in Memphis, a competitor of Mutua

l. Larry said later that during the te lephone conversation

with Guy, Guy made several disparaging remarks about Mutual’s decision to transfer Greg to Tupelo and about Mutual’s general business operations and methods. Larry reported that Guy said that Tupelo is the “k i ss of dea th” for Mutual managers, th at he felt th at Mutual w as out to “f *** over” Gr eg, and that Gre g should be prepared to “look over his shoulder” a ll the time. Guy ad

vised Larry

that Greg should either force Mutual to transfer him back to Memphis or leave Mutual and take a job with Metropolitan Life. Larry Pay

lor reported the telephone conversation with Guy to Bidroski at Mutual’s human resources office.

On April 19, 1995, Mutua l terminated Guy’s employme nt. Bid roski and Rooney told Guy that he had been fired f

or his unaccepta

ble performance as demonstrated by his failure to use judgment commensurate

with the position of General Manager. Neither Bidroski nor Rooney told G

uy that his5

telepho ne conversat ion with Larry Pay lor was a factor in his termination. It is undisputed that no Mutual official told Guy that his discharge was related to his reporting of Roberson to the Department of Commerce and Insurance over a y ear earlier.

On May 19, 1995, Guy filed a lawsuit against Mutual asserting a common law cause of action for wrongful discharge in violation of public policy. I n the complaint, Guy

alleged that he

became

awareof events during

his employme

nt with Mutual indicating that Roberson had engaged in illegal act ivi ty. At the time of the events, Guy thought that Roberson was an employee

or agent of the John Hancock Insurance Company. Gu y all eged that he reported Roberson’s conduct to the Tennessee Department

of Commerce and Insurance,based on his belief that he had a legal obligation to report any unethical or unlawful activity of another licensed agent. Guy stated that Roberson was indicted for fraud and th

e Departmen t of Commerce and I nsurance deter

mined that Mutual sho

uld be held liable for the monetary loss of Roberson’s victim. Guy alleged that Mutual later began “a campaign of retal iation” against him because of his disclosure of Roberson’s fraud to the Department of Commerce and Insurance. He asserted that his eventual discharge was in retaliation for his reporting Rob ers on’ s il lega l ac tiv ity a nd f or h is f ail ure t o rem ain sil ent abo ut t hat act ivi ty.

On July 22, 1997, Mu

tual filed a motion f

or summary ju

dgment, asserting that Guy could not prove that his discharge was caused solely by his alleged refusal to remain silent about illegal activities. In the m otion, Mutua l noted that Guy admitted that an employee’s judg ment, or lack thereof, can legitimatel

y play a role in an employ

er’s decision to

hire and fire the employee. Mutual argued that Guy displayed a critical lack of judgment in his handl ing of the sexual harassment i nvestigation and in his convers ation with Lar

ry Pay lor, and that this la

ck ofjudgment pla

yed a substantial role in his termination.

In response

to Mutual ’s motion for summary judgment, Guy submitted the affidavit of Douglas Sizemore (“Sizemore”), Commissioner of the Tennessee Department of Commerce and Insurance. In his affidavit, Sizemore noted that the Department is responsible for licensing insurance agentsin Tennessee and for ensuring compliance by all insuranc e agents and their appointing insurers withthe statutory

requirements se

t forth in Tennessee Code Annotated §§ 56-6-153 and 56-6-155. Sizemore asserted that “it is the Department’s position that any licensed insurance agent in the state of Tennessee has a duty and responsibility to re port activi ty or conduc

t by another

agent that is in violation of any of the insurance statutes.” He stated that this duty

is imposed in order

to effectuate the purpose and in

tent o f the insurance statutes and to protect the citizens of Tennessee from unscrupulous agents and insurers. Sizemore stated that if any agen t or insurer knowin

gly faile d to report a violation of TennesseeCode Annotated56-6-155(a), or of any other statute, the Department would be compelled to take action against that agent or insurer, including possible

license revocation or suspension, and

possible civil pena

lties. Sizemore did not state the statutory

or regulatory

basis for such actions against an insurance agent who failed to report another a gent’s illegal activity.

On October 2, 1998, the trial court entered an order denying Mutual’s motion for summary judgment, without elaborating onthe reaso ning for its decision. Mutual filed a motion in the trial court for permission for interlocutory rev iew of the trial court’s denial of its summary judgment6

motion, which was granted by the trial court. Permission for interlocutory appeal of the trial court’s denial of Mutual’ s motion for summary judgment was late

r granted by

this Court.

