Title: Larson v. Ruskowitz
Citation: 252 Kan. 963, 850 P.2d 253
Docket Number: 68,040, 68,044
State: Kansas
Issuer: Kansas Supreme Court
Date: April 16, 1993

252 Kan. 963 (1993)
850 P.2d 253
CYNTHIA SCOTT LARSON and CURTIS GRAHAM, Appellees,
v.
JOSEPH RUSKOWITZ and WYANDOTTE COUNTY BOARD OF COMMISSIONERS, Appellants.
Nos. 68,040 and 68,044

Supreme Court of Kansas.
Opinion filed April 16, 1993.
R. Jeff Fendorf, assistant county counselor, argued the cause and was on the brief for appellants.
Jeffrey A. Dehon, of Kansas City, argued the cause and was on the brief for appellees.
The opinion of the court was delivered by
McFARLAND, J.:
These are consolidated retaliatory discharge actions in which the plaintiffs contend their terminations as supervisors with Wyandotte County Community Corrections resulted from their comments criticizing the operation of the agency by its director, Joseph Ruskowitz. Verdicts were entered in favor of the plaintiffs, as follows:
The defendants appeal therefrom.
For their first issue on appeal, the defendants contend the district court lacked subject matter jurisdiction herein. Their argument is as follows. On September 28, 1990, the plaintiffs were advised that they would be laid off effective October 31, 1990. The plaintiffs, in accordance with Wyandotte County's grievance *965 procedures, filed grievances protesting their layoffs to the defendant Board of County Commissioners (Board), and the Board upheld the layoffs on October 30, 1990. The plaintiffs then followed the procedures set forth in K.S.A. 12-105b for filing claims for actions under the Kansas Tort Claims Act (K.S.A. 75-6101 et seq.).
The defendants contend the proper procedure was for the plaintiffs to have appealed the decision of the Board affirming the layoffs to the district court under K.S.A. 19-223, which provides:
The defendants acknowledge that this issue is being raised for the first time on appeal. The defendants argue that lack of jurisdiction may be raised at any time and that reviewing courts have a duty to raise the issue sua sponte, citing Misco Industries, Inc. v. Board of Sedgwick County Comm'rs, 235 Kan. 958, 685 P.2d 866 (1984), and Dick v. Drainage District No. 2, 187 Kan. 520, 358 P.2d 744 (1961).
Inasmuch as this issue is a challenge to jurisdiction, we will consider the issue, although it is raised for the first time on appeal.
In Dutoit v. Board of Johnson County Comm'rs, 233 Kan. 995, 998-99, 667 P.2d 879 (1983), we discussed K.S.A. 19-223 and held that it provided the exclusive method by which a district court may review a judicial or quasi-judicial decision of a board of county commissioners but was inapplicable to appeals from a legislative-type decision by a board of county commissioners.
What type of decision is involved herein? In September 1990, the Board had approved a reorganization plan submitted to it by the Community Corrections Advisory Board which provided, inter alia, for the elimination of 15 positions including the two held by the plaintiffs. In the filing of the grievances, the plaintiffs were, in essence, asking the Board to reconsider that aspect of *966 the reorganization plan which eliminated their positions. When their efforts at retention of their employment proved unsuccessful, they then brought this action in tort seeking damages for their termination after filing the necessary statutory notice.
We conclude this was an appropriate procedure. The action herein arises out of the employer-employee relationship of the parties. The Board was acting in an administrative capacity in approving the reorganization plan and in declining to modify the plan as requested by the plaintiffs. The tort action herein could have been brought without having sought reconsideration of the reorganization plan. The fact that such reconsideration or review was sought does not lock plaintiffs into a position of being required to exhaust that avenue through the court system in lieu of or as a condition to proceeding under the Tort Claims Act. We conclude the district court had jurisdiction herein.
CAUSE OF ACTION
For their second issue, the defendants contend the case was improperly submitted to the jury. They argue that the district court either failed to make or improperly made certain necessary determinations required by the cause of action. These areas involve determination of whether the statements of the plaintiffs which they contend caused their discharge involved a matter of public concern and application of the balancing test. Before proceeding to a discussion of the facts herein and how the case was judicially handled, an analysis of the cause of action is appropriate.
In their briefs the parties refer to the case as being a "whistle blowing" retaliatory discharge claim. In their briefs the parties treat two related causes of action which differ in significant respects as one, and this blending has, we believe, caused some of the problems present herein. We need to discuss and separate these two causes of action.
