Court Opinion

ID: 2950958
Source: CourtListenerOpinion
Date Created: 2015-09-16 15:08:22.065442+00
Date Added: 2024-06-11T13:08:26.447436
License: Public Domain

[Cite as McGowan v. Medpace, Inc., 2015-Ohio-3743.]

                          IN THE COURT OF APPEALS
                 FIRST APPELLATE DISTRICT OF OHIO
                           HAMILTON COUNTY, OHIO

MARY MCGOWAN, M.D.,                             :         APPEAL NOS. C-140634
                                                                       C-140652
        Plaintiff-Appellee/Cross-               :         TRIAL NO. A-1108336
        Appellant,
                                                :              O P I N I O N.
  vs.
                                                :
MEDPACE, INC.,
                                                :
        Defendant-Appellant/Cross-
        Appellee.                               :

Civil Appeals From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Reversed and Cause Remanded

Date of Judgment Entry on Appeal: September 16, 2015

Freking & Betz, LLC, Randolph Freking and Brian P. Gillan, for Plaintiff-
Appellee/Cross-Appellant Mary McGowan, M.D.,

Thompson Hine LLP, Deborah S. Brenneman and George B. Musekamp, for
Defendant-Appellant/Cross-Appellee Medpace, Inc.,

The Gittes Law Group, Frederick M. Gittes and Jeffrey P. Vardaro, for Amicus
Curiae the Ohio Employment Lawyers Association.

Please note: this case has been removed from the accelerated calendar.
                      OHIO FIRST DISTRICT COURT OF APPEALS

FISCHER, Judge.

       {¶1}     Defendant-appellant/cross-appellee Medpace, Inc., and plaintiff-

appellee/cross-appellant Mary McGowan, M.D., have appealed from the trial court’s

order entering final judgment in favor of McGowan on her claim against Medpace for

wrongful discharge in violation of public policy. Because McGowan failed to identify

a clear public policy in support of her wrongful-discharge claim, we hold that the trial

court erred by failing to grant a directed verdict to Medpace.

                             Background and Procedure

       {¶2}    Medpace is a research facility that designs and conducts clinical trials

to test new pharmaceuticals. In the spring of 2011, Medpace hired McGowan as an

at-will employee to take over duties from one of its retiring physicians, Dr. Evan

Stein. McGowan was hired as the executive director of both Medpace’s Clinical

Pharmacology Unit (“CPU”) and its Metabolic and Atherosclerosis Research Center

(“MARC”).     The CPU conducted phase one studies to observe participants’ first

exposure to a drug. The MARC conducted later-stage studies on various drugs. The

sponsor of each drug study in the MARC selected a principal investigator to run the

study. McGowan was responsible for recruiting new studies to the MARC, and she

was additionally appointed by Stein to replace him as the principal investigator on

studies that he had previously recruited. McGowan had additionally agreed to take

over control of Stein’s private practice, the Cholesterol Treatment Center (“CTC”).

The CTC was not affiliated with Medpace and was solely owned by Stein, although it

was located on Medpace’s premises. Most participants in the MARC studies were

patients at the CTC, and the two entities shared employees.

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                       OHIO FIRST DISTRICT COURT OF APPEALS

       {¶3}      Shortly after taking over the CTC, McGowan observed several practices

in the facility that troubled her. Stein had prescribed patients a larger dose of

medication than was medically necessary, and had then directed the patients to split

the prescribed pills. McGowan felt that this practice of pill splitting constituted

insurance fraud and compromised patient safety because the written prescription

provided to the pharmacy did not match the instructions in a patient’s chart.

McGowan was further troubled by Stein’s practice of combining into one chart the

medical records of CTC patients who were enrolled in a MARC study. In her opinion,

personal information necessary to the CTC chart was irrelevant to treatment in the

MARC and should not be contained in the MARC files.              Last, McGowan was

concerned with the MARC’s practice of leaving patient charts open on carts outside

of treatment rooms. She felt that these two practices were in violation of the Health

Insurance Portability and Accountability Act (“HIPAA”).

       {¶4}      McGowan contacted a health-care attorney regarding her concerns

about Stein’s pill-splitting and prescription-writing practices.      After receiving

confirmation from this attorney that her concerns were legitimate, McGowan called a

staff meeting on July 22, 2011. At this meeting, she instructed the staff that they had

to change the way that prescriptions were written and the way that charts were

handled.      McGowan stated that Stein’s prescription-writing practices had been

fraudulent.      After learning of this meeting and McGowan’s accusations, Stein

removed McGowan from all activity in both the MARC and CTC via an email sent on

July 25, 2011.