On app eal, Mutual arg

ues that the trial c

ourt erred in not g

ranting Mutual’ s motio n fo r summary judgment. It contends t hat Guy’s suit for retalia tory discharge is a “whistleblowe r” claim, governed by Tennesse

e Code Annotated 5 0-1-304, Tennes see’s “whis t leblower statute.” Mutual

m aint ains that common law whistleblower claims in Tennessee have been supplanted by the whistleblower

statute, so that Guy must prove the elements of the claim set forth in the statute, including the fact that Guy’s refusal to remain silent about illegal activities was the “sole” reason for his discharge. I

n the alternative

, Mutual contends th

at, under the comm

on law, Guy i

s required to show that his refusal to r emain silent ab out illegal activities was the sole reason for his discharge. Mutual asserts that Guy cannot show that his failure to remain silent about illegal activities was the sole cause or even a s ubstantial f actor in his discha

rge, and conte

nds that Guy w

as not asked to par ticipate

in illegal activi

ty or asked t

o remain silent abo

ut illegal activi

ty . If G uy’s claim

is no t governed by Tennessee’s whistleblowe r statut e, Mutual argues that the facts do not give rise to a common law claim for retaliatory discharge.

Guy argues on appeal that

his claim is not a whis

tleblower claim

and therefore is not governed by the require ments of Tennessee Code Annotated § 50-1-304. He contends that Tennessee Code Annotated§ 50-1-304 governs claims which assert that the plaintiff suffered retaliation for refusing to participate in, o

r remain silent about,illegal activities of the employer , not the illegal activities of

a third party such as Roberson. Guy also arg ues tha t the commo n law tort o f retaliato ry discharge survived enact me nt of the whistleblower statute, and is concurrent with the whistleblower statute, and that for the concurrent common law tort of retaliatory discharge, a plaintiff need only show that retaliation was a substantial factor in the discharg e, not the so le reason. Guy asserts that his allegations,

if taken as true,

support a common la

w claim for reta

liatory disc

harge in violatio n of public policy . He maintains that the evidence is su

fficient to show a genuine d

ispute as to whether retaliation was a substantial factor in Guy’s discharge.

A motion for summary judgment should be granted when the movant demonstrates that there

are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law. Tenn. R. Civ. P. 56.04. The party moving for summary judgment bears the burden of demonstrating that no genuine issue of material fact exists. See Bain v. Wells , 936 S.W.2d 618, 622 (Tenn. 1997). On a

motion for summary

judgment, the court must take the strongest legitimate view of the evidenc e in favor o f the non-moving party, allow all reasonable inference s in favor of that part y, and discard all countervailing evidence. See id. In Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993), our Supreme Court stated:

Once it isshown by

the moving party

that there is no g

enuine issue of ma

terial fact, the nonmoving party

must then demonstrate, by

affidavits or discovery materials, that there is a genuine, mater

ial fact dispute to

warrant a trial

. In this regard, Rule 56.05 [now 56.06] provides that the nonmovin g party cannot si mply rely upon his pleadings7

butmust set forth specific facts showing that there is a genuine issue of material fact for trial.

Id. at 211 (citations omitted) (emphasis in original).

Summary judgment is appro

priate only

when the facts

and the legal conclusions drawn from the facts reasonab

ly permit only one conclusion. See Carvel l v. Bot toms , 900 S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is no presumpti on of correct ness regardi ng a trial court’s grant of summary judgment. See id. Therefore, our review of thetrial court’s denial of summary judgment is de novo on the record before this Court. See Warren v. Estate of Ki rk , 954 S.W.2d 722, 723 (Tenn. 1997).

We examine first Appellant Mutual’s argument that Tennessee common law regardi ng whistleblower

claims has been supplanted by the whistleblower statute, and that therefore Guy must show, inter alia , that his refusal to remain silen t about illegal a ctivities was the so

le reason for his discharge. We will then discuss G uy’s asser tion that his

claim is not a whistleblower claim, and therefore could not be governed by the whistleblower statute.

The doctrine of emplo

yment at-wi

ll is a long-standing rule in Tennessee which recognizes the right of either the employer or the employe e to terminate the employment relationship at any time, for good cause, bad cause, or no cause at all, without being guilty of a legal wrong. See Ste in v. Davidson Hotel Co. , 945 S.W.2d 714, 716 (T enn. 1997); see also Darnall v. A+ Homecare, Inc. , No. 01-A-01-9807-CV-0034, 1999 WL 346225, at *2 (Ten

n. Ct. App. June 2, 1999). By statute an d case law, however, some restrictions have been imposed upon the right of an emplo

yer toterminate an atwill employee. See Stein , 945 S.W.2d at 716. I n Tennessee, an

employee-at-will genera

lly may not be discharged for attempting to exercise a statutory or constitutional right or for another reason which violates a clear public policy evidenced by an una mbigu ous constitutional, statutory or regulatory provision. See id. at 717.

