Herndon v. Best Buy Co. , 634 F. App'x 645 ( 2015 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT December 15, 2015
_________________________________
Elisabeth A. Shumaker
Clerk of Court
THOMAS HERNDON,
Plaintiff - Appellant,
v. No. 15-2029
(D.C. No. 1:14-CV-00162-KBM-RHS)
BEST BUY CO., INC., (D. N.M.)
Defendant - Appellee.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before KELLY, BACHARACH, and MORITZ, Circuit Judges.
_________________________________
Plaintiff Thomas Herndon appeals the district court’s Fed. R. Civ. P. 12(b)(6)
dismissal of his state law retaliatory discharge suit against his former employer, Best
Buy Co., Inc. Because we agree Herndon has not stated a cognizable legal claim, we
affirm the dismissal.
BACKGROUND
Herndon, a general manager for Best Buy, hired an individual who had a prior
felony conviction for armed bank robbery. Best Buy terminated Herndon’s
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
employment, stating he made a “questionable hiring decision without partnering with
appropriate leadership that could have put the company at risk.” Aplt. App. at 17
(internal quotation marks omitted).
Herndon filed suit in New Mexico state court claiming retaliatory discharge,
and Best Buy removed the suit to federal court on diversity grounds. In New
Mexico, a claim of retaliatory discharge “allows a discharged at-will employee to
recover in tort when his discharge contravenes a clear mandate of public policy.”
Chavez v. Manville Prods. Corp., 777 P.2d 371, 375 (N.M. 1989). Herndon points to
New Mexico’s Criminal Offender Employment Act (COEA), N.M. Stat. Ann.
§§ 28-2-1 to -6, as support for his argument that terminating him for hiring a
convicted felon violated clear public policy.
The COEA provides that:
[I]n determining eligibility for employment with the state or any of its
political subdivisions or for a license, permit, certificate or other
authority to engage in any regulated trade, business or profession, the
board or other department or agency having jurisdiction may take into
consideration a conviction, but the conviction shall not operate as an
automatic bar to obtaining public employment or license or other
authority to practice the trade. . . .
N.M. Stat. Ann. § 28-2-3 (emphasis added). The COEA also provides that a state
board or agency may refuse to grant or renew “public employment or license” to a
person “convicted of a felony or a misdemeanor involving moral turpitude” if the
conviction either “directly relates to the particular employment” or the employee
“has not been sufficiently rehabilitated to warrant the public trust.” Id.
§ 28-2-4(A)(1) and (2). The COEA’s stated purpose is to give ex-convicts “the
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opportunity to secure employment or to engage in a lawful trade . . . to make
rehabilitation feasible.” Id. § 28-2-2.
Best Buy argued, and the district court agreed, that the COEA’s requirements
apply only to state employers and licensing authorities, and do not evidence a public
policy in New Mexico of restricting a private employer’s choice not to hire an ex-
convict. Thus, the district court ruled Herndon failed to state a claim for which relief
can be granted. Herndon appeals.
DISCUSSION
The issue on appeal is whether Best Buy’s termination of Herndon because he
hired a convicted armed-robbery felon violated a clear mandate of New Mexico’s
public policy as evidenced by the COEA. The substantive law of New Mexico, the
forum state in this diversity action, governs our analysis. See Stickley v. State Farm
Mut. Auto. Ins. Co., 505 F.3d 1070, 1076 (10th Cir. 2007). We review de novo the
district court’s statutory interpretation, Coffey v. Freeport McMoran Copper & Gold,
581 F.3d 1240, 1245 (10th Cir. 2009) (per curiam), and its Rule 12(b)(6) dismissal.
Jordan-Arapahoe, LLP v. Bd. of Cty. Comm’rs, 633 F.3d 1022, 1025 (10th Cir.
2011).
“The linchpin of a cause of action for retaliatory discharge is whether by
discharging the complaining employee the employer violated a clear mandate of
public policy.” Shovelin v. Cent. N.M. Elec. Co-op., Inc., 850 P.2d 996, 1006
(N.M. 1993) (internal quotation marks omitted). “A clear mandate of public policy
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sufficient to support a claim of retaliatory discharge may be gleaned from the
enactments of the legislature and the decisions of the courts.” Id.
