Last week, two Ohio appellate courts rejected public policy discharge claims on the basis that sufficient criminal and other statutory penalties existed which rendered unnecessary any common law employment claims for retaliation. Last week, a Paulding County appellate court affirmed the dismissal of the retaliation complaint of a discharged employee who had reported alleged illegal bribery of a government official because the statutes which were allegedly violated by the bribes contained sufficient criminal penalties which made it unnecessary to create or recognize a new common law wrongful discharge or retaliation claim in order to protect enforcement of the public policy. On the same date, the Geauga County appellate court affirmed an employer’s summary judgment on the public policy claim because the plaintiff had not been employed at will and could only be terminated for cause or at the expiration of this contractual term. Further, the plaintiff’s alleged report of scrap metal theft lacked merit when there was evidence that he had failed to follow up with the police when so directed and eventually retracted his allegation. Finally, his claim failed because there were sufficient criminal and statutory penalties in place to deter theft without creating or recognizing a new common law claim for unlawful retaliatory discharge.
In the first case, the plaintiff alleged that he was fired in
January 2020 in retaliation for reporting to his employer’s legal department in
June 2019 and the HR department in November and again in December 2019 that a manager
had bribed a township government official (with cases of beer and by paying $125K
for work on the farm of that official’s parents) in order to obtain the
official’s approval for a company construction project which that official had
previously opposed. Werkowski
v. EDP Renewables N. Am., L.L.C.,
2023-Ohio-4178. The plaintiff
apparently did not comply with Ohio’s whistleblower statute and, instead,
brought a common law wrongful discharge claim. The trial court dismissed the claim based
solely on the complaint’s allegations on the grounds that no actionable public
policy was jeopardized by the termination of the plaintiff’s employment. Not
every public policy is threatened or jeopardized by the retaliatory
actions of an employer; sometimes there are other types of government remedies
in place – including criminal penalties – which are sufficient to deter
violations of that policy or statute without creating a new employment cause of
action.
{¶7} “The jeopardy-element analysis generally involves inquiring into the existence of any alternative means of promoting the particular public policy to be vindicated by a wrongful-termination-in-violation-of-public-policy claim.” . . . “When the sole source of the public policy is a statutory scheme that provides rights and remedies for its breach * * *, we must consider whether those remedies are adequate to protect society’s interest as to the public policy.” Id. “It is less likely that a wrongful-termination-in-violation-of-public-policy claim is necessary” where the statutory scheme includes remedies for violations. Id.
{¶8} In this analysis, a distinction exists between public policies that “protect a particular government interest” and “public policies that protect substantial rights of the employee.” . . . . Where a governmental interest is at stake, “[t]he lack of a personal remedy in the statutory scheme does not jeopardize the policy because the remedies contained in the statute sufficiently protect society’s interest and discourage employers from engaging in the prohibited behavior.” Id. at ¶ 20. Thus, in deciding the jeopardy element, courts “must determine (1) whether the public policy underlying * * * [the statute] promotes society’s interests, protects substantive rights of employees or both, and (2) whether the remedies outlined in * * * [that statute] adequately protect such interests and/or rights.” . . .
. . . . In this case, [the plaintiff] points to several statutes that prohibit bribery or racketeering in R.C. 2921.02, 18 U.S.C. 201, and 18 U.S.C. 1962 as establishing a clear public policy against official corruption. Assuming for the sake of analysis that these statutes satisfy the clarity element, the identified public policy would ultimately promote a governmental or societal interest and would not directly address the substantive rights of employees. . . .
On appeal, [the plaintiff] argues that, in the absence of a personal remedy for employees who are terminated after reporting bribery schemes, the penalties in the identified statutes are “inadequate to protect the employees’ substantive rights.” . . . However, the Ohio Supreme Court has concluded that the “lack of a personal remedy” does not, by itself, jeopardize a public policy where a governmental or societal interest is at stake. . . . . Under House, the issue is whether the existing “statutory remedies, which do not include a personal remedy for a dismissed employee, adequately discourage the employer’s wrongful conduct and are sufficient to protect society’s interests * * *.”
{¶11} In determining whether the public policy is adequately protected, the Ohio Supreme Court has considered the penalties imposed for violations of the statutory scheme and the existence of other statutory protections for employees. House, supra, at ¶ 17, 22. Turning to the case presently before us, the statutes identified by [the plaintiff] contain significant criminal penalties to deter the bribery of public officials. Further, the General Assembly has enacted other provisions to protect whistleblowers, but [the plaintiff] did not avail himself of these protections in this case. . . . . Assuming for the sake of this analysis that the provisions identified by [the plaintiff] satisfy the clarity element, we do not conclude that the existing statutory remedies would be inadequate to protect a public policy against official corruption pursuant to the reasoning in House, . . . .
{¶12} While [the plaintiff’s] arguments are intriguing, the Ohio Supreme Court has held that the “lack of a personal remedy” does not jeopardize a public policy if the statutory scheme provides remedies that would be sufficient to protect the identified governmental or societal interest.
In the second case, the plaintiff had been terminated
following a whistleblower complaint by a subordinate and investigation which
revealed that he had obtained an interest free $50K personal loan from a
contractor of the employer and had work performed on his vacation home by a
different contractor of the employer. Underwood
v. Cuyahoga Community College, 2023-Ohio-4180. He had
apparently stopped using one of the contractors after repaying the loan and
that contractor provided evidence against him. He was in charge of managing both of those
contractors and this presented an obvious conflict of interest in violation of
various employer policies and state ethics laws. He was not prosecuted because of the passage
of the applicable statutes of limitations. He was nonetheless fired and then filed
suit.
The plaintiff alleged that he was actually fired for reporting
a subordinate for stealing scrap metal a few years earlier, but the evidence
showed that he had failed to follow up with the police about the alleged theft
and later retracted his allegation. The
court found that there was no clear public policy implicated by a retracted allegation. The plaintiff attempted to argue that he had
let it drop because the employer had dismissed his concerns. He presented evidence about a lack of
investigation into that situation or into free work by that employee on the
home of the employer’s security chief. Nonetheless, despite his allegations, the
employer had renewed his annual employment contract after he retracted the
allegations. Interestingly, this subordinate was the same
individual who had reported the plaintiff’s ethics violations.
Finally, as in the prior case, the Court found that the
public policy against theft was sufficiently protected by criminal laws and
there was no need to create or recognize a common law retaliation claim for
reporting alleged theft.
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