In Chism v. Mid-South Milling Co. , 762 S.W.2d 552 (Tenn. 1988), the TennesseeSupreme Courtrecognized tha

t a common law clai

m for retaliatory

discharge may

arise in cases in which the employer vi

olates a clear public policy and the violation is a “substantial factor” in the termination of the at-will employee. Id. at 556. The Court emphasizedthat the public policy

forming the basi

s for the claim must be clearly “evidenced by an unambiguous constitutional, statutory or regulatory provision.” Id. One year later, in Watson v. Cleveland Chair Co. , 789 S.W.2d 538 (Tenn. 1989), the Tennessee Supreme Court recognized that “a cause of action for retaliatory discharge arises when

an at-will employ

ee is terminated s

olely for refusing to participate, continue to participate, or remain silentabout illegal activities.” Id. at 544. The Watson Court asserted that it would be inappropriate for the Court “ to establi sh public p olicy or adopt an excepti on to the co mmon-law b y placing [ it s] imprimatur

thereon in the absence of some constitutional or legislative precedent.” Id. It cautioned that “only in the most extrao rdi nary circumstances s hould the courts of

this State impose the

ir judgment in an area which, in the first instance, is clearly a leg islative function.” Id. at 540.8

In 1990, the State legislature enacted Tennessee Code Annotated § 50-1-304 (Supp. 2000) as part of the Public Protection Act of 1990, Chapte r 771, Public Acts of

1990. The statute,

commonly referred to as the “whistleblower statute, ” is a narrow ly crafted exception to the common law employee-at-will rule. See Darnall at *2. The statute p

rovides, in pertin

ent part:

(a) No employee shall be discharged or term inated solely for refusing to

participate in, or for refusi

ng to remain sile

nt about, illegal

activities.

* * *

(c) As used in thissection, “illegal activities” means activities which are in violation of the criminal code or civil code of this state or the United States or any regulation intended to protect the public health, safety or welfare.

(d)(1) Any employ

ee terminated in v

iolati on of subsec tion (a) shall have a cause of action against the employer for retaliatory

discharge and any other damage s to which the employee may be entitled.

See Tenn. Code Ann. § 50-1-304. The question arises, then, whether a common law cause of action remains for r etaliatory discharge in a whistleblower case, af ter enactment of the whistleblower statute.

This issue has been discussed in previous cases, but has not been decided by a Tenness ee appellate court. In Reynolds v. Ozark Motor Lines , 887 S.W.2d 822 (Tenn. 1994), the plaintiff truck drivers alleged that they were discharge d for refusing to commence a trip in a truck they had not driven before, without having adequate time to inspect the truck. Id. at 8 23. By s tatut e and regulation, the plaintiff drivers were required to perform such an inspection. Id. at 824- 25. The Reynolds Court found that a common law action for

retaliatory discharge pre-dated ena ctment of the whistleblower

statute. Id. at 825. It found that the el ements nece ssary for a retal iatory dischar ge claim were present: “an employment at-will relationship; a clear declaration of public policy which imposes duties upon the employee or employer; and discharge

of the employ

ee for refusing

to violate those duties.” Id.

In Griggs v. Coca-Cola Employees’ Credit Union
, 909 F. Supp. 1059 (E.D. Tenn. 1995), the federal court examined Tennessee law on retaliatory discharge

. The plaintiff Griggs alleged that she

was discharged by the defendant credit union beca use she “repeatedly brought to light” practices by the credit union which were illegal or contrary to reg ulations governing credit unions. Id. at 1061-62. At Griggs’ requ

est, the Tennesse

e Department of Financial Institutions conducted an audit which resultedin criticism of some of the credit union’s practices. Id. at 1061. About six weeks later, Griggs was discharged, purportedly based on her fa ilure to perform certain job duties and her refusal to cooperate concerning a new computer sy stem. Id. Griggs filed suit against the credit union under Tennessee Code Annotated § 50-1-304. Id. at 1062.9

Citing Merryman v. Central Parking System, Inc. , No. 01A0 1-9203-CH -00076, 19

92 WL 330404 (Tenn. Ct.

App. Nov. 13, 1992), the Griggs court found four elementsnecessary under the whistleblower statute:

(1) the plaintiff

’s status as an emp

loyee of the

defendant;

(2) the plaintiff’s refusal to participate in, or to remain silent ab

out, illegal act

ivities;

(3) the employer’s discharge of the [plaintiff] employ ee; and

(4) an exclusive causa

l relationship

betweenthe plaintiff’s r

efusal to partici

pate in or remain silent about illegal activities and the employer’s termination of the employ ee.
Griggs
, 909 F. Supp. at

1063, quoting Merryman , 1992 WL 330404, at *6. The Griggs court found that Griggs did not

establish the sec

ond element. I

t noted that it

was undisputed that Griggs was not explicitly directed to remain silent about illegal activities. Observing that Griggs was discha rg ed after reporting alleged illegalities, the court found that

“Griggs did not face the choice between reporting illegalities and keeping her job ,” stating that “ there must be a fe

ar of dismissal con

temporaneous with the plaintiff’s decision whether to report the illegal activities.” Griggs
, 909 F. Supp. at 1064. The court remarked that “a more

precipitous termi

nation within a few

days or a c

ouple of weeks wo

uld better support a ch arge of retali atory discharge than the five to six weeks lapse of time in this case.” Id. at 1064. Consequently, the Griggs court concluded that the discharg

e was “not enoug

h to establish an implied intention for the Plaintiff to remain silent. . . .” Id.