       {¶5}       On July 27, 2011, McGowan met with August Troendle, Medpace’s

president and CEO, and Tiffany Khodadad, Medpace’s executive director of human

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                     OHIO FIRST DISTRICT COURT OF APPEALS

resources.    During this meeting, McGowan raised her concerns about Stein’s

prescription-writing practices and the HIPAA violations that she felt she had

observed. Troendle told McGowan that it was inappropriate for her to have accused

Stein of fraud in front of the staff. He stated that her concerns would be investigated,

and he encouraged her to investigate them as well. According to Troendle, McGowan

was adamant that Stein had committed fraud and that she had the right to air her

concerns to whomever she wished. Troendle clarified to McGowan that she was still

the executive director of the MARC, but that he could not control whether Stein

retained control of the CTC or the studies at MARC that he had previously recruited.

Neither McGowan’s title nor salary changed after Stein took back control of the CTC

and his MARC studies.

       {¶6}   On July 28, 2011, McGowan sent an email to Khodadad, Troendle, and

Kay Nolan, Medpace’s general counsel. In the email, McGowan stated that she felt

she was being retaliated against for expressing her concerns about improper

practices at the CTC. She stated that Troendle had informed her that she would not

be restored to director of either the CTC or MARC until she apologized to Stein, and

that Troendle had referred to Stein as an “asshole” and an “egomaniac.” Troendle

responded to this email, denying that he had referred to Stein in such a manner and

clarifying that McGowan remained head of the CPU, but that he had no authority to

remove Stein as the principal investigator on Steins’ MARC studies.

       {¶7}   Following this meeting and email exchange, McGowan continued her

duties as director of the CPU. But she felt that she could be fired from Medpace at

any point, and she retained an attorney. On August 17, 2011, McGowan attended a

standard Medpace staff meeting. At Troendle’s request, she stayed after the meeting

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                      OHIO FIRST DISTRICT COURT OF APPEALS

to speak with him. Troendle acknowledged that McGowan had hired an attorney to

negotiate her departure from Medpace, but expressed his desire for her to continue

her employment. McGowan told Troendle that she was disappointed that he had lied

about calling Stein an asshole. Troendle again told McGowan that it had been

inappropriate to accuse Stein of fraud in front of the staff. McGowan stated that

Troendle could not stop her from speaking the truth and she accused Troendle of

trying to intimidate her.

       {¶8}   After that meeting, Troendle determined that he had to terminate

McGowan’s employment with Medpace. On August 18, 2011, two representatives

from Medpace’s department of human resources informed McGowan that she had

been fired.

       {¶9}   On October 19, 2011, McGowan sued Medpace for wrongful discharge

in violation of public policy, sex discrimination, intentional infliction of emotional

distress, and promissory estoppel. The case proceeded to a jury trial. At the close of

McGowan’s case, Medpace moved for a directed verdict. As relevant to this appeal,

Medpace argued in its motion that McGowan’s claim for wrongful discharge in

violation of public policy failed as a matter of law, because she had failed to establish

the first two elements of that claim. The trial court denied Medpace’s request, both

when initially made and when it was renewed at the close of all evidence. The jury

found in favor of Medpace on McGowan’s claims for sex discrimination, intentional

infliction of emotional distress, and promissory estoppel. But it found in favor of

McGowan on her claim for wrongful discharge in violation of public policy. It

awarded her $300,000 in compensatory damages, $500,000 in punitive damages,

and attorney fees.

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                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶10} After the trial court entered final judgment on that claim in favor of

McGowan, Medpace filed a motion for judgment notwithstanding the verdict, and

alternatively for a new trial. McGowan also filed a similarly titled motion, arguing

that the jury had erred in its calculation of damages. The trial court denied both

motions.

       {¶11} Medpace has appealed the trial court’s judgment.               In three

assignments of error, Medpace argues that the trial court erred in failing to dismiss

McGowan’s claim for wrongful discharge in violation of public policy, by providing

the jury with improper and incomplete jury instructions, and by awarding McGowan

all requested attorney fees. McGowan has also appealed the trial court’s judgment.

In one assignment of error, she challenges the jury’s calculation of her damages.

