Piel v. City of Federal Way , 177 Wash. 2d 604 ( 2013 )

Stephens, J.

¶1 This case requires us to consider whether a tort claim for wrongful termination in violation of public policy is viable based on provisions of chapter 41.56 RCW involving the Public Employment Relations Commission (PERC). The lower court dismissed Richard Piel’s suit against the city of Federal Way (City), concluding the existence of statutory remedies authorized under chapter 41.56 RCW prevented him from establishing the “jeopardy prong” of the common law claim. We take this opportunity to better explain our jeopardy analysis and harmonize our recent decisions in Cudney v. ALSCO, Inc., 172 Wn.2d 524, 259 P.3d 244 (2011), and Korslund v. DynCorp Tri-Cities Services, Inc., 156 Wn.2d 168, 125 P.3d 119 (2005), with Smith v. Bates Technical College, 139 Wn.2d 793, 991 P.2d 1135 (2000). In Smith, we recognized that an employee protected by a collective bargaining agreement may bring a common law claim for wrongful termination based on the public policy provisions of chapter 41.56 RCW notwithstanding the administrative remedies available through PERC. Nothing in our later opinions in Korslund and Cudney altered this holding. We reverse the lower court’s order of dismissal and remand for further proceedings.

FACTS

¶2 At the time of incidents giving rise to this action, Richard Piel was a 25-year veteran of law enforcement, with over 11 years in the Federal Way Police Department (Department). Piel was promoted to lieutenant in 1998. Until the incidents at issue here, Piel had consistently received high marks in performance reviews.

¶3 In late 2002, the 12 lieutenants in the Department decided to create a union and Piel was chosen by the other lieutenants to manage its formation. Although the Department’s administration was initially supportive of the union activity, according to Piel the administration’s attitude toward the efforts later soured. Shortly thereafter, Piel began experiencing a marked increase in his duties and responsibilities without commensurate support. By 2004, Piel began to feel his unit was the target of unusual and obstreperous internal affairs investigations.

¶4 In January 2005, the lieutenant’s guild was officially certified. That same month, Piel received his yearly evaluation, albeit late. The evaluation rated Piel as performing poorly in his job functions. Piel later learned the negative reports were not generated by his commanding officer but by the deputy chief of the Department, which was outside the normal procedure for performance reviews. Meanwhile, his requests for assignments were denied and his unit continued to be the target of investigations from internal affairs.

¶5 In May 2005, Piel was injured on the job and had to take three months of leave to recover from corrective knee surgery. During his medical leave and upon his return, Piel was told he would be demoted and was relieved of some of his responsibilities based on allegedly poor performance. Similar incidents continued into 2006.

¶6 In March 2006, Piel advised an officer over the phone about the officer’s options after the officer stopped a fireman on suspicion of driving while under the influence. The Department alleged that Piel’s advice and involvement in the matter violated Department standards. On April 18, 2006, Piel was placed on administrative leave pending an investigation. He was terminated in July 2006. Piel successfully grieved his termination and was reinstated 14 months later. The City was ordered to pay all back pay and benefits.

¶7 Upon returning to his job, Piel was discouraged by the reception from his fellow officers. The City had not yet paid him his award of back pay and benefits. He was nervous and had not been sleeping well. His first two days back at work were stressful and tense. During this time, a conversation took place in the briefing room between Piel and other officers in which Piel allegedly expressed violent feelings against members of the Department. The parties dispute the facts about what actually happened in the briefing room.

¶8 An investigation followed. Ultimately, Piel was terminated for being untruthful about what had happened in the briefing room. Piel and his wife brought this suit for wrongful termination in violation of public policy, claiming, among other things, that he was fired for engaging in protected union-organizing activities.

¶9 The trial court dismissed the Piels’ suit on summary judgment. The court explained that

Korslund[, 156 Wn.2d 168,] is the controlling authority. Based on Korslund, the Court concludes that the remedies available to Piel through PERC are adequate to protect the public policy grounded in RCW 41.56. Since Piel cannot satisfy the “jeopardy” element, his wrongful discharge in violation of public policy claims grounded in RCW 41.56 are dismissed.