In addition, the Griggs court observed that the fourth element required the plaintiff to show that her refusal to remain silent was the “sole” reason for the discharge. Id. at 1065. The Court found that there was undisputed evidence supporting the credit union’s asserted reasons for the discharge, and therefore Griggs could not establish that her refusal to remain silent was the sole reason. Id. at 1065-66. Accordingly, the court concluded that Grigg s’ claim under

the whistleblower

statute should be dismissed

. Id. at 1066 . It expressly reserved the issue of “whether a concurrent common law cause of action exists in this action.” Id.

Subs equ ent ly, after having the parties brief the issue of whether a concurrent common la w
cause of action remained, the Griggs court addressed the i ssue. Griggs v. Coca-Cola Employees’ Credit Union, 909 F. Supp. 1066 (E.D. Tenn. 1995). The Griggs court concluded that “a concurrent common law cause of acti on does not exist in t his case for the retalia tory discharge of an employee for refusing to participate in, or for refusing to remain silent about, illegal activities.” Id. at 1067. However, in the alternative, the Griggs court concluded that, even if a concurrent common law cause of action existed, Gri

ggs could not establi sh two essential el ements: a clear d

eclaration of pu

blic policy, and that the plaintiff was discharged for the rea son alleged. Id. at 1070.

The existence of a concurrent common law claim is referenced, but not decided, in Darnall

v. A+ Homecare, Inc. , No. 01A01-9807-CV-0034 1999 WL 346225 (Tenn. Ct. App. June 2, 1999).1 The concurrence by Judge Koch stressed adhe rence to the statutory language that ref usal to participate in or remain silent about illegal activities must be the “sole” reason for the discharge. Id. at *9. The concurrence did not address a concurrent common law whistleblower claim.

2 Under Hodges v. S. C. Toof & Co. , 833 S.W.2d 896 (Tenn. 1992), where a common law tort action pre-dates the statutory claim and the statutory remedies are not explicitly exclusive, the statutory remedies are considered cumulative. Id. at 899. We need not r each that issue in this case.

10 The majority opinion in Darnall states at the outset that the complaint asserted ret aliatory disc harge “based solely upon Tennessee Code Annotated Section 50-1-304.” Id. at *1. After reviewi ng the

common law of

retaliatory discharge, the Darnall court addressed theelements necess ary to esta blish

a claim under the whistleblower statute, noting that it required “an e xclusive causal relationship” betweenthe discharge and the employee’s refusal to par ticipate in, or remain silen t about, ille gal activities. Id. at *5. 1

Thus, the issue presented is one of first impression for

a Ten nes see a ppe lla te c our t, n ame ly, whether a concurrent common law claim remains for retaliator y dis charge of an employee for ref using to participate in or

remain silent about illegal activities, after enactment of Tennessee’s whistleblower statute, Tennesse

e Code Annotated § 50-1-304. We must conclude that any claim to which the whistleblower

statute is applicable must mee t the requ irements of the statute. In particular, the plaintiff must show thathe was discharged solely for refusing to

participate in, o

r remain silent ab

out, illegal activities. It does not make sense to have a concurrent common law whistleblower

claim for which the plaintiff need only show that the re fusal to pa rticipate in or remain silent about illegal activities was a “substantial factor” in the discharge. Therefor e, in this case, if Tennessee’s whistleblower

statute is applica

ble to Guy’s

c laim, h e must show that his refusal to remain silent about illegal activities was the sole reason for his discharge. 2

Con seq uen tly, we must determine whether Tennes see’s whistleblow er statute is appli

cable to Guy’s claim against Mutual. Mutual contends that this is a classic whistleblower claim, governed by the whistleblower statute. Guy argues that the whistleblower

statute is applica

ble only to cl

aims that involve alleged illegal activities of the employer , and is not applica ble to Guy’s

claim that he was discharged for reporting the illegal activities of a third party , namely, Roberson.

Tennessee’s wh

istleblower statut

e states in part:

(a) No employee

shall be dis charged

or terminated sole

ly for ref using to particip

ate in, or for refusi

ng to remain sile

nt about, illegal

activities.

* * *

(c) As used in this section, “illegal activities” means activities which are in violation11

of the criminal or civil code of thi s state orthe United States or any regulation intended to protect the public health, safety or welfare.

