FILED

May 22, 1997

Cecil Crowson, Jr.

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE

WESTERN SECTION AT JACKSON

______________________________________________________________________________

JIM VOSS, Shelby Circuit No. 33592997 

C.A. No. 02A01-9604-CV-00082

Plaintiff,

Hon. W. B. Acree, Judge

v.

SHELTER MUTUAL INSURANCE COMPANY,

SHELTER GENERAL INSURANCE COMPANY,

and SHELTER LIFE INSURANCE COMPANY

OF COLUMBIA MISSOURI,

Defendants.

GERALD F. EASTER & KAREN R. CICALA, Memphis, Attorneys for Plaintiff.

JAMES E. CONLEY and JOHN H. DOTSON, Thomason, Hendrix, Harvey, Johnson &

Mitchell, Memphis, Attorneys for Defendants. 

REVERSED AND DISMISSED

Opinion filed:

______________________________________________________________________________

TOMLIN, Sr. J.

Jim Voss (hereinafter “Voss” or “Plaintiff”) filed suit in the Circuit Court of

Shelby County against Shelter Mutual Insurance Company, Shelter General Insurance

Company, and Shelter Life Insurance Company of Columbia, Missouri, (hereinafter

“Shelter” or “Defendant”) seeking damages allegedly caused by a breach of contract,

wrongful termination of agency agreement, retaliatory discharge, and libel and slander. 

The trial court granted summary judgment in favor of Shelter on all claims except that

of retaliatory discharge. The case was tried to a jury, which resulted in a verdict in

favor of plaintiff in the amount of $165,077.00. The trial court overruled Shelter’s

Motion for a Judgment NOV, or In the Alternative, for a New Trial. Shelter has raised

two issues for our consideration on appeal: Whether the trial court (1) erred in failing to

grant its Motion for a Directed Verdict at the close of plaintiff’s proof as well as at the

close of all the proof; and (2) in failing to properly charge the jury as to the law of

retaliatory discharge. For the reasons hereinafter stated we reverse the judgment of the

trial court and dismiss.

Plaintiff started in the insurance business as an employee of Shelter in 1982. In

1984 plaintiff entered into an agency agreement with Shelter, under which he
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knowingly remained an employee-at-will throughout the course of his employment. 

In mid 1991 after some conversations with fellow Shelter employees and after

attending a sales meeting in his area, Voss made a telephone call to the Tennessee

Department of Insurance and spoke with an official in that department. At that time

Voss voiced his complaints and objections concerning the potential increases of

insurance rates by Shelter, along with some management complaints.

This conversation took place some time in July, 1991. Later that month David

Williams, the insurance department official with whom Voss talked, contacted an

employee of Shelter and advised him of the details of this conversation. Several days

later, Shelter, through its Tennessee sales manager, terminated Voss’s employment. 

This suit was filed some two years later. 

I. The Directed Verdict Issue.

 Shelter moved for a directed verdict at the close of plaintiff’s proof, and it was

overruled. Shelter renewed its motion at the close of all the proof. It was again

overruled. These two rulings by the trial court were preserved by Shelter in its Motion

for Judgment NOV or in the Alternative, for a New Trial, where the trial court once

again ruled in favor of plaintiff. The principal if not sole basis of each of the two

motions was that there was no proof by plaintiff of any illegal activity on the part of

Shelter. 

Our scope of review is as follows, as stated by the supreme court in Williams v.

Brown, 860 S.W.2d 854, 857 (Tenn. 1993):

 On review of the grant of a directed verdict on motion of a defendant, it

is not the office of an appellate court to weigh the evidence. Rather, it

must take the strongest legitimate view of the evidence in favor of the

plaintiff, indulging in all reasonable inferences in his favor, and

disregarding any evidence to the contrary. The trial judge’s action may be

sustained only if there is no material evidence in the record that would

support a verdict for the plaintiff, under any of the theories that he has

advanced.

Both Voss and Shelter in their respective briefs before this court rely upon the

provisions of T.C.A. § 50-1-304, obviously drawing differing conclusions therefrom. 