Palmer v. Brown, 242 Kan. 893, 752 P.2d 685 (1988), is a good example of a "whistle-blowing" retaliatory discharge action. In Palmer, the plaintiff was a medical technician employed in a laboratory owned by the defendants. Although not directly involved therein, she became aware of the fact that the laboratory was committing Medicaid fraud by billing for tests that were not *967 performed. She reported this fact to "unspecified authorities" and was terminated from her employment for such action.
In Palmer, we noted that it is public policy to encourage citizens to report crimes and that Medicaid fraud is a felony offense, and we traced the development of retaliatory discharge actions based upon "whistle-blowing." We then stated:
Significantly, there is no mention in Palmer of the First Amendment determination that the employee's communication was a matter of "public concern," or utilization of a balancing test. Justification for the "whistle-blowing" cause of action is the public policy of encouraging employees to do their duty as citizens and report violations pertaining to public health, safety, and general *968 welfare. The same public policy extends to all employees  whether in the public or private sector. Not to denigrate such cause of action but to assist in differentiating it from the related cause of action, we might characterize the whistle-blowing form of retaliatory discharge cases as involving employees who inform or "snitch" on the employers' violations of laws or regulations out of the pure motivation of good citizenship. Public policy requires that such persons be protected from being discharged for their acts. No protection is afforded employees who blow the whistle or inform out of corrupt motive, personal gain, spite, malice, etc.
Congress has enacted legislation, commonly known as the "Whistle-Blowers Protection Act" (5 U.S.C. § 1201 et seq. [1988]), which protects federal employees who have disclosed information they believe evidences:
Actions by employees-at-will based upon retaliatory discharge for having filed workers compensation claims are recognized in Kansas. Cox v. United Technologies, 240 Kan. 95, 727 P.2d 456 (1986); Murphy v. City of Topeka, 6 Kan. App.2d 488, 630 P.2d 186 (1981). As in retaliatory discharge actions based upon whistle blowing, the rationale for allowing such claims is public policy. Also, as in whistle-blowing cases, employees in both the public and private sectors are protected.
This brings us to the type of retaliatory discharge action with which whistle-blowing has been confused herein  the discharge of a public employee for having exercised his or her right of freedom of speech as guaranteed by the First Amendment to the United States Constitution. Illustrative of such cause of action and the requirements therefor is Riddle v. City of Ottawa, 12 Kan. App.2d 714, 754 P.2d 465, rev. denied 243 Kan. 780 (1988). A good summary of the applicable law is set forth therein, although the reference to Palmer v. Brown, 242 Kan. 893, (the *969 whistle-blowing case) should have identified it as such. We quote the following with approval:
Riddle was then remanded with directions to reconsider the First Amendment issue.
Some additional portions of Connick v. Myers, 461 U.S. 138, 75 L. Ed. 2d 708, 103 S. Ct. 1684 (1983), are illuminative and are set forth as follows:
....
We turn now to the facts in the case before us.
The Wyandotte County Community Corrections program operates under the auspices of the Community Corrections Act (K.S.A. 75-5290 et seq.). The operation of the program is funded by grants from the Secretary of Corrections, who establishes rules and regulations for such programs. Each participating county has to submit an operating plan to the Secretary and gain his or her *972 approval thereof. Payment of grant monies may be suspended if the county is not in substantial compliance with the Secretary's minimum operating standards (K.S.A. 75-5296). A Corrections Advisory Board for Wyandotte County was established under K.S.A. 75-5297. The advisory board makes recommendations to the board of county commissioners, the latter being the body politic charged with operating the program.
Joseph Ruskowitz was the director of the Wyandotte County Community Corrections program at all times pertinent herein. In approximately May 1990, he was advised by the Kansas Department of Corrections (KDOC) that he could expect a 22 percent reduction in funding the following year and that his authorized staff positions should be reduced from 43 to 28. Ruskowitz met with the advisory board and it was decided that rather than reduce staff positions, they would prefer to not fill four vacancies, eliminate one position, and reduce services to make up the anticipated shortfall. This solution was presented to the Board and approved by it and then by KDOC. Services such as drug testing and the drug treatment program were eliminated. Additionally, salaries were frozen and probation officers' reimbursements for mileage were eliminated. The employees were concerned about their future and the budgetary restraints imposed. Word of this reached the Board, which sent the county personnel director to talk to two groups of employees  supervisors and nonsupervisory employees. The plaintiffs and one other supervisor were present at the meeting held August 14, 1990. The county personnel director's notes reflect the following was mentioned (without reference to who said what):
"Morale has been torn down.
"Accusations made concerning misuse of funds.
"Many good people leaving the organization.