The district court quoted and thoroughly analyzed the COEA’s requirements,
and concluded from the plain language of the statute that its provisions apply only to
public entities. It noted that § 28-2-3 applies only to state employment or eligibility
for a state license; that § 28-2-4 lists the reasons a state board or agency may refuse
to hire or issue a license to a person convicted of a felony or a misdemeanor
involving moral turpitude; and that § 28-2-5 exempts law enforcement agencies from
the COEA. Herndon doesn’t dispute the district court’s determination that the
COEA’s provisions apply only to the state and its agencies, not to private employers.
Instead, he contends the COEA’s broadly-worded legislative purpose demonstrates
that, irrespective of the COEA’s actual provisions, New Mexico has a clear public
policy prohibiting a private employer from discharging an employer because he or
she hired a felon.
As Herndon points out, the COEA’s description of legislative purpose lacks
any language limiting its scope to state employment or licensure:
The legislature finds that the public is best protected when criminal
offenders or ex-convicts are given the opportunity to secure
employment or to engage in a lawful trade, occupation or profession and
that barriers to such employment should be removed to make
rehabilitation feasible.
N.M. Stat. Ann. § 28-2-2.
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Nevertheless, we can’t agree with Herndon’s suggestion that this statement expresses a
clear public policy mandate supporting his retaliatory discharge claim against Best Buy, a
private employer.
First, the New Mexico Legislature has mandated that “[t]he text of a statute or
rule is the primary, essential source of its meaning.” N.M. Stat. Ann. § 12-2A-19.
“New Mexico courts have long honored this statutory command . . . recognizing that
when a statute contains language which is clear and unambiguous, [courts] must give
effect to that language and refrain from further statutory interpretation.” Starko, Inc.
v. N.M. Human Servs. Dep’t, 333 P.3d 947, 956-57 (N.M. 2014) (brackets and
internal quotation marks omitted). Referring only to the COEA statement of purpose,
§ 28-2-2, Herndon argues that if the New Mexico “Legislature wanted the [COEA]
statute to apply only to state employers, it would have said so.” Aplt. Opening Br. at
13. But that is exactly what the Legislature did: it directed every COEA provision
solely to state employers and state licensing boards.
Second, the New Mexico Supreme Court has refused to broadly interpret
statements of legislative purpose to support retaliatory discharge claims. “Every
statute enacted by the legislature is in a sense an expression of public policy but not
every expression of public policy will suffice to state a claim for retaliatory
discharge.” Shovelin, 850 P.2d at 1006. “Unless an employee at will identifies a
specific expression of public policy, he may be discharged with or without cause.”
Id. at 1006-07 (emphasis added; brackets omitted). Herndon doesn’t point to any
specific legislative provision in the COEA or otherwise that encourages or requires
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private employers to hire convicted felons, or that prohibits a private employer from
terminating an employee for hiring a felon.
Herndon notes the New Mexico Supreme Court has said “there may, in some
instance, be no expression of public policy [and] the judiciary would have to imply a
right as well as a remedy.” Id. at 1006 (brackets internal quotation marks omitted).
But it is “rare for courts to recognize a cause of action for retaliatory discharge in the
absence of any supporting public policy expressed in a constitution, statute, or
regulation.” Gutierrez v. Sundancer Indian Jewelry, Inc., 868 P.2d 1266, 1282
(N.M. Ct. App. 1993). And Herndon points to no New Mexico court that has implied
a public policy prohibiting private employers from choosing not to hire convicted
felons.
Instead, courts interpreting New Mexico law “have adhered to the rule that
retaliatory discharge is a narrow exception to the rule of employment at will and have
refused to expand its application.” Shovelin, 850 P.2d at 1007 (collecting cases).
Moreover, we are mindful that as a federal court, we shouldn’t “expand New Mexico
law in a manner that the state courts have not, especially when such an expansion
would, in effect, severely limit at-will employment in New Mexico, an at-will
employment state.” Gonzales v. City of Albuquerque, 849 F. Supp. 2d 1123, 1171
(D.N.M. 2011), aff’d, 701 F.3d 1267 (10th Cir. 2012). We agree with the district
court that New Mexico has not recognized a clear public policy mandate restricting
private employers from deciding not to hire convicted felons or for terminating a
employee for making such a hire.
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Accordingly, we affirm the district court’s dismissal of this action for failure
to state a claim and we deny Herndon’s motion to certify a question of state law to
the New Mexico Supreme Court.
Entered for the Court
Nancy L. Moritz
Circuit Judge
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