Court Opinion

ID: 4216478
Source: CourtListenerOpinion
Date Created: 2017-10-31 17:01:40.920725+00
Date Added: 2024-06-11T13:26:20.748779
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 17a0595n.06

                                          No. 16-6604
                                                                                      FILED
                                                                                 Oct 31, 2017
                                                                            DEBORAH S. HUNT, Clerk
                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT

KOFI ALEXANDER,                                         )
                                                        )
       Plaintiff-Appellant,                             )
                                                        )
                                                               ON APPEAL FROM THE
              v.                                        )
                                                               UNITED STATES DISTRICT
                                                        )
                                                               COURT FOR THE EASTERN
EAGLE MANUFACTURING COMPANY, LLC,                       )
                                                               DISTRICT OF KENTUCKY
                                                        )
       Defendant-Appellee.                              )
                                                        )
                                                        )
                                                        )

BEFORE: GIBBONS, ROGERS, and DONALD, Circuit Judges.

       JULIA SMITH GIBBONS, Circuit Judge. In August 2013, Kofi Alexander witnessed

coworkers engaging in allegedly illegal activity at Eagle Manufacturing Company, LLC

(“Eagle”). After objecting to such activity and reporting it to management, Alexander was fired.

Alexander sued Eagle for wrongful discharge in violation of public policy under Kentucky law.

The district court granted Eagle’s motion to dismiss for failure to state a claim and denied

Alexander leave to file a second amended complaint. We affirm.

                                               I.

       Eagle is a manufacturing company that performs drilling work on engine blocks for

various automobile manufacturers, including Ford Motor Company. Eagle operates out of two

neighboring buildings in Florence, Kentucky. In the first building, Eagle cuts and drills the raw

engine blocks and then inspects them for compliance with the manufacturers’ specifications. If
No. 16-6604, Alexander v. Eagle Mfg. Co.

the drilled engine blocks are non-compliant, they are considered defective and are not to be

shipped to the various manufacturers.

       Because Ford had encountered problems with defective engine blocks from Eagle in the

past, Ford installed its own temporary employees in the Eagle plant to inspect the engine blocks

for compliance with Ford’s specifications. If a drilled engine block is defective, the Ford

employee paints the symbol “E-2” on the non-compliant block, which signifies that it is not to be

shipped to Ford’s manufacturing plants. If the Ford employee finds that a drilled engine block is

compliant, a different symbol is painted on the block that indicates it can be shipped to Ford.

        Once the engine blocks are cut, drilled, and inspected in the first building, they are then

taken to a second building for final processing, inspection, and shipment. Alexander worked in

this second building.    He was responsible for a final compliance check to ensure that no

defective engine blocks were shipped to the automobile manufacturers. Once Alexander signed

off on the engine blocks, they were sent to a quality assurance employee for final inspection and

eventual shipment to the appropriate automobile-manufacturing facility.

       On Friday, August 30, 2013, Alexander was working the second shift at Eagle when he

“noticed three first shift Eagle employees from the other building hanging around the loaded

skids of engine blocks.” DE 11, Page ID 73. Alexander subsequently went on break, but had to

return to his work station when he forgot his car keys. When he returned to his station,

Alexander witnessed one of the first-shift employees “wiping off E-2 codes from defective

blocks with paint remover.” Id. at Page ID 74. Alexander confronted the three first-shift

employees and asked them “who was going to put their name on the documents, signing off on

the shipment of the[] defective engine blocks, and misrepresenting the defective engine blocks as

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No. 16-6604, Alexander v. Eagle Mfg. Co.

good engine blocks.” The first-shift supervisor replied, “I’ll put my f—in name on them,” and

ordered Alexander to return to work. Id. at Page ID 75.