Tenn.Code Ann. § 50-1-304. The statute does not state that the “illegal activities” must be

those of the employer. Indeed, the statutory definition o f “illegal a

ctivities” is quite broad, including any violation of the state or federal civil or criminal code, as well as violations of regulations pertaining to public health, safety or

welfare. Tenn. Code Ann. § 50-1-304(c). Under these circumstances, we cannot construe the stat

ute narrowly, limiting

it to claims of alleged illegal activities of the employer.

Thus construed broadly, is the whist leblo wer s tatut e app lica ble to Guy ’s cl aim? In this case, the “illegal activities” reported were those of Roberson, in defrauding Johnson. Mutual, while not

a participant in the fraud, was found responsible by the Tennessee Depa rtment of Commerce an d Insurance fo r giving Robers on the means to acc

omplish his fraud by

enabling him to re

present himself to Johnson as a

Mut ual agent. Thus, while there is no evidence that Mutual violated any civil or criminal code or regulations pertaining to pub l ic health, safety or welfare, Mutual clearly suffered adverse consequences f

rom th e reporting of R

oberson’s illeg

al activities, sinc

e it was required

to reimburse Johnson.

Guy asserts that, at the time

he reported the possible fraud to the State, he believed only that John Hancock

Insurance was at risk because Roberson was a contrac ted agent for John Hancock. Guy maintains that, at the time his report was made, he did not know that Mutual could be potentially h

eld responsible for the fraud perpetrated against Johnson.

Mutual contends that Guy’s assertion “defies logic,” pointing to the termination notice filed withthe State, allegedly bearing Guy ’s signat ure, stating that Roberson’s agency contract with Mutual had been terminated. However, Guy disputes that the signature on the not ice is his. Mutual also questions Guy’s assertion in view of the f act tha t Guy knew that Johnson’s stock certificate was payable to Mutual, and that Guy sent a Mutual agent to visit Joh nson. While

these facts bear on Guy’s credibility, for purposes of a summary judgment motion, the non-movant’s version of the facts must be accepted as true. See Bain , 936 S.W.2d at 622. The Court is “to view the evidence in a light favorable to the nonmoving party and allow all reasonable i

nferences in his

favor.” Byrd v. Hall, 847 S.W.2d 208, 215 (Tenn. 1993). Thus, under Guy’s version of the facts, at the time he made the report to the Tennessee Department of Commerce and Insurance, he did notknow that Mut ual could be deemed at fault for enabling Roberson to defraud Johnson.

The whistleblower statute “requires a situation in which an employ ee must eithe r remain silent about an illegal activity or face the possibility tha t he may be discharged.” Merryman , 1992 WL 330404, at *7. Other case s have held

that “there must be a fear of dismissal contemporaneouswith the plaintiff’s decision whether to report the illegal activities.” Henderson v. Corrections Corp. of America
, 918 F. Supp. 204, 210 (E.D. Tenn. 1996). Accepting Guy’s version of the facts as true, at the time Guy made the report to the Tennessee Department of Commerce and Insurance, he

did not know that his report c

ould h ave adverse consequences for Mutual. Guy “did not fa ce the choice betweenreporting illegalities and keeping his job.” Id. , citing Merryman
, 1992 WL 330404, at *7,3 Given the procedural posture of this case, we do not grant Mutual’s motion for summary

judgment as to any

whistleblower cla

im because the pla

intiff asserts onl

y a common la

w claim in his complaint. The whistleblower statute is asserted as a defense by Mutual; Mutual contends that the plaintiff’s only alleged claim is under the whistleblower statute, and that Guy cannot prove the required elements under the whistleblower statute.

12 and Leeman v. Edwards , No. 01A01-9401-CV-00050, 1994 WL 560889, at *5 ( Tenn. Ct. App. Oct. 14, 1994). Rather, lon

g after Guy

reported Robers

on’s fraud, it tur

ned out that Mutual h

ad some culpability

and, ac cording to Guy, Mutual began a campaig n to discharge Guy for reporting Ro berson’s fraud and bringing adverse consequences to Mutual. Under these circ umstances, we mus t find that Tennessee’s whistleblower statute, Tennessee Code Annotated § 50-1- 304, is inapplicable to Guy’s cla

im. 3

Guy’s claim, if cognizable, must be a common law claim

of retaliatory discharge in violation of “a clear public policy evidenced by an unambiguous constitutional, statut ory, or regulatory provision.

. . .” Mason v. Seaton , 942 S.W.2d 470, 475 (Tenn. 1 997), quot ing Reynolds , 887 S.W.2d at 823. Such a discha

rge is actionab

le if “the employ

er’s violation wa

s a substantial factor in the employee’sdischarge.” Mason , 942 S.W.2d at 475. No rmally, in or

der to recogni

ze an employee’s claim as actionable, “very specific statutory violations [must be] charged, and usually the employee’ s personal exposure to civil or criminal sanctio ns [is] emphasized.” Chism , 762 S.W.2d at 556. Tennessee courts ha

ve noted t hat, “[i]n order to state

a claim for relief for this very exceptional tort action, the pleader must s how clea r violation of some well-defined and established public policy.” Id.

