Court Opinion

ID: 9792936
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:39:41.161245+00
Date Added: 2024-06-11T08:01:50.872372
License: Public Domain

Briscoe, C.J.,
concurring and dissenting: I concur in the majority’s reversal of the judgment in favor of Jon Moyer and dissent from the affirmance of the judgment in favor of Kay Moyer. I disagree with the majority’s conclusion that Kay is entitled to recover under the wrongful discharge theory she espouses. Kay has faded to carry her evidentiary burden in establishing that she is entitled to recover as a whistle-blower. If Kay’s claim fails, Jon’s claim must also fail. He contends that he is entitled to recover • because his termination was, in effect, further retaliation against Kay for her whistle-blowing. Therefore, although I concur in the reversal of the judgment in favor of Jon, I would reverse the judgment for a reason different from that set forth by the majority.
*214The acts of whistle-blowing which serve as a basis for the affirmance of this judgment are complaints made by Kay to her immediate employer, Allen Freight, about her employer’s failure to properly maintain equipment (see page 10 of majority opinion). In those jurisdictions where such internal reporting can serve as a basis for a wrongful discharge claim, these claims are referred to as “internal whistle-blowing.” Sheets v. Teddy’s Frosted Foods, Inc., 179 Conn. 471, 427 A.2d 385 (1980); Petrik v. Monarch Printing Corp., 111 Ill. App. 3d 502, 444 N.E. 2d 588 (1982). It is important to note that the majority does not rely upon conduct which would be defined as “external whistle-blowing” as a basis for affirmance of this judgment. The conduct which serves as a basis for Kay’s claim does not involve Kay’s “reporting of a serious infraction of such rules, regulations, or the law by a co-worker or an employer” to an outside entity. Palmer v. Brown, 242 Kan. 893, 900, 752 P.2d 685 (1988). The majority does not rely upon her mentioning of equipment failures to a DOT inspector after her truck was pulled over as the basis for her whistle-blower claim.
We are then in this case concerned with whether Kansas distinguishes between external whistle-blowing and internal whistle-blowing and, more specifically, whether Kansas recognizes internal whistle-blowing as a viable basis for a wrongful discharge claim. Kansas has long held that, in the absence of an express or implied contract between an employer and an employee regarding the duration of employment, either party is free to end the employment at any time for any reason. Johnston v. Farmers Alliance Mutual Ins. Co., 218 Kan. 543, 546, 545 P.2d 312 (1976). Although this employment-at-will doctrine had several exceptions, prior to the Kansas Supreme Court’s decision in Palmer, at-will employees discharged in Kansas for whistle-blowing had no cause of action. In Palmer, the court held the retaliatory discharge for whistle-blowing of an employee-at-will is an actionable tort.
Under the facts presented in Palmer, an experienced medical technician alleged she was fired by Associates in Family Care, P.A., (AFC) where she administered AFC’s in-house lab. She had information that at least one physician at AFC was billing Med*215icaid for lab work which had not been performed. Prior to her discharge, one of the physicians at AFC sought her assurance that she would keep AFC’s billing practices secret. When she refused to assure him she would not report the practices “to appropriate authorities,” he told her she could not be trusted and warned her if she said anything to anyone she would not be given permanent status with AFC. When she transmitted information to unspecified authorities which she said supported her suspicions of Medicaid fraud, she was fired. Her act of whistle-blowing which she alleged was the reason for her discharge was her reporting to “unspecified authorities” information which supported her suspicion of Medicaid fraud at AFC.
In determining whether she had stated a claim for retaliatory discharge, the court referenced decisions from foreign jurisdictions, all of which involved the discharge of employees for reporting illegal activity to outside authorities.