The mismanagement of funds comments were not relayed to the county commissioners as the personnel officers felt the comments to be unsubstantiated. Two days later, an article appeared *973 in a local newspaper, headlined "County corrections director at odds with employees, state." The article mentioned the budget cuts and reductions in services. It went on to state several agency employees had been interviewed and that most wanted to remain anonymous "for fear of reprisals." The employees were said to have been very concerned over the reduction in services and loss of mileage reimbursements. They were critical of the decision to cut services rather than people. Ruskowitz's style of management was criticized. Neither plaintiff was quoted by name in the article, but both stated they did talk to the reporter writing the article. The only employee quoted was Gwen Hedstrom.
In September 1990, a reorganization plan was submitted by Ruskowitz to the advisory board which, inter alia, eliminated the department performing presentence reports for the courts (this had been a bone of contention with KDOC as this work is performed by court employees in the other Kansas counties). The agency would still do the work, but the report would be added to the work assignment of existing probation-type officers. Also eliminated was the Community Services Department, which checked on how persons assigned to Community Corrections for supervision were getting along in their jobs. This function would be taken on by the probation-type officers. A total of 15 positions were eliminated  the two departments mentioned contained 7 of such positions. Plaintiff Larson was the supervisor of the presentence investigation department and plaintiff Graham was the supervisor of the Community Services Department. The advisory board approved the plan and sent it to the Board. After the Board approved the same, it was sent to KDOC where approval was granted. Thereafter, the plaintiffs were advised they would be laid off in accordance with the plan effective October 31, 1990. These lawsuits resulted.
One of the immediate problems presented is precisely what comments can be ascribed to either or both of the plaintiffs. This is not necessarily a fatal flaw for, as the Court of Appeals held in Pilcher v. Board of Wyandotte County Comm'rs, 14 Kan. App.2d 206, 787 P.2d 1204, rev. denied 246 Kan. 768 (1990), the cause of action will lie if the employer believed the plaintiff was the source of reported protected comments and was terminated for that reason.
*974 However, overriding all is the fundamental error which permeates the entire action. In the district court's instructions, the following is stated as being the plaintiffs' case:
"INSTRUCTION NO. 7
"INSTRUCTION NO. 9
The evidence in this case does not fit the scenario that the employer "was engaged in conduct in violation of rules, regulations, or the law pertaining to public health, safety, and the general welfare," or that the employees were discharged for reporting the violation as in Palmer v. Brown, 242 Kan. 893, 752 P.2d 685 (1988). No claim was made that Ruskowitz misappropriated funds or committed any criminal act. Laws, rules, or regulations concerning public health, safety, or general welfare are not involved in the claims herein. In short, this is not a whistle-blowing case. Thus, the public policy considerations underlying whistle-blowing cases are absent. Rather, any protection to be afforded plaintiffs must come through their First Amendment rights of freedom of speech as discussed in Riddle v. City of Ottawa, 12 Kan. App.2d 714, 754 P.2d 465, rev. denied 243 Kan. 780 (1988), and cases cited therein, subject to the requisite threshold determinations previously discussed.
In this issue, the defendants argue the threshold requirement of establishing any of plaintiffs' speech was protected, i.e., a matter of public concern, was not met herein and also that the district court erred in not making the threshold balancing test, if some speech was found to be protected. There is nothing in the record to indicate any threshold determinations were made *975 herein by the district court. There is also absent any indication the district court' was requested to make any such determination. This latter point is troublesome.
There have been few cases in Kansas involving retaliatory discharge based upon statements made by employees. Palmer and Riddle involve the subject and follow divergent tracks as previously discussed. Neither attempts to differentiate between the legal requirements for a whistle-blowing action and a public employee's claim based upon the First Amendment as there were no issues in either requiring such a discussion. Under the totality of the circumstances herein, we believe that the interests of justice require that the judgments herein be reversed and that the cases be remanded for further proceedings consistent with retaliatory discharge actions based upon violation of public employees' First Amendment rights.
On remand, the district court is directed to make the requisite threshold determinations. This involves determining precisely what statements each of the plaintiffs made (or what the defendants believed they made). Such statements must then be judicially winnowed to determine if any are in the protected category  namely involving a matter of public concern. If any such statements are found to exist, the balancing test must be performed in which the protected speech is weighed against the employer's rights. In addition, in these cases there is the matter of the defendants' contentions that the plaintiffs were not laid off for what they said, but as the result of a reorganization mandated by the budget crunch created by KDOC. In making the threshold determinations, the totality of the circumstances must be considered.
INSTRUCTIONS
The defendants claim numerous errors in the instructions. The complained-of instructions are essentially patterned after those appropriate to a whistle-blowing case. Nothing would be gained from an analysis thereof in light of our previous determination.
The judgment is reversed, and the case is remanded with directions for further proceedings consistent with this opinion.