Court Opinion

ID: 2821936
Source: CourtListenerOpinion
Date Created: 2015-07-30 14:04:08.511519+00
Date Added: 2024-06-11T11:31:03.913018
License: Public Domain

Notice: This opinion is subject to formal revision before publication in the
Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the
Court of any formal errors so that corrections may be made before the bound
volumes go to press.

             DISTRICT OF COLUMBIA COURT OF APPEALS

            Nos. 08-CV-629, 08-CV-630, 08-CV-631 and 08-CV-632

               MICHAEL R. ROSELLA, APPELLANT/CROSS-APPELLEE,

                                         v.

               LONG RAP, INC., et al., APPELLEES/CROSS-APPELLANTS.

                           Appeals from the Superior Court
                             of the District of Columbia
                          (CAB-4316-06 and CAB-5758-06)

                    (Hon. Jeanette Jackson Clark, Trial Judge)

(Argued October 24, 2014                                     Decided July 30, 2015)

      Lynne Bernabei, with whom Alan R. Kabat was on the brief, for
appellant/cross-appellee.

      Dale A. Cooter for appellees/cross-appellants.

      Jason M. Zuckerman, with whom R. Scott Oswald filed a brief, for the
Government Accountability Project, the Metropolitan Washington Employment
Lawyers Association, and the National Whistleblowers Center, as amicus curiae in
support of appellant/cross-appellee.

      Before FISHER and THOMPSON, Associate Judges, and PRYOR, Senior Judge.

      PRYOR,     Senior    Judge:     Appellant/cross-appellee   Michael    Rosella

(“appellant”) filed an action in Superior Court alleging he was wrongfully

discharged from his employment with Long Rap, Inc. (“Long Rap”), in retaliation
                                         2

for his ongoing protests of Long Rap’s accounting practices. He alleged that his

supervisors feared that his expressed disapproval of Long Rap’s accounting

systems would negatively affect a planned business acquisition of the company,

and that his employment was terminated in order to ensure a successful transaction.

Although the trial court permitted appellant’s wrongful discharge claim to proceed

to trial, the jury entered a verdict in favor of Long Rap and its named officers. On

appeal, appellant alleges multiple errors by the trial court and seeks a new trial.

Concluding instead that appellant never stated a proper claim for wrongful

termination in the first instance, we affirm the adverse judgment against him.

                                         I.

      Long Rap was, at the time these proceedings were initiated, a privately

owned corporation that operated a chain of clothing stores. It was operated by its

three co-owners and officers, Charles Rendelman, Stuart Ezrailson, and Mitchell

Kupchak.1 Mr. Rendelman acted as Long Rap’s Chief Executive Officer, and

Mr. Ezrailson acted as Long Rap’s President and Chief Merchandiser.              Mr.

Kupchak was not involved in day-to-day operating decisions within the company.
      1
         Along with the three men named above, Long Rap acted through two
additional officers: Wendy Sayer Ezrailson, Mr. Ezrailson’s wife and Long Rap’s
Corporate Secretary, and Paul Donnellan, Vice President of Operations.
                                         3

      Long Rap hired appellant on a temporary basis in May 2005. In July 2005,

appellant became a full-time at-will employee and began to serve as Long Rap’s

Director of Finance and Controller, a position similar to a Chief Financial Officer.

Soon after this promotion, the relationship between Long Rap’s officers and

appellant began to deteriorate.    Long Rap alleges its officers began to have

concerns about appellant’s work performance, including the timeliness of financial

reporting, poor work ethic, and declining morale in the accounting department.

      On the other hand, appellant alleges that after his promotion he began to

question and object to a number of directives issued to him by Long Rap officers.

Appellant’s complaint detailed that he was directed to, inter alia, postdate checks

in order to manipulate quarterly financial results, record transactions in different

accounting periods than when they occurred, provide sizable cash advances and

travel advances to the Rendelmans and Ezrailsons (without documentation), pay

for the use of a private automobile for the owners out of corporate funds, and

otherwise use corporate funds to pay the owners’ personal expenses. Appellant’s

complaint alleges that he protested multiple “improprieties [and] illegalities”

regarding Long Rap’s accounting practices on the basis that they were contrary to

generally accepted accounting principles. However, when appellant’s protests did

not cause any change in the practices, appellant largely complied with the officers’
                                        4

orders. In a few instances appellant simply did not comply with the directives, or

complied in a different manner.