       Soon after the incident, Alexander’s boss, the second-shift supervisor, arrived at the

facility and was informed that Alexander had cursed at the first-shift supervisor. Alexander

denied the allegation and explained to the second-shift supervisor what he had witnessed. The

second-shift supervisor told Alexander to “take the rest of the day off.” Id. at Page ID 76. Prior

to leaving, Alexander told one of the first-shift employees that he intended “to report the incident

and the erasure of the E-2 codes from defective blocks to the HR department” when he returned

to work the following Tuesday.1 Id.

       On Tuesday morning, “Alexander received a phone call from his supervisor telling him

not to report to work, and that he had been fired.” Id. In response, Alexander called Eagle’s

Human Resources (“HR”) Department and told them “he was being fired for discovering and

reporting the first shift’s erasure of E-2 codes from defective engine blocks, and to prevent him

from reporting the fraudulent activity to the HR department” when he returned to work. Id.

Despite telling Alexander it would look into his allegations and follow-up, the HR Department

allegedly never did so. Alexander continued to call Eagle representatives—including the head of

Eagle’s parent company—to protest his termination, but no one responded favorably.

       On July 7, 2015, Alexander sued Eagle in federal court for wrongful discharge in

violation of public policy under Kentucky law. The district court granted Eagle’s motion to

dismiss for failure to state a claim, finding that Alexander’s termination did not satisfy either of

the two public-policy exceptions to Kentucky’s terminable-at-will employment doctrine. The

court also denied Alexander leave to further amend his complaint because it found that any

amendment would be futile. Alexander now appeals.
       1
           Monday was the Labor Day holiday.

                                                 3
No. 16-6604, Alexander v. Eagle Mfg. Co.

                                                 II.

       We review a district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6) de

novo. Kottmyer v. Maas, 436 F.3d 684, 688 (6th Cir. 2006). To survive a Rule 12(b)(6) motion

to dismiss, a plaintiff must provide “enough facts to state a claim [for] relief that is plausible on

its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility

when the complaint’s factual content is sufficient to “allow[] the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). Probability is not required, but there must be more “than a sheer possibility that

a defendant has acted unlawfully.” Id. In analyzing the defendant’s motion, we accept all

factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff’s

favor. Logsdon v. Hains, 492 F.3d 334, 340 (6th Cir. 2007).

       Alexander claims he was wrongfully discharged in violation of public policy under

Kentucky law. In applying Kentucky law, we must “follow the decisions of the state’s highest

court when that court has addressed the relevant issue.” Pennington v. State Farm Mut. Auto.

Ins. Co., 553 F.3d 447, 450 (6th Cir. 2009) (citation omitted). If the Kentucky Supreme Court

has not addressed the precise issue, then we must predict how that court would rule if it were to

confront the question. See id. In making this determination, we may “rely on the state’s

intermediate appellate court decisions, along with other persuasive authority.” Kepley v. Lanz,

715 F.3d 969, 972 (6th Cir. 2013) (citation omitted).         Indeed, “[a] federal court may not

disregard a decision of the state appellate court on point, unless it is convinced by other

persuasive data that the highest court of the state would decide otherwise.” Ziegler v. IBP Hog

Mkt., Inc., 249 F.3d 509, 517 (6th Cir. 2001) (citation omitted). This includes both published

and unpublished state court decisions. Id. (citing Talley v. State Farm Fire & Cas. Co., 223 F.3d
4
No. 16-6604, Alexander v. Eagle Mfg. Co.

323, 328 (6th Cir. 2000)). As always, we must be wary of adopting “substantive innovation[s]”

in state law. Combs v. Int’l Ins. Co., 354 F.3d 568, 578 (6th Cir. 2004). Thus, “when given a

choice between an interpretation of [state] law which reasonably restricts liability, and one which

greatly expands liability, we should choose the narrower and more reasonable path.” Id. at 577

(citations omitted) (alteration in original).

        Under Kentucky law, an employer may generally discharge an at-will employee “for

good cause, for no cause, or for a cause that some might view as morally indefensible.”