Clerk’s Papers at 771. The Piels sought direct review by this court based on the apparent conflict between Smith and Korslund. Consideration was stayed pending this court’s final decision in Cudney, 172 Wn.2d 524. After Cudney was decided, we retained this case for hearing and decision.

ISSUE

¶10 Are the remedies available to a public employee under chapter 41.56 RCW adequate as a matter of law, such that the employee may not assert a tort claim for wrongful discharge in violation of public policy? (Short Answer: No.)

ANALYSIS

¶11 This court first recognized a common law cause of action for wrongful discharge in violation of a clear mandate of public policy in the landmark case of Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 685 P.2d 1081 (1984). In cases following Thompson, we acknowledged that public policy tort claims generally arise in four areas: “(1) where the discharge was a result of refusing to commit an illegal act, (2) where the discharge resulted due to the employee performing a public duty or obligation, (3) where the [discharge] resulted because the employee exercised a legal right or privilege, and (4) where the discharge was premised on employee ‘whistleblowing’ activity.” Dicomes v. State, 113 Wn.2d 612, 618, 782 P.2d 1002 (1989) (citations omitted).

¶12 In Gardner v. Loomis Armored, Inc., 128 Wn.2d 931, 941, 913 P.2d 377 (1996), the court adopted the analytical framework set forth in a leading treatise to assess when an employee may recover for wrongful discharge in violation of public policy. See Henry H. Perritt Jr., Workplace Torts: Rights and Liabilities § 3.1 (1991). This test examines (1) the existence of a “clear public policy” (“clarity” element), (2) whether “discouraging the conduct in which [the employee] engaged would jeopardize the public policy” (“jeopardy” element), (3) whether the “public-policy-linked conduct caused the dismissal” (“causation” element), and (4) whether the employer is “able to offer an overriding justification for the dismissal” (“absence of justification” element). Gardner, 128 Wn.2d at 941. Here, only the jeopardy element is at issue.

¶13 Prior to our adoption of Perritt’s four-part test, our decisions tended to “lump[ ] the clarity and jeopardy elements together____”Id.; see also Dicomes, 113 Wn.2d at 617 (“[T]he employee has the burden to show that the discharge contravened a clear mandate of public policy.”). By parsing out these two related but conceptually distinct concepts, this court in Gardner sought to achieve “a more consistent analysis.” Gardner, 128 Wn.2d at 941. And in doing so, we made clear that “our adoption of this test does not change the existing common law in this state.” Id.

¶14 Describing the jeopardy element, we explained it serves to “guarantee [ ] an employer’s personnel management decisions will not be challenged unless a public policy is genuinely threatened.” Id. at 941-42 (emphasis added). Also, we articulated the requisite showing a plaintiff must make in order to establish jeopardy:

To establish, jeopardy, plaintiffs must show they engaged in particular conduct, and the conduct directly relates to the public policy, or was necessary for the effective enforcement of the public policy. This burden requires a plaintiff to “argue that other means for promoting the policy . . . are inadequate.” Perritt[, supra,] § 3.14, at 77. Additionally, the plaintiff must show how the threat of dismissal will discourage others from engaging in the desirable conduct.

Id. at 945 (first alteration in original) (citation omitted).

¶15 We considered the viability of a wrongful termination claim based upon the statutory remedies under chapter 41.56 RCW in Smith, 139 Wn.2d 793. Consistent with our decision in Gardner, we recognized that the tort of wrongful termination was not limited to at-will employment settings. Smith, 139 Wn.2d at 806-07. And we allowed the public employee’s claim to go forward notwithstanding her failure to pursue administrative remedies through PERC. Id. at 811. In the course of our analysis, we examined key distinctions between available tort remedies and statutory remedies and concluded that Smith should not be barred from bringing a tort claim “simply because her administrative and contractual remedies may partially compensate her wrongful discharge.” Id. at 806.

f 16 Not surprisingly, the Piels rely on Smith in asserting a wrongful termination claim against the City. The City counters that our recent decisions in Korslund and Cudney are inconsistent with recognition of a public policy tort claim where statutory remedies exist. Because Smith did not directly address the jeopardy analysis while Korslund and Cudney did, the City insists Smith is not on point. We do not agree. It is hard to miss the similarity between the second question at issue in Smith (Must the plaintiff’s tort claim be dismissed for failure to pursue statutory remedies through PERC?) and the question here (Must the plaintiff’s tort claim be dismissed because he can pursue statutory remedies through PERC?). See Smith, 139 Wn.2d at 808-11.