      Ultimately, in April 2006, the differences between the parties resulted in

Long Rap terminating appellant’s employment.        On May 2, 2006, appellant

delivered a demand letter to Long Rap indicating that he believed he had been

wrongfully terminated from his position. Appellant asserted that he was fired

because ongoing negotiations to sell Long Rap would require the potential

purchaser, Blue Holdings, Inc. (“Blue Holdings”), to perform a check of Long

Rap’s finances. This check, appellant claims, would have involved consulting with

him. Since appellant had multiple concerns about the propriety and legality of a

number of Long Rap’s financial matters, his consultation would have put the sale

in jeopardy.2

      On June 2, 2006, Long Rap responded to appellant’s demand letter by filing

suit against him, alleging negligence and breach of fiduciary duty. Appellant

cross-filed a claim alleging wrongful termination in violation of public policy

against Long Rap, and conspiracy claims against Mr. Rendelman and

Mr. Ezrailson. The parties’ cross-claims were consolidated and proceeded to a
      2
          The sale did not occur.
                                           5

jury trial. After the trial, the jury returned verdicts in appellant’s favor on Long

Rap’s breach of fiduciary duty claim and in Long Rap and its officers’ favor on

appellant’s wrongful termination claim. Appellant appealed from the verdict on

his claims. Long Rap did not appeal the verdict on its breach of fiduciary duty

claim, but cross-appealed the trial court’s adverse summary judgment ruling

dismissing its negligence claim.

      After the cross-appeals were filed and briefed, Long Rap filed for

bankruptcy.     This appeal was stayed for approximately five years pending

resolution of the bankruptcy proceedings. During those proceedings, Long Rap

waived its appeal from the trial court’s adverse summary judgment ruling

dismissing its negligence claim.

      Accordingly, the only question before this court is appellant’s claim of

wrongful discharge from employment by Long Rap. As part of that claim, he

asserts that the trial court erred when it (i) instructed the jury that it must find that

the conduct appellant complained of was actually illegal (ii) precluded certain

expert or lay testimony regarding the legality of Long Rap’s actions and (iii)

admitted appellant’s initial demand letter and suggested settlement sum into

evidence.
                                          6

                                         II.

      It has long been the common law in this jurisdiction that an at-will employee

may be discharged “at any time and for any reason, or for no reason at all.” Adams

v. George W. Cochran & Co., 597 A.2d 28, 30 (D.C. 1991). We first recognized a

non-statutory exception to this doctrine in Adams, concluding that it has become

“universally accepted that an employer’s discharge of an employee for the

employee’s refusal to violate a statute is a wrongful discharge in violation of public

policy.”   Id. at 32.   In that case, we reversed the court’s grant of summary

judgment on Mr. Adams’ claim for wrongful termination, which alleged that he

was discharged from his employment as a delivery truck driver after he refused to

drive a truck without a visible inspection sticker on its windshield as required by

District law. Guided by two decisions from the Supreme Court of Texas, we

determined that a would-be plaintiff could properly invoke the cause of action

where his employer “require[d] his or her employees to break the law as a

condition of continued employment,” id. at 32, and the plaintiff-employee was

discharged solely because he refused to do so. Id. at 33-34. Nonetheless, we

emphasized that this new exception to at-will employment was “very narrow.” Id.

at 33. Accordingly, we declined — like the Supreme Court of Texas — to “extend

the exception to cover a claim by an employee that he was discharged for reporting
                                          7

illegal activities by other employees to his employer.” Id. at 34. In that situation,

the plaintiff “was not forced to choose between risking criminal liability [and]

being discharged from his livelihood,” and thus was subject to discharge at the

employer’s discretion. Id. (quoting Winters v. Houston Chronicle Publ’g Co., 795
S.W.2d 723, 724 (Tex. 1990)).

      Although we have maintained that the wrongful termination in violation of

public policy exception to at-will employment remains “narrow,” we later

concluded that Adams does not foreclose recognition of additional public policy

grounds upon which an employee can claim wrongful termination.                Carl v.

Children’s Hosp., 702 A.2d 159, 160 (D.C. 1997) (en banc). In that case, Ms. Carl

asserted that she was discharged from her employment as a nurse with Children’s

Hospital after she advocated on behalf of patients’ rights groups before the D.C.

Council and testified on behalf of plaintiffs in medical malpractice claims. Id. She

alleged that her termination violated, inter alia, her rights as a citizen to engage in

political expression. Id. We held that Ms. Carl’s wrongful termination claim

could go forward even though, unlike Mr. Adams, she was not forced to partake in

an illegal act or risk termination. Id. at 161. However, to maintain the “narrow”

exception that Adams envisioned, we concluded that the
                                          8

             court should consider seriously only those arguments that
             reflect a clear mandate of public policy — i.e., those that
             make a clear showing, based on some identifiable policy
             that has been officially declared in a statute or municipal
             regulation, or in the Constitution, that a new exception is
             needed. Furthermore, there must be a close fit between
             the policy thus declared and the conduct at issue in the
             allegedly wrongful termination.

Id. at 163 (Terry, J., concurring).3 By tying new causes of action to statutory and

constitutional provisions, we would refrain from defining “nebulous” concepts of

public policy, and leave such definitions to the legislature, “which is in a far better

position than a court to make policy decisions on behalf of the citizenry.” Id.

Further, the statutory anchor would prevent us from evaluating actions where the

claimed public policy exception simply “tends to be injurious to the public or

against the public good.” Id. (quoting Boyle v. Vista Eyewear, Inc., 700 S.W.2d
859, 871 (Mo. Ct. App. 1985)).