Firestone Textile Co. Div. v. Meadows, 666 S.W.2d 730, 731 (Ky. 1983) (citation omitted).

Kentucky courts recognize a narrow exception where the discharge was “contrary to a

fundamental and well-defined public policy as evidenced by [an] existing . . . constitutional or

statutory provision.” Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky. 1985). Absent an “explicit

legislative statement[] prohibiting the discharge[,]” only “two situations exist where ‘grounds for

discharging an employee are so contrary to public policy as to be actionable.’” Id. at 402

(quoting Suchodolski v. Michigan Consol. Gas Co., 316 N.W.2d 710, 711 (Mich. 1982)). The

first is where the employee was discharged for “fail[ing] or refus[ing] to violate a law in the

course of employment.” Hill v. Ky. Lottery Corp., 327 S.W.3d 412, 422 (Ky. 2010). The second

exists where the employee was discharged for exercising “a right conferred by [a] well-

established legislative enactment.” Id. Alexander does not identify, nor can we find, any statute

expressly prohibiting his discharge. Thus, his wrongful-discharge claim must fit into one of the

two public-policy exceptions enumerated above. Because Alexander disavowed any reliance on

the second exception, we address the merits of his claim under only the first exception.2

        2
          Although Alexander relies on both public-policy exceptions in his brief, counsel disclaimed any reliance
on the second exception at oral argument.

                                                        5
No. 16-6604, Alexander v. Eagle Mfg. Co.

       Alexander argues that he was discharged for refusing to violate various Kentucky laws—

namely, KRS § 517.020 (deceptive business practices); KRS § 517.050 (falsifying business

records); KRS § 514.040 (theft by deception); and several provisions of Kentucky’s Uniform

Commercial Code. The district court found that Alexander could not satisfy this exception

because he was never affirmatively requested to violate any law. Alexander concedes that he

was never specifically asked to violate the law but argues that an affirmative request is not

required. Instead, he contends it is enough that he witnessed unlawful activity within the

company, objected to it, and proactively refused to participate in it. Although we are not

convinced that the Kentucky Supreme Court would endorse the district court’s “affirmative

request” requirement, we agree that this exception is not broad enough to encompass

Alexander’s wrongful-discharge claim.

       We note, initially, that the cases relied upon by the district court do not resolve the issue.

In those cases, it is true, the court found a wrongful discharge under Kentucky law where an

employee refused to comply with the employer’s affirmative request that he or she violate the

law. See Burton v. Zwicker & Assocs., PSC, 978 F. Supp. 2d 759, 768–69 (E.D. Ky. 2013); Hill,
327 S.W.3d at 422; Ne. Health Mgmt., Inc. v. Cotton, 56 S.W.3d 440, 447 (Ky. Ct. App. 2001);

Sparks v. Henson, No. 2011-CA-423-MR, 2012 WL 5463877, at *7 (Ky. Ct. App. 2012). But

those cases did not create an additional element—an explicit request from the employer that the

employee violate the law—for the tort of wrongful discharge in Kentucky. Instead, the plaintiffs

in those cases merely presented such evidence to prove their respective wrongful-discharge

claims. Cf. Morrison v. B. Braun Med. Inc., 663 F.3d 251, 257 (6th Cir. 2011) (recognizing that,

although prior cases had involved an employer’s explicit request to violate the law, the plaintiff

                                                 6
No. 16-6604, Alexander v. Eagle Mfg. Co.

was not required to make such a showing to prevail on her wrongful-discharge claim under

Michigan law).

         As Eagle correctly notes, however, the Kentucky Court of Appeals has explicitly held

that “an employee claiming wrongful discharge due to a refusal to violate the law must show an

affirmative request to him/her by the employer to violate the law.” Welsh v. Phoenix Transp.