In this case, it is undis puted that Roberso

n’s action s were illegal. Guy notes that, under Tennessee Code Annotated§ 56-6-155(a), Tennessee’s Commissioner of Commerce and Insurance may suspend the license of an agent for actions such as Robers on ’s and may a lso impose civil penalties. Tenn. Code Ann. § 56-6-155(a) and (b).

The issue becomes, the

n, whether Guy

had a duty

to report Roberson’s actions, and whether Guy had “personal exposure to civil or criminal sanctions . . .” if he failed to do so. Chism , 762 S.W.2d at 556. Tennessee Code Annotated § 56-6-155 contains no express provision requiring that conduct such as Roberson’s be reported. Any statutory duty to report is derived from Tennessee Code Annotated § 56-6- 153, which provide s:
(a) Any insurance company which enters into or term inat es an agency contract or agreement

with a licensed insurance agent or limited insuranc

e representati

ve shall, within thirty (

30) days, no

tify the comm

issioner on the pre

scribed form.

* * * (c)(1) If the termination of any age ncy contract or agreement with an insurance agent4 Guy asserts that, as the general manger of Mutual’s Memphis office, any obligation of Mutual to report Rob

erson’s transg

ressions would fa

ll to him.

13 or l imit ed insurance representative is for any of the ca uses listed in § 56-6-155, the insurance company

shall:

(A) Notify the commissioner on the prescribed form. . . . * * * (d) Any insurance company violating the provisions of this section may be subject to a civil penalty of up to five hundred dollars ($500) for each violation, in addition to such other penalties as may be provided by this code.

Tenn. Code Ann. § 56-6-153 (emphasis added). Therefore, unde r this statute, Mutual, but not necessarily

Guy, 4 would be required to report the termination of Roberson’s agency contract for fraud

as mandatedin Section 56-6-155. The penalty under this statute for failing to do so would be a $500 fine levied against Mutual, not Guy.

Moreover, under Guy’s version of t he fac ts, he was not aware at the time of his report that Roberson was ever considered an agent of Mutual; consequently , at the time Guy reported Roberson’s conduct, he would

not have been notifying the Department of “the termination of any agency contract

or agreement with an insurance agent . . . for any of the causes listedin § 56-6-155 . . . .” Tenn. Code Ann. § 56-6-153(c)(1)(A). Indeed, although the re

cord contains a te

rmination notice a

pparently sent by Guy in order to notify the Department of Roberson’s termination, Guy disputes that the signature

on the notice is his. Th

erefore, Guy’s reporting of Roberson’s conduct to the D epartment was not pursuant to any obligation of Mutual or Guy under Section 56-6-153.

Com missio ner

Sizemore stated in his affidavit that “if any agent or insurer knowingly and willfully fails to report violations of Tennessee Code Annotated § 56-6-155(a), or any other statute, this Department woul d be compel led to take action against that agent or insurer. . . .” Neither Commissioner Sizemore nor Guy cite any statutory or regulatory basis for this assertion. While the “administrative construction of statutes by officers char

ged with the duty

of their enforc

ement . . . is entitled to great conside

ration by the

courts . . . ,” Sizemor

e’s affidavit doe s not indicate that t his assertion stems from the construction of a statute. State ex rel Chapdelaine v. Torrence , 532 S.W.2d 542, 54 7 (Tenn. 1975). Even if it did, the Court would not be bound by it. Id. Thus, t h e under pinni ngs for Guy’s duty to report Roberson’s misconduct fa ll short of the standard discussed in Chism , which state

d that in a claim of retaliatory discharge in violation of public policy , the employee “usually” faces “personal exposure to civil or cr im inal sanctions,” a

nd “very sp

ecific statutory violations” are c

harged. This dis

tinguishes Guy ’s claim from Reynolds v. O zark Motor Lines, Inc. , 887 S.W.2d 822 (T enn. 1994) , in which the plain tiff truck driver

s were allege

dly discharged

for failing to make certain trips which their employer instructed them to make w ithout giving them adequate time to perform safety inspections of their truck s as re quire d by law . In Reynolds
, the truck driver s faced sp e cific statutory criminal penalties for failing to conduct such inspections. Under

the circumstances, the Tennessee Supreme Court held that the truck drivers had14

a common la w claim for r etaliatory di scharge for the employer’ s violation of a wel l-defined public policy. See Reynolds , 887 S.W.2d at 824-25.