      Applying this new exception to the policies alleged by Ms. Carl, we

      3
        Judge Terry’s concurring opinion was joined by a majority of the court in
the standard by which we should evaluate future public policy-grounded
exceptions to at-will employment and with regard to the public policy embodied by
D.C. Code § 1-204, and accordingly it constitutes the effective holding of the en
banc court. Id. at 166, 197 n.2.
                                           9

concluded that D.C. Code § 1-224 (1981 ed.)4 — although a criminal statute —

embodied a policy protecting every citizen’s right to testify before the legislature

when it proscribed any endeavor to “influence, intimidate, or impede any witness

in any proceeding before the Council,” and prohibited “injuring any . . . witness in

[her] person or property . . . on account of [her] testifying or having testified to any

matter pending” before the Council.         Id. at 165.    The statute represents “a

declaration of policy by the Council seeking to ensure the availability of

information essential to its legislative function by imposing criminal penalties on

anyone who seeks to impede Council access to such information.”                Id.   An

employer who terminated the employment of an employee solely for testifying

before the Council could certainly “influence, intimidate, or impede” the

employee’s testimony, thereby limiting the Council’s access to relevant

information. Accordingly, Ms. Carl was permitted to demonstrate that her former

employer wrongfully terminated her employment in a manner that violated the

public policy set forth in D.C. Code § 1-224.

      We also allowed a suit for wrongful discharge to go forward in Washington

v. Guest Servs., Inc., 718 A.2d 1071 (D.C. 1998). Ms. Washington alleged that she

had been fired for insubordination because she tried to persuade a coworker to
      4
          This section has been recodified at D.C. Code § 1-301.43 (2012 Repl.).
                                        10

refrain from “spraying stainless steel cleaner in the area where Ms. Washington

was cooking.” Id. at 1072. We concluded that “[t]o permit an employee to be

fired for such actions would undermine the purposes of the food and health

regulations and would frustrate the public policy of which these regulations are an

expression.” Id. at 1080. We emphasized the close relationship “between Ms.

Washington’s discharge and the applicable public policy.” Id.

      As the court’s approach has evolved to define new common-law torts of

wrongful discharge from employment in violation of public policy, the legislature

has seen fit to simultaneously create statutory exceptions to the employment-at-

will rule by recognizing an employee’s right to challenge wrongful discharges

based on specific protections of public policy.     For example, the District of

Columbia Human Rights Act, D.C. Code § 2-1402.61 (2001), and Title VII of the

Civil Rights Act, 42 U.S.C. § 2000e-3 (a) (2006), prohibit the discharge of an

employee in retaliation for the employee’s engagement in protected activity. See

McFarland v. George Wash. Univ., 935 A.2d 337 (D.C. 2007); Bryant v. District

of Columbia., 102 A.3d 264 (D.C. 2014).        Those provisions serve to protect

employees from “discrimination for any reason other than that of individual merit,”

and employees who engage in protected activity to expose discrimination against

others.   D.C. Code §§ 2-1401.01, 2-1402.61; see also 42 U.S.C. § 2000e-2.
                                          11

Additionally, the Whistleblower Protection Act functions to protect D.C.-

government employees who make protected disclosures “report[ing] waste, fraud,

abuse of authority, violations of law, or threats to public health or safety” from

retaliatory employment actions.      D.C. Code §§ 1-615.5, 1-615.53.          Protected

disclosures include those “made in the ordinary course of an employee’s duties by

an employee to a supervisor . . . that the employee reasonably believes evidences

. . . [a] violation of a federal, state, or local law, rule, or regulation[.]” D.C. Code

§ 1-615.52.

                                          III.

      In this case appellant (and amicus) seek the inclusion of a “reasonable

belief” standard into our existing case law making it akin to a whistleblower

statute. Appellant’s theory of the case was twofold. He urged that he had a

reasonable belief that at least some of the employer’s accounting practices were

likely unlawful. Alternatively, he argued that the disclosure of his views would be

problematic to a prospective purchaser of the company and that that fact led to his

discharge.    In these circumstances we conclude that appellant’s showing of

protected activity under the requirements of Adams and Carl is deficient. There is

no showing that appellant, in this instance, was forced to choose between
                                        12

continuing his employment or engaging in behavior that was unlawful or against a

clear mandate of public policy.     Rather appellant requests that we alter our

requirement for a remedy for wrongful discharge of an at-will employee to a lesser

requirement that the employee have a reasonable belief that he or she is being

wrongfully discharged from such employment. This approach would undo the

balance that now exists under our case law and would be a departure from our

jurisprudence. See M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C. 1971). Although

appellant relies on Washington, we cannot discern the requisite close fit between

appellant’s discharge and the applicable public policy. Given our view of the case,

we do not address appellant’s other contentions concerning the manner in which

the trial was conducted.

       For the foregoing reasons, we affirm the adverse judgment against

appellant.

                                             So ordered.