Servs., No. 2007-CA-001231-MR, 2009 Ky. App. LEXIS 137, at *13 (Ky. Ct. App. Aug. 14,

2009). Several district courts, relying on Welsh, have held the same. See, e.g., Charles v. Print

Fulfillment Servs., LLC, No. 3:11-CV-00553-TBR, 2015 WL 5786817, at *7 (W.D. Ky. Sept. 30,

2015); Burnett v. Pinelake Reg’l Hosp., LLC, No. 5:09-cv-00024, 2010 WL 231741, at *2–3

(W.D. Ky. Jan. 14, 2010). And this court has suggested that such a request is necessary to

invoke the exception. See Burton v. Zwicker & Assoc., PSC, 577 F. App’x 555, 560 (6th Cir.

2014) (noting that, in order to invoke the public-policy exception, “an employer must only

request that the employee break the law”). But the Kentucky Supreme Court ordered Welsh not

to be published when it denied discretionary review. Welsh v. Phoenix Transp. Servs., LLC, No.

2007-CA-001231-MR, 2009 WL 2475206 (Ky. Ct. App. Aug. 14, 2009). Accordingly, although

this court may rely on Welsh as persuasive authority in deciding whether an affirmative request

to violate the law is required under this exception, see Ziegler, 249 F.3d at 517; Ky. R. Civ. P.

76.28(4)(c), there may be “persuasive data” that the Kentucky Supreme Court would not require

such a request, Ziegler, 249 F.3d at 517.3

         3
            The only court to find a plausible claim for wrongful discharge under Kentucky law without an
affirmative request to violate the law is Miller v. Reminger Co., L.P.A., No. 3:11-cv-315-CRS, 2012 WL 2050239
(W.D. Ky. June 6, 2012). In Miller, the court found that a discharged attorney had pled allegations sufficient to
support a wrongful-discharge claim under Kentucky law where, despite never being asked to participate, he refused
to acquiesce in a law firm’s illegal billing practice and was fired as a result. Id. at *7. But Miller is an unpublished
district court decision that neither binds this court nor provides insight into how the Kentucky Supreme Court would
decide the issue. And, given the sparseness of its reasoning, it provides little aid in discerning the contours of this
exception. Id. Thus, its relevance here is limited, at best.

                                                           7
No. 16-6604, Alexander v. Eagle Mfg. Co.

       Presumably, the policy behind this exception is to prevent an employee from having to

choose between losing his job and breaking the law. That policy is implicated, of course, when

an employer affirmatively requests that the employee violate the law. See, e.g., Hill, 327 S.W.3d

at 422–23. But it is also implicated when an employee learns of illegal activity and, although not

directly invited to participate by his employer, knows he will inevitably become complicit in the

illegality by performing his normal work responsibilities. We think it likely that the Kentucky

Supreme Court would apply this exception to not only the former situation, but also the latter.

Unfortunately for Alexander, his situation fits into neither.

       If Alexander had knowledge that the “E-2” engine blocks were defective but nonetheless

signed off on them, it is plausible that he would be complicit in a violation of KRS § 517.050

(falsifying business records) and KRS § 514.040 (theft by deception).           The problem for

Alexander, however, is that it is not apparent from his complaint that he would have inevitably

been forced to participate or become complicit in any illegal activity. For one, he does not allege

that he was the only Eagle employee tasked with signing off on the engine blocks. In fact, the

first-shift supervisor told Alexander he would sign the necessary paperwork for the allegedly

defective “E-2” engine blocks. We cannot assume, therefore, that had Alexander not spoken up,

he would have necessarily become a forced participant in the allegedly unlawful activity he

witnessed. Moreover, the complaint does not plausibly suggest that the activity Alexander

observed was anything more than an isolated incident. Thus, even if Alexander were the sole

employee tasked with signing off on the engine blocks, it would be unreasonable to infer that by

signing the requisite paperwork in the future, he would necessarily be participating in unlawful

activity. And, finally, even if Eagle’s erasure of the “E-2” codes was systematic, any future act

of signing off on these defective engine blocks would not have made Alexander automatically