¶17 The City emphasizes that the tort of wrongful discharge operates to protect the public interest rather than the plaintiff’s private interest. Br. of Resp’t at 17. If the suggestion is that Smith concerned only the private interest in personal compensation, this theory is belied by clear language in the Smith opinion. In recognizing Smith’s right to pursue a wrongful discharge tort claim notwithstanding for-cause provisions of a collective bargaining agreement and available PERC remedies, the court focused on preserving important public policies. See Smith, 139 Wn.2d at 804 (“ ‘What is vindicated through the cause of action is not the terms or promises arising out of the particular employment relationship involved, but rather the public interest in not permitting employers to impose as a condition of employment a requirement that an employee act in a manner contrary to fundamental public policy.’ ” (quoting Foley v. Interactive Data Corp., 47 Cal. 3d 654, 667 n.7, 765 P.2d 373, 254 Cal. Rptr. 211 (1988))); see also id. at 809 (“As we have explained, the tort of wrongful discharge seeks to vindicate the public interest in prohibiting employers from acting in a manner contrary to fundamental public policy. Because the right to be free from wrongful termination in violation of public policy is independent of any underlying contractual agreement or civil service law, we conclude Smith should not be required to exhaust her contractual or administrative remedies.”).

¶18 The point of this discussion in Smith was to highlight the importance of having a tort remedy apart from the PERC remedy in order to advance public policy, not the plaintiff’s personal compensation. Quoting favorably from Retherford v. AT&T Communications of Mountain States, Inc., 844 P.2d 949 (Utah 1992), the court explained, “ ‘When an employer’s act violates both its own contractual just-cause standard and a clear and substantial public policy, we see no reason to dilute the force of the double sanction. In such an instance, the employer is liable for two breaches, one in contract and one in tort. It therefore must bear the consequences of both.’ ” Smith, 139 Wn.2d at 806 (quoting Retherford, 844 P.2d at 960). These passages convincingly refute any characterization of Smith as concerning only personal compensation, not public policy.

¶19 Nor is it possible to dismiss Smith as unconcerned with issues arising under the jeopardy prong of the Perritt test. While it is true that the court in Smith did not walk through the four-part Perritt test, it plainly considered the adequacy of PERC remedies and held they were insufficient to foreclose a common law tort claim. See 139 Wn.2d at 805 (identifying additional tort remedies and concluding that “Bates’ assumption that Smith’s pending action before PERC will fully resolve her wrongful discharge claim is wholly unsupported”), 810 (emphasizing unavailability of emotional distress and other tort damages under RCW 41.56.160). The adequacy of available remedies is the heart of jeopardy analysis in cases involving statutes that provide administrative schemes. In fact, the remedy analysis in Smith echoes the jeopardy analysis in Korslund and Cudney by calling out the available relief under the applicable statutes. See Korslund, 156 Wn.2d at 182 (noting “comprehensive remedies” under Energy Reorganization Act of 1974 (ERA), including back pay, compensatory damages, and attorney and expert witness fees); Cudney, 172 Wn.2d at 533 (describing remedies under the Washington Industrial Safety and Health Act of 1973 (WISHA), chapter 49.17 RCW, and observing, “WISHA is actually more comprehensive than the ERA and is more than adequate”).

¶20 Even after Korslund, Justice Madsen, in her concurrence/dissent in Danny v. Laidlaw Transit Services, Inc., 165 Wn.2d 200, 229, 193 P.3d 128 (2008), recognized that Smith involved the same adequacy analysis as Korslund. Significantly, she drew a clear distinction between the results in the two cases:

In such instances, the legal component of the jeopardy analysis is whether the remedies provided by the legislature adequately protect the public policy. See, e.g., Korslund, 156 Wn.2d at 181 (concluding, as a matter of law, comprehensive statutory remedies against retaliation for reporting safety violations in nuclear industry adequately protects relevant public policy interests); cf. Smith, 139 Wn.2d at 805 (finding statutory remedies for wrongful discharge for filing a grievance inadequate where no recovery for emotional distress is available).