Nevertheless, Tennessee Code Annotated § 56-6-155 is clearly a public welfare statute that is intended to protect consumers from unscrupulous acts by insurance ag ent s. Guy’s ac tions in reporting Roberson to state authorities furthered the purposes of § 56-6-155 and prevented Roberson from continuing his

fraudulent conduct. In Mason v. Seaton , 942 S.W.2d 470, 475 (T enn. 1997), in discussing the purpose of the whistleblower statute, the Tennessee Supreme Court stated that “[t]he enactment [of the whistleblower statute] is a statutory recognition that the protection of employees who report violations of laws, regulations, and rules is a part of Tennessee public policy .”

Under these cir

cumstances,

this case presen

ts a close question

as to whether a common law claim for retaliatory discharge in violation of public policy should be recognized. As noted above, the Tennessee Supreme Court has cautioned that, in the absence of leg islative enactme

nt, such a claim should be recognized “

only in the mo st ex traordinary circumstances. . . .” Watson , 789 S.W.2d at 540. Despite the asser

tion in Commissioner Size more’s affidav

it, Guy points t

o no statute o r regulationrequiring Guy to report Roberson’s conduct, or showing that Guy had “personal exposure to civil or criminal sanctions” for failing to do so. Chism , 762 S.W. 2d at 556. Neverthe less, Roberson’s conduct violated T ennessee Code An

notated § 56-6-15 5, a sta tute clear ly enacted

to protect the public from insu

rance fraud. I

f such misconduct w

ere not reporte

d by those wit

h knowledge, enforcement

of Section 56-6-155 would be difficult, and the public welfare would suffer. The Tennessee Supreme Court has stated that “the protection of employees who report violations of laws, regulations, and

rules is a part of

Tennessee public policy.” Mason , 942 S.W.2d at 475. Under these circumstan ces, we must conclude th at Guy states a c ommon law c laim for ret aliatory disc harge in v iol ati on o f Ten nes see p ubl ic p oli cy.

Next, we must consider whether Guy has proffered s uffici ent evidence to create a genuine issue of fact as to whe

ther his report of

Roberson’s condu

ct was a “substan

tial factor” in hi

s termination. In this case, it is undisputed that Mutual had other reasons for the termination of Guy’ s employment.

Guy does not

dispute the fact that, at the time he reported Robers on’s misconduct to state authorities, he did not inform Mutual of his action. Guy does not dispute that the confidential letter from Bidroski on the sexual harassment claim was distributed by an em ployee und er his supervision to employees throughout the Memphis office. Guy does not dispute the call to Larry Paylor or the gist of his conversation with Larry Paylor.

In add ition, we must examine the timeline of events between Mutual’s learning of Guy’s communication to the Dep artment of C ommerce and Insurance and Guy ’s discharge. While Guy reported Roberson to the Tennessee Department of Insurance

in January or February 1994, he did not report the Roberson matter

to Mutual’s Law Division until October 1994. On November 4, Rooney wrote a letter to Lil

ly praising Guy’s job perfor mance, in which Rooney recommended that Guy receivean increase in hi

s “guaranteed” salary. The re cord does not indicate whether Rooney knew of the Roberson incid

ent at the time he w

rote this l et ter. On November 17, 1994, the Tennessee Department

of Commerce and Insurance notified Mutual tha

t it was liable

for Roberson’s misconduct15

a nd wou ld h ave t o ma ke re sti tut ion to J ohn son . So on t here aft er, G uy wa s no tif ied by Mutual’ s Human Resources Office that he would not receive

an increase in

his “guaranteed” salary. I n January 1995, the sexual harassm ent letter was mis

tak enl y d istributed by a staff employee under Guy’s supervision. The female employee who alleged she had be en harassed told Guy she

felt threatened, Guy rebuffed her, and she reported the conve rsation to Mutual.

On Mar ch 1 , 19 95, Guy m et w ith Roo ney, Bidroski, and Beach, and Rooney handed Guy the letter outlining areas of “continuing concern” that Mutual had with Guy’ s performance. The letter specified that Mu

tual was concer

ned about:

Your [(Guy’s)] apparent

lack of understanding of the personal and corpor ate liability invo lved in communicating with the Tennessee Department of Insurance without notifying Agency

Sales Management; and

Your lack of judgement

[sic] as a member of the Mutual of Omaha management team which was displayed in your communication involving the re sults of the sexual harassment allegation.

(Emphasis

added.) At this mee

ting, Beach a

sked Guy if h

e was resignin

g from M utual, after he expressed extreme disappointment about his pa y reduct ion. In April 1995, while on “written notice,” Guy admittedly made disparaging comments about Mutual to La rry Paylor. On April 19, 1995, after Paylor inf orm ed M utu al o f Gu y’s c omm ent s, M utu al d isc harg ed G uy. M utu al t old Guy that hi s discharge was due to his unacceptab le performance

as a general ma

nager, but did no

t tell him that his discharge was due in part to his comments to Larry Paylor.