The pertinent provisions of this statute, sometimes referred to as “The Whistle
3

Blower” statute, codified as T.C.A. § 50-1-304, reads as follows:

50-1-304. Discharge for refusal to participate in or remain silent about illegal

activities, or for legal use of agricultural product—Damages—Frivolous

lawsuits.—(a) No employee shall be discharged or terminated solely for

refusing to participate in, or for refusing to remain silent about, illegal

activities.

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

in violation of the criminal or civil code of this state or the United States

or any regulation intended to protect the public health, safety or welfare.

(c) Any employee terminated in violation of subsection (a) shall have a

cause of action against the employer for retaliatory discharge and any

other damages to which the employee may be entitled.

* * * *

This enactment of a statutory cause of action, which took place in 1990,

embodies a common-law cause of action, initially recognized as an exception to the

employee at-will doctrine in Clanton v. Cain-Sloan Co., 677 S.W.2d 441 (Tenn. 1984). 

Our supreme court previously considered this cause of action in its common-law form

in both Chism v. Mid-South Milling Co., Inc., 762 S.W.2d 552, 555-57 (Tenn. 1988)

and shortly thereafter in Watson v. Cleveland Chair Co., 789 S.W.2d 538, 544 (Tenn.

1989). The Chism court, while recognizing the cause of action found that there was

none on the facts of the case there presented.

Both the Chism court and the Watson court showed reluctance, in our opinion, to

fully embrace this cause of action. The Chism court stated the importance of basing the

cause of action upon public policy clearly “evidenced by an unambiguous

constitutional, statutory or regulatory provision.” Id. at 556.

That court noted that public policy guidance was necessary because a balance between

the employer’s right to terminate an at-will employee over management and public

policy decisions and the employee’s right to be protected from unlawful discharge lay

at the heart of the law of retaliatory discharge. Id. at 555.

In Watson the court reflected its reluctance “to establish public policy or adopt

an exception to the common-law by placing [its] imprimatur thereon in the absence of

some constitutional or legislative precedent.” Id. at 544. 

In Merryman v. Central Parking System, Inc., 1992 WL 330404 (Tenn. App.
4

1992) after analyzing “the framework of analysis of a common-law wrongful or

retaliatory discharge action”, this court found four elements were necessary for the

existence for a cause of action under the Act:

(1) the plaintiff’s status as an employee of the defendant;

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

activities;

(3) the employer’s discharge of the employee;

(4) an exclusive causal relationship between the plaintiff’s refusal to

participate in or remain silent about illegal activities and the employer’s

termination of the employee.

Id. at page 6. See also Anderson v. Standard Register Co., 857 S.W.2d 555, 585 (Tenn.

1993).

While not relevant to the issue before this court at this time, our supreme court in

the case of Mason v. Kenneth M. Setton, et al, No. 03S01-9606-CV-00061 slip op.

(Tenn. April 7, 1997) has held that this Act does not require a showing that the

employer instructed the employee to refrain from reporting the illegal activity. In so

ruling the Mason court stated: “Remaining silent is the opposite of speaking out, and

refusing to remain silent is the same as speaking out. The clear meaning of the statute

is that employees have the absolute right to speak out about illegal activities in their

work places.” Id. at page 19.

We next turn to the first element of plaintiff’s prima facie case, i.e., whether he

had engaged in protected activity. In that regard the Act provides that “no employee

shall be terminated solely for . . . refusing to remain silent about, illegal activities.”

T.C.A. § 50-1-304(a). “Illegal activities” is defined as “activities which are in violation

of the criminal or civil code of this state or of the United States, or of any regulation

intended to protect the public health, safety, or welfare.” T.C.A. § 50-1-304(b). The

incident that would have to rise to this level to satisfy this definition would of course be

plaintiff’s conversation about defendant, related in a telephone call to a member of the

Tennessee Insurance Department. Both parties stipulated that the contents of said

conversation were specifically detailed in the following memorandum entered into

evidence at trial: 
5

TO: Max Dills

From: Lanny Barton

David Williams of the Tennessee Insurance Department called today

concerning the status of an auto rate filing.

In the conversation he stated Shelter has an agent who is trying to get us

“in a whole bunch of trouble”. The agent, Jim Voss of Somerville,

Tennessee recently called David. David said the agent was “mad, real

mad”. David said the same agent also called him last year. David made

the following comments about the phone conversation:

-Agent was extremely upset with rate increases in all lines. 