                                                  8
No. 16-6604, Alexander v. Eagle Mfg. Co.

complicit in this illegal activity. Because both KRS § 517.050 and § 514.040 require criminal

intent, any unwitting authorization of a defective engine block in the future would not have

created criminal liability for Alexander.    In short, although his coworkers may have been

engaging in illegal activity, Alexander, himself, was never affirmatively asked to violate the law,

nor did his position make it inevitable that he would be forced to do so. Thus, regardless of the

precise contours of this exception, it is simply not broad enough to encompass Alexander’s

claim.

         We recognize that this result, if his allegations are accepted, creates an inequity for

Alexander. And, certainly, we do not condone Eagle’s alleged conduct. In most states, an

employee in Alexander’s situation would be protected from termination.            This protection

generally comes in the form of a whistleblower statute, which encourages employees who

uncover unlawful activity in the workplace to report such activity, without fear of reprisal. See,

e.g., Tenn. Code. Ann. § 50-1-304(b). Although Kentucky has a whistleblower statute covering

public employees, see KRS § 61.102, the Kentucky legislature, whatever its motives, has not

extended this protection to private employees, see Beach v. ResCare, Inc., No. 2004-CA-002559-

MR, 2005 WL 2174404, at *3 (Ky. Ct. App. Sept. 9, 2005). Instead, private employees, like

Alexander, are left with Kentucky’s default rule, which allows them to be fired “for good cause,

for no cause, or for a cause that some might view as morally indefensible.”             Firestone,
666 S.W.2d at 731. The Kentucky Supreme Court has, of course, crafted two exceptions to this

general rule, but those exceptions are “narrow[].” Grzyb, 700 S.W.2d at 400. And, importantly,

those exceptions do not include the internal reporting of unlawful activity within a company by a

private employee. In essence, then, Alexander asks us to create a third exception to Kentucky’s

employment-at-will doctrine. But, because neither the Kentucky legislature nor the Kentucky

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No. 16-6604, Alexander v. Eagle Mfg. Co.

courts have seen fit to do so, our hands are tied. We therefore affirm the district court’s

dismissal of Alexander’s wrongful-discharge claim.

                                                         III.

         The district court also denied Alexander further leave to amend his complaint, concluding

that the amendment was futile because Alexander failed to provide details regarding his

proposed amendment. When a district court bases its denial of leave to amend on futility

grounds, we review that decision de novo. Miller v. Champion Enters., Inc., 346 F.3d 660, 671

(6th Cir. 2003) (citing Ziegler, 249 F.3d at 518).

         Federal Rule of Civil Procedure 15(a)(2) provides that the district court “should freely

give leave [to amend a complaint] when justice so requires.” Although Rule 15(a)(2) evinces a

liberal amendment policy, “the right to amend is not absolute or automatic.”                             Tucker v.

Middleburg-Legacy Place, 539 F.3d 545, 551 (6th Cir. 2008) (citation omitted). Pertinent

factors in deciding whether to grant leave to amend include “undue delay in filing, lack of notice

to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by

previous amendment, undue prejudice to the opposing party, and futility of the amendment.”

Seals v. Gen. Motors Corp., 546 F.3d 766, 770 (6th Cir. 2008) (citation omitted).

         Because Alexander failed to follow the proper procedure for seeking leave to amend, the

district court did not err in denying Alexander’s request for leave to amend his complaint.4 In his

memorandum in opposition to Eagle’s motion to dismiss, Alexander stated, “Should the Court

find merit to any of the defendant’s arguments, the appropriate course of action . . . would be to

grant Alexander leave to file a second amended complaint, rather than dismissing his complaint

         4
           Although the district court rested its denial on futility grounds, the proper basis for denying Alexander’s
request was, more appropriately, lack of notice to Eagle. See Shillman v. United States, 221 F.3d 1336, 2000 WL
923761, at *6 (6th Cir. 2000) (unpublished table decision). Nevertheless, we can “affirm for any reason presented in
the record.” Loftis v. United Parcel Serv., Inc., 342 F.3d 509, 514 (6th Cir. 2003) (citation omitted).