                  Wrongful Discharge in Violation of Public Policy

       {¶12} Medpace argues in its first assignment of error that the trial court’s

failure to dismiss McGowan’s claim for wrongful discharge in violation of public

policy was in error. Medpace contends that the trial court should have granted either

its motion for a directed verdict or motion for judgment notwithstanding the verdict

with respect to this claim.

       {¶13} We review a trial court’s ruling on a motion for a directed verdict de

novo. See Bennett v. Admr., Ohio Bur. of Workers’ Comp., 134 Ohio St. 3d 329,

2012-Ohio-5639, 982 N.E.2d 666, ¶ 14. A directed verdict should be granted when

the trial court “after construing the evidence most strongly in favor of the party

against whom the motion is directed, finds that upon any determinative issue

reasonable minds could come to but one conclusion * * * and that conclusion is

adverse to such party.” Civ.R. 50(A)(4).

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶14} Medpace had employed McGowan as an at-will employee. Under the

common law employment-at-will doctrine, the employment relationship between an

employer and an at-will employee may be terminated by either party for any reason,

and the termination of such an employee generally does not give rise to an action for

damages. See Collins v. Rizanka, 73 Ohio St. 3d 65, 67, 652 N.E.2d 653 (1995); see

also Dohme v. Eurand America, Inc., 130 Ohio St. 3d 168, 2011-Ohio-4609, 956
N.E.2d 825, ¶ 11.

       {¶15} But in Greeley v. Miami Valley Maintenance Contrs., Inc., 49 Ohio

St.3d 228, 551 N.E.2d 981 (1990), the Ohio Supreme Court recognized an exception

to this employment-at-will doctrine. The Greeley court held that an at-will employee

may maintain a cause of action for wrongful discharge when the employee is

terminated in violation of a clearly expressed public policy. Greeley at 234. To

establish a claim for wrongful discharge in violation of public policy, an employee

must demonstrate that a clear public policy existed (the clarity element); that the

employee’s dismissal jeopardized the public policy (the jeopardy element); that the

employee’s dismissal was motivated by conduct related to the public policy (the

causation element); and that the employer did not have an overriding business

justification to support dismissal of the employee (the overriding justification

element). See Collins, at 69-70. The clarity and jeopardy elements present questions

of law, while the causation and overriding-justification elements present questions of

fact. Id.

       {¶16} McGowan contended that she had been wrongfully discharged for

reporting her concerns about Stein’s prescription-writing practices, which she

alleged constituted insurance fraud and compromised patient safety. She argued

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                     OHIO FIRST DISTRICT COURT OF APPEALS

that her firing on these grounds violated the public policy established in R.C.

2913.47, which prohibits insurance fraud. She further contended that she had been

wrongfully discharged in violation of the public policy established in HIPAA for

reporting her complaints about Stein’s practices of combining the charts of patients

in the MARC and CTC and of leaving patient charts open on carts.

       {¶17} Medpace argues that the trial court should have dismissed McGowan’s

wrongful-discharge claim because she had failed to establish the clarity element with

respect to both of her public policy arguments. Medpace specifically contends that

neither R.C. 2913.47 nor HIPAA complied with the precedent established by this

court in Hale v. Volunteers of Am., 158 Ohio App. 3d 415, 2004-Ohio-4508, 816
N.E.2d 259 (1st Dist.), and Dean v. Consol. Equities Realty #3, LLC, 182 Ohio

App.3d 725, 2009-Ohio-2480, 914 N.E.2d 1109 (1st Dist.).

       {¶18} In Hale, we considered whether two former employees of a residential

treatment center for convicted felons could maintain an action against their former

employer for wrongful discharge in violation of public policy based on a public policy

that was independent of Ohio’s whistleblower statute. Hale at ¶ 40. The employees

had contended that they were wrongfully discharged for reporting their concerns

about the operation of the rehabilitation center in violation of the public policy

established by various regulations in the Ohio Administrative Code. Id. at ¶ 37. We

determined that in the context of that claim, an “independent source of public policy

must parallel the public policy set forth in the whistleblower statute.” Id. at ¶ 45.

Because the administrative code provisions relied on by the employees did not

affirmatively require them to report their concerns, and did not prohibit the

rehabilitation center from terminating employees for reporting their concerns, and

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                      OHIO FIRST DISTRICT COURT OF APPEALS

because the employees had not alleged that they were terminated for reporting

workplace-safety violations, we held that they had failed to establish that their

employment was terminated in violation of a clear public policy independent of the

whistleblower statute. Id. at 46-47.