“Several jurisdictions have provided common-law ‘whistle-blower’ protection for employees discharged for reporting illegal activity. See, e.g., Vermillion v. AAA Pro Moving & Storage, 146 Ariz. 215, 704 P.2d 1360 (1985) (employee told customer of employer theft of customer’s property); Palmateer v. International Harvester Co., 85 Ill. 2d 124, 421 N.E.2d 876 (1981) (employee reported to police theft of screwdriver by co-employee); Kalman v. Grand Union Co., 183 N.J. Super. 153, 443 A.2d 728 (1982) (pharmacist reported to State Board of Pharmacy employer’s plan to violate state pharmacy rules); Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367 (9th Cir. 1984) (employee reported to California health officials shipment of adulterated milk); Shaw v. Russell Trucking Line, Inc., 542 F. Supp. 776 (W.D. Pa. 1982) (employee notified police that employer’s trucks were overloaded in violation of state law).” 242 Kan. at 900.
The court then held:
“Public policy requires that citizens in a democracy be protected from reprisals for performing their civil duty of reporting infractions of rules, regulations, or the law pertaining to public health, safety, and the general welfare. Thus, we have no hesitation in holding termination of an employee in retaliation for the good faith reporting of a serious infraction of such rules, regulations, or the law by a co-worker or an employer to either company management or law enforcement officials (whistle-blowing) is an actionable tort. To maintain such action, an employee has the burden of proving by clear and convincing evidence, under the facts of the case, a reasonably prudent person would have concluded the *216employee’s co-worker or employer was engaged in activities in violation of rules, regulations, or the law pertaining to public health, safety, and the general welfare; the employer had knowledge of the employee’s reporting of such violation prior to discharge of the employee; and the employee was discharged in retaliation for making the report. However, the whistle-blowing must have been done out of a good faith concern over the wrongful activity reported rather than from a corrupt motive such as malice, spite, jealousy or personal gain.” 242 Kan. at 900.
The majority in the present case relies upon the portion of the holding in Palmer which refers to “termination of an employee in retaliation for the good faith reporting of a serious infraction of such rules, regulations, or the law by a co-worker or an employer to either company management or law enforcement officials (whistle-blowing) is an actionable tort.”' (Emphasis added.) 242 Kan. at 900. This holding in Palmer which appears to permit an action based upon an employee’s reporting of infractions to company management (internal whistle-blowing) clearly exceeds the scope of the factual scenario presented in Palmer. In Palmer, the employee reported the alleged fraudulent activity to “unspecified authorities.” Clearly, from the factual background provided in the opinion, the report was made to outside authorities and not to her immediate employer or company management. The portion of the holding in Palmer which appears to recognize internal whistle-blowing as a basis for a wrongful discharge action exceeds the factual basis of the case and is mere dicta. Further, if the court intended to permit recovery for internal whistle-blowing to an immediate employer, it would not have required a showing by the employee that the employer had knowledge of the employee’s reporting prior to the discharge in order to maintain an action for whistle-blowing. If internal whistle-blowing to an immediate employer was contemplated by the court, the employer would be the entity receiving the report of alleged violation of rules, regulations, or the law and would, therefore, have knowledge of the employee reporting the alleged violation.
Until and unless the Kansas Supreme Court specifically recognizes internal whistle-blowing as an exception to the employment-at-will doctrine, neither this court nor the district courts have any basis for permitting recovery of such a claim. Zaniecki *217v. P.A. Bergner & Co., 143 Ill. App. 3d 668, 493 N.E.2d 419 (1986), is an example of a case where a court refused to expand whistle-blower protection to an employee who contended he was discharged because of internal reporting. In Zaniecki, the employee reported alleged criminal activity to the store’s chief security officer. The Illinois Court of Appeals looked for guidance from the Illinois Supreme Court decision in Palmateer v. International Harvester Co., 85 Ill. 2d 124, 421 N.E.2d 876 (1981). In Palmateer, the plaintiff was discharged for informing the police of his suspicions that a fellow employee was involved in criminal activity on the job, and for agreeing to testify against him if it came to that. In Zaniecki, the court held this internal reporting was insufficient to support a whistle-blower claim. Whether our Supreme Court would expand whistle-blower protection to internal reporting or would follow the rationale of Zaniecki remains to be seen.