                                                         10
No. 16-6604, Alexander v. Eagle Mfg. Co.

altogether.” DE 15, Page ID 120–21. But Alexander did not identify what amendments he

would make to his complaint, nor did he attach a copy of the amended complaint to his brief.

See Kuyat v. BioMimetic Therapeutics, Inc., 747 F.3d 435, 444 (6th Cir. 2014) (“Normally, a

party seeking an amendment should attach a copy of the amended complaint.”). As we have

previously recognized, “[a] request for leave to amend[,] ‘almost as an aside, to the district court

in a memorandum in opposition to the defendant’s motion to dismiss is . . . not a motion to

amend.’” La. Sch.Emps.’ Ret. Sys. v. Ernst & Young, LLP, 622 F.3d 471, 486 (6th Cir. 2010)

(quoting Begala v. PNC Bank, Ohio, Nat’l Ass’n, 214 F.3d 776, 784 (6th Cir. 2000)) (omission

in original). If Alexander wanted an opportunity to amend his complaint further, it was his

responsibility to provide details concerning the proposed amendments. Absent such a showing,

Alexander was not entitled to an advisory opinion from the district court informing him of the

deficiencies in his complaint and allowing him an opportunity to cure those deficiencies. Id.

Accordingly, the district court did not err in denying Alexander’s request for leave to amend.

                                                IV.

       For the foregoing reasons, we affirm both the district court’s dismissal of Alexander’s

wrongful-discharge claim and its order denying him leave to amend his complaint.

                                                11
No. 16-6604, Alexander v. Eagle Mfg. Co.

       ROGERS, Circuit Judge, dissenting. The majority very properly concludes that, when an

employee’s course of business makes it inevitable that he will violate the law in furtherance of

his duties, and he proactively refuses to do so, his refusal implicates the core concern of

Kentucky’s refusal-to-violate theory of wrongful discharge—preventing employees from being

harmed by the choice between following the law and being out of work. However, I disagree

that Alexander’s complaint does not state a plausible claim under this theory of wrongful

discharge.

       It is reasonable to infer from Alexander’s amended complaint that continuing along his

regular course of employment would have required him to illegally sign off on defective engine

blocks, thus presenting Alexander with an ultimatum—refuse or be fired. Alexander alleged that

his main task at work was to ensure no defective engine blocks were shipped to Eagle’s

manufacturer customers. By alleging that first-shift employees were attempting “to get him to

unwittingly sign off on the shipment” of defective blocks, Alexander implies that, had he

conducted business as usual, he would have been faced with inspecting the very engine blocks

that the first-shift employees tampered with. Furthermore, reading the complaint in the light

most favorable to Alexander, it is reasonable to infer that the first-shift employees’ behavior was

likely not an isolated incident. Thus, had Alexander continued signing off on Ford engine blocks

that were not marked with “E-2” as non-defective blocks, knowing that employees were masking

defective blocks before the blocks reached his station, he would have been aiding an illegal

scheme.      Finally, a reasonable jury could take Alexander’s asking the first-shift shipping

coordinator, “who was going to put their name on the documents, signing off on the shipment of

these defective engine blocks, and misrepresenting the defective engine blocks as good engine

                                                12
No. 16-6604, Alexander v. Eagle Mfg. Co.

blocks,” as a proactive refusal to comply—a refusal to violate the law that is protected from

retaliation.

        Thus, Alexander’s amended complaint alleges a plausible claim for wrongful termination

in violation of public policy under Kentucky law. I would therefore reverse the district court’s

judgment granting Eagle’s motion to dismiss.

                                               13