He stated Shelter is running him out of business because the

rates are so high. Agent stated the company is making so

much money that we recouped all of 1990 losses in the first

quarter of 1991. Agent stated he was sending David a copy

of a letter from the Tennessee State Sales Manager which

included this information.

-Agent stated the company was “cleaning up”. Company

management is looking out only for themselves, not the

policyholders.

-An employee was promoted to President only one to one

and one-half years before retirement only so the employee

could receive higher benefits.

-Someone should be watching out for this company. There

will be a change in presidents in the future and it has already

been worked out as to who will get the position.

David also said the agent mentioned he has the Secretary of the Speaker

of the Tennessee Senate (Wilder) insured.

David suggested that someone from Shelter might want to talk to the

agent. David requested that his name not be used but he realized that the

agent would know where the information came from.

While there is other testimony by plaintiff in the record as to what may have

prompted plaintiff to call the Insurance Department, there is nothing in the record to the

effect that plaintiff told any of this to the Insurance Department official. 

Plaintiff contends that The Public Protection Act is a remedial statute, in that it

introduces regulations conducive to the public good, and as such should be construed

liberally and in furtherance of the statute’s purpose, citing Loftin v. Langsdon, 813

S.W.2d 475 (Tenn. App. 1991). For the sake of this opinion, we will concur. However,

we point out that in Loftin the middle section of this court set forth several other long

standing rules of statutory construction that are to be followed by the courts of this
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state. Some of these tried and true principles are as follows: In construing a statute it is

the duty of the court to give every word and phrase meaning. United Canners, Inc. v.

King, 696 S.W.2d 525, 527 (Tenn. 1985). Questions involving statutory construction

must be answered in light of reason, having in mind the object of the statute and the

mischief it aims at. State v. Netto, 486 S.W.2d 725, 728 (Tenn. 1972). Furthermore, in

construing a statute the intention of the legislature is to be gathered from words it has

used and not from words it has chosen not to include. Dwyer v. Progressive Bldg. &

Loan Assoc., 20 Tenn. App. 16, 94 S.W.2d 725, 729 (1935). This statute, like all

statutes, must be applied in its present form unless doing so would result in “manifest

injustice.” Scarboro v. First American Bank, 619 F.2d 621 (6th Cir. 1980). And lastly,

we must take the words of this statute in their natural and ordinary sense without

forcing a construction upon them which would limit their meaning. State v. Thomas,

635 S.W.2d 114 (Tenn. 1982).

When we examine the contents of the sole conversation between plaintiff and the

official of the Tennessee Insurance Department, which by stipulation was admitted by

plaintiff to be “relatively accurate”, and to which plaintiff did not seek to add any

content, we are of the opinion that plaintiff failed to introduce evidence of any “illegal

activities”—namely, activities “described in violation of any civil or criminal code or

regulations of this state or country, intended to protect the public health, safety or

welfare.” To the contrary, the first paragraph thereof merely states that the rates being

charged by Shelter were so high that it was adversely affecting his business. The thrust

of the balance of the complaints involve only complaints about management.

Clearly, the activities thus reported in no way could be considered “illegal

activities” within the meaning of the statute. In addition, it was stipulated to by the

parties that no illegal activities on the part of defendant took place in regard to the

establishment of insurance rates. In our opinion this dispute involved only a

combination of a corporate management dispute coupled with a personal financial

problem of plaintiff. Plaintiff did not report any illegal activity in his telephone

conversation with the Insurance Department. There was no proof of any violation of

any established public policy. Accordingly, this court is of the opinion that the trial
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court erred in failing to grant defendants’ Motion for Directed Verdict at the close of

plaintiff’s proof, on the ground that plaintiff failed to establish a prima facie case. 

In light of our opinion as to this issue, we pretermit Shelter’s second issue

pertaining to the jury charge. Accordingly, the judgment of the trial court is 

reversed and plaintiff’s suit is dismissed. Costs in this cause on appeal are taxed to

plaintiff, for which execution may issue if necessary.

________________________________________

TOMLIN, Sr. J.

________________________________________

FARMER, J. (CONCURS)

________________________________________

LILLARD, J. (CONCURS)