In Griggs v. Coca-Cola Employees’ Credit Union
, 909 F. Supp. 1059 (E.D. Tenn. 1995), the plaintiff employee reported alleged irreg ularities in late 1992 or

early 1993, which resulted in an audit

on February 26, 1993. The results of the audit, critica

l of the employ

er, were mailed

in early March 1993. The plaintiff was discharged on April 22, 1993, pur

portedly ba

sed on non-retali

atory rea sons. The Griggs court observed th at while it did not wis

h

to establish any sort of

time frame within which the terminationof an employ ee would create any sort of presumption of a retaliatory discharge, the Court does observe that

a more precipitous termination within a few days or a couple of weeks would better support a charge of

retaliatory discharge than the five to six weeks

lapse of time in this

case.

Id. at 1064. The Griggs court concluded that the plaintiff did not make out a cause of action under the whistleblower statute or under the common law. See Griggs , 909 F. Supp 1059, 1064 (E.D. Tenn. 1995), and Griggs , 909 F. Supp. 1066, 1070 (E.D. Tenn. 1995). In this case, Mutual learned16

that it was potentially

liable to Johnson for Roberson’s misconduct in November 1994, and Guy was not discharged until April 1995, approximately five months later.

Guy asserts that Mutual’s “alleged non-retaliatory reasons f or [his] discharge .

. . were simply pretextual.” He contends that the reasons given by Mutual were the result of Mutual’s “campaig n of retaliation” against him for reporting Roberson’s misconduct and t hereby exposing M

utual to liability for the fraud perpetrated against Johnson.

In Chism , the Tennessee Supreme Court stated that the retaliatory reason must be a “substantial factor” in

the employee’s

dismissal in order to support an action for retaliatory discharge. See Chism , 762 S. W.2d at 556. In Thomason v. Better-Bilt Aluminum Prods., Inc. , 831 S.W.2d 291, 293 (Tenn. Ct. App. 1992), perm. to app. denied , April 27, 1992, this Court stated that in order to reach the jury on the question of whether the retaliatory reason was a substantial factor in the discharge, the emp loyee must pr esent either (1)

direct evidence

that the retaliat

ory reason

was a substantial factor, suchas an admission by the employer or proof that the employer ha

d an express policy of discharging employ

ee s for the retaliatory reason, or (2) the employ ee must present “compelling circumstantial evidence” that the retaliatory reason was

a substantial factor in his or her discharge. Mere proof that the employee participated in a “protecte d activity” and that

the dischar ge followed is not su fficient to sho w that the retaliatory reason was a substantial factor, even if the proximity in time between the two events was very short. See Austin v. Shelby County Gov’t , 3 S.W.3d 474, 481 (Tenn. Ct. App. 1999).

Guy’s evidence in

this case cannot be characterized as strong. He was fired some five months after Mutual learned it w

ould have to pay

restitution to

Johnson, and Mutual’ s communication wit h Guy about the report admonishes Guy for communicating with the Department of Insurance “without notifying Agency Sa

les Managemen

t,” which is consist

ent with Mutual’s position. However, Guy is able to show that the adverse consequences to h im began within a fairly short time after Mutual learned it would h ave to pay

restitution, and Rooney’s letter to Guy emphasizes the “persona l and corporate liability” stemming from the report. Under these cir cumstances,

we conclude that Guy has presented barely enough evidence from which the fa ct-finder cou ld conclude that his report to the State of Roberson’s fraud was a substantial factor in his discharge.

In sum, we find that any cla im to which the whistl

eblower statute i

s applicable must

meet the requirements of the statute. Any common law whistleblower claim would

be subsumed within the whistleblower

statute and its elements would not diff er from the stat

utory requirements. This includes the requirement

that the employ

ee’s refusal to

participate in or

remain silent about illegal activities be the sole reason for the employee’s discharge. The whistleblower

statute may a

pply, under

certain circ umstances, to claims involving the reporting of the illegal activities of a person other than the employer. However, the whistleblower statute does not apply to Guy ’s claim. At the time of Guy’s report, Guy alleges

that he did not know t

hat Mutual could

be found at fault for Roberson’s fraud, and thus did not face the choice between reporting illegal activity and remaining employed. Guy

states

a common law claim for retalia tory discha

rge in violation o

f Tennessee publ

ic policy, a

ctionable if he presents suffic

ient evidence tha

t retaliation was a

substantial facto

r inhis discharge.

In response17

to Mutual’s summary

judgment motion, G

uy presents

barely enough evidence from

which the trier of fact could conclude that retaliation was a substantial factor in his discharge. Therefore, the trial court’s denial of Mutual’s motion for summary judgment is affirmed.

The decision of the trial court is affirmed. Costs are assessed against the Appellant, Mutual of O mah a Ins uran ce C omp any, and its sur ety, for whi ch ex ecut ion may i ssu e if nece ssa ry.

HOLL Y KIR BY LI LLA RD, J.