       {¶19} In Dean, a former employee of Colerain Ford had alleged that he had

been wrongfully terminated in violation of public policy for reporting his concerns

that the dealership’s business practices constituted fraud. He argued that Ohio had a

clear public policy against fraud, evidenced in R.C. 2921.13. Dean at ¶ 10. In

rejecting Dean’s argument, we emphasized that the public-policy exception to the at-

will employment doctrine should be narrowly applied. Id. at ¶ 12. We held that

Dean had failed to establish an independent source of public policy to support the

clarity element of his claim, because the statute that he had relied upon failed to

impose an affirmative duty on an employee to report a violation, failed to prohibit an

employer from retaliating against an employee who had filed complaints, and did not

protect the public’s health or safety. Id. at ¶ 11-12.

       {¶20} McGowan argues that the Ohio Supreme Court has never similarly

limited the type of public policy applicable to a wrongful-discharge-in-violation-of-

public-policy claim and has never held that such a claim must be based on a public

policy that either addresses the conduct of the employee or regulates the conduct of

the employer. She contends that a public policy is sufficient to satisfy the clarity

element when it is applicable to the employer and implicated in the employee’s

termination.

       {¶21} Other appellate districts have adopted McGowan’s position.           See

Alexander v. Cleveland Clinic Found., 8th Dist. Cuyahoga No. 95727, 2012-Ohio-

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                     OHIO FIRST DISTRICT COURT OF APPEALS

1737, ¶ 36 (“We find, however, no requirement that a supporting statute be

employment-related or otherwise set forth an employer’s responsibilities and/or an

employee’s rights.”). But several federal courts have reached the same conclusion as

this district and have cited Hale and Dean with approval. In Crowley v. St. Rita’s

Med. Ctr., 931 F. Supp. 2d 824 (N.D.Ohio 2013), the United States District Court for

the Northern District of Ohio held that

       This Court finds more persuasive the reasoning of the Ohio courts that

       require the public policy invoked in a Greeley claim to parallel the

       policies underlying the whistleblower statute or protect employee or

       public safety. The courts of Ohio generally have found that Greeley

       claims cannot lie with every public policy, even ‘good’ ones, and

       appropriately so. Without these limitations, Greeley claims could

       evolve from exceptions to the employment at-will doctrine to the rule

       itself.

Crowley at 831. See Gates v. Beau Townsend Ford, Inc., S.D.Ohio No. 3:08-cv-054,

2009 U.S. Dist. LEXIS 110005, * 27 (Nov. 24, 2009) (“[T]he clear public policy, if

separate from the whistleblower statute, must parallel the whistleblower statute or

be criminal in nature.”).

       {¶22} A claim for wrongful discharge in violation of public policy was created

as an exception to the employment-at-will doctrine. As recognized by the Crowley

court, absent a narrow interpretation of the types of public policy applicable to these

claims, the exception becomes the rule. With the continued and ongoing explosion

in statutes, governmental regulations, and policies found under the Ohio Revised

Code and the Ohio Administrative Code, as well as federal laws and regulations, if

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                      OHIO FIRST DISTRICT COURT OF APPEALS

exceptions to the at-will-employment doctrine are not narrowly construed, the so-

called “exceptions” will speedily and overwhelmingly undermine and eliminate the

concept of at-will employment in this state. The employment-at-will doctrine is, as

conceded by all parties herein, the starting point for an employment-law analysis for

this type of claim. This doctrine has remained untouched by the legislature since its

inception, and is effectively one of Ohio’s most basic “public policies” on employment

issues. If this court were to disregard now longstanding case law like Hale and Dean,

this most important public policy would be destroyed. Such a change in basic Ohio

public policy should be left to the legislature, not this court.

       {¶23} Hale and Dean are the law of this district and we continue to adhere to

them. In a claim for wrongful discharge in violation of public policy, an employee

satisfies the clarity element by establishing that a clear public policy existed, and that

the public policy was one that imposed an affirmative duty on an employee to report

a violation, that prohibited an employer from retaliating against an employee who

had reported a violation, or that protected the public’s health and safety.

       {¶24} We now consider whether the public policies relied on by McGowan

meet these criteria. McGowan argued that she had been terminated for reporting her

concerns about Stein’s prescription-writing practices, namely pill splitting, in

violation of the public policy established in R.C. 2913.47. This insurance-fraud

statute provides in relevant part that

       No person, with purpose to defraud or knowing that the person is

       facilitating a fraud, shall do either of the following:

       (1) Present to, or cause to be presented to, an insurer any written or

       oral statement that is part of, or in support of, an application for

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       insurance, a claim for payment pursuant to a policy, or a claim for any

       other benefit pursuant to a policy, knowing that the statement, or any

       part of the statement, is false or deceptive;

       (2) Assist, aid, abet, solicit, procure, or conspire with another to

       prepare or make any written or oral statement that is intended to be

       presented to an insurer as part of, or in support of, an application for

       insurance, a claim for payment pursuant to a policy, or a claim for any

       other benefit pursuant to a policy, knowing that the statement, or any

       part of the statement, is false or deceptive.

R.C. 2913.47(B).

       {¶25} While this statute arguably establishes a valid public policy against

insurance fraud, it cannot serve as the basis for an exception to the employment-at-

will doctrine. See Dean, 182 Ohio App. 3d 725, 2009-Ohio-2480, 914 N.E.2d 1109, at

¶ 12. This statute does not place an affirmative duty on an employee to report a

violation, prohibit an employer from retaliating against an employee who has

reported a violation, or protect the public’s health and safety. Consequently, it will

not support McGowan’s wrongful-discharge claim.

       {¶26} We reach the same conclusion with respect to McGowan’s argument

that her termination was in violation of the public policy established in HIPAA. In

Wallace v. Mantych Metal-Working, 189 Ohio App. 3d 25, 2010-Ohio-3765, 937
N.E.2d 177 (2d Dist.), the Second Appellate District recognized HIPAA as a valid

source of public policy in a wrongful-discharge case. It held that HIPAA manifested

a public policy favoring the confidentiality and privacy of medical records. Wallace

at ¶ 41. As recognized by the Second District and explained by McGowan in both her

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                      OHIO FIRST DISTRICT COURT OF APPEALS

appellate brief and at oral argument, HIPAA was enacted to help protect patient-

privacy rights. HIPAA manifests an important and useful public policy, but the

protection of patient privacy is not the type of public policy contemplated by Hale

and Dean.

       {¶27} Because McGowan failed to establish that she was discharged in

violation of a clear public policy that imposed an affirmative duty on an employee to

report a violation, that prohibited an employer from retaliating against an employee

who had reported a violation, or that protected the public’s health and safety, she has

failed to satisfy the clarity element of her wrongful-discharge claim. Consequently,

reasonable minds could only reach one conclusion on the evidence submitted—that

McGowan could not succeed on her claim for wrongful discharge in violation of

public policy. We hold that the trial court erred by failing to grant Medpace a

directed verdict on this claim.

       {¶28} Medpace’s first assignment of error is sustained. Our resolution of this

assignment of error renders Medpace’s remaining assignments of error and the

assignment of error raised in McGowan’s cross-appeal moot.

                                     Conclusion

       {¶29} The trial court erred by failing to grant a directed verdict to Medpace

on McGowan’s claim for wrongful discharge in violation of public policy. We reverse

the trial court’s judgment in favor of McGowan, and remand this cause with

instructions for the trial court to enter judgment in favor of Medpace on this claim.

                                             Judgment reversed and cause remanded.

DEWINE, J., concurs.
HENDON, P.J., dissents.

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                      OHIO FIRST DISTRICT COURT OF APPEALS

HENDON, P.J., dissenting.

       {¶30} I agree with the majority’s determination that Hale and Dean are the

law of this court, and that a public policy will not satisfy the clarity element of a claim

for wrongful discharge in violation of public policy unless it comports with one of the

requirements outlined in these cases. But I believe that McGowan has sufficiently

established that she was discharged in violation of a public policy that met one of

these requirements: HIPAA.

       {¶31} The majority recognizes that HIPAA manifests a public policy in favor

of protecting patient-privacy rights.      The disclosure of a patient’s confidential

medical information can have a far-reaching effect, and, and in my opinion, patient-

privacy rights directly implicate the public’s health and safety. For this reason, I

would conclude that McGowan satisfied the clarity element of her claim for wrongful

discharge in violation of public policy and that the trial court did not err in failing to

grant a directed verdict in favor of Medpace on her claim.

Please note:
       The court has recorded its own entry on the date of the release of this opinion.

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