Danny, 165 Wn.2d at 232-33 (Madsen, J., concurring/dissenting). This direct contrast of Korslund and Smith undercuts the City’s view that the cases involved different issues.

¶21 To accept the proposition that Smith failed to consider the adequacy of PERC remedies, we would have to disregard its holding recognizing “the fundamental distinction between a wrongful discharge action based in tort and an action [through PERC] based upon an alleged violation of an employment contract or a [collective bargaining agreement].” Smith, 139 Wn.2d at 809. Under Smith, the PERC remedial scheme does not provide adequate redress for the employer’s public policy violation in retaliating against the employee for engaging in protected activity. How then can the remedial scheme under PERC be deemed adequate as a matter of law? If it were, then we would have to conclude that the plaintiff’s claim in Smith should have been dismissed on summary judgment.

¶22 Similarly, other cases which have recognized the need for a public policy tort despite the existence of statutory remedies would be called into question. See, e.g., Thompson, 102 Wn.2d 219 (allowing claim for reporting violation of federal Foreign Corrupt Practices Act of 1977); Ellis v. City of Seattle, 142 Wn.2d 450, 13 P.3d 1065 (2000) (recognizing claim for retaliation for making safety complaints); Roberts v. Dudley, 140 Wn.2d 58, 993 P.2d 901 (2000) (allowing tort claim under RCW 49.12.200 and Washington’s Law Against Discrimination (WLAD), chapter 49.60 RCW); Bennett v. Hardy, 113 Wn.2d 912, 784 P.2d 1258 (1990) (recognizing claim under WLAD). An overbroad reading of Korslund and Cudney would fail to account for this long line of precedent allowing wrongful discharge tort claims to exist alongside sometimes comprehensive administrative remedies. Importantly, neither case purported to overrule anything.

¶23 Declaring a wrongful termination tort claim dead on arrival in the face of administrative remedies would likewise unsettle the body of law this court has developed addressing collateral estoppel where wrongful discharge tort claims coexist with administrative remedies. We have on several occasions discussed the interplay between administrative proceedings such as under PERC and wrongful termination tort actions. In Reninger v. Department of Corrections, 134 Wn.2d 437, 951 P.2d 782 (1998), we held that an employee who loses in an administrative proceeding (there, a personnel appeals board hearing) may be collaterally estopped from asserting a wrongful discharge claim. In Smith, we noted that Reninger made it “even more compelling” to hold that the public policy tort does not require first pursuing PERC administrative remedies. 139 Wn.2d at 810. Recognizing the collateral estoppel effect of a prior administrative proceeding, we observed:

Thus, if employees are required to exhaust all available administrative remedies in order to bring a civil suit for wrongful termination, the administrative remedy could be the only available remedy. Such a rule goes beyond the usual understanding of exhaustion as a prerequisite to seeking judicial relief and ignores the fundamental distinction between contract and tort actions.

Id. at 811 (citation omitted). And, in Christensen v. Grant County Hospital District No. 1, 152 Wn.2d 299, 96 P.3d 957 (2004), we examined both Reninger and Smith, and held that factual findings in a PERC administrative proceeding have preclusive effect in a later tort action for wrongful discharge. We found it especially important that the plaintiff “chose to litigate in the administrative setting” before bringing a tort claim. Id. at 313; see also id. at 318 n.10 (noting plaintiff had a choice). We never doubted the appropriateness of bringing a tort claim instead of or in addition to a PERC action because both administrative and tort claims were contemplated by the legislature. Id. at 316. Lower courts and litigants would fairly ponder why we have been so careful to define the limits of collateral estoppel in a wrongful discharge action that follows a PERC action if, at the end of the day, no such action were possible.

¶24 In short, we refuse to disregard the body of law we have developed addressing wrongful termination claims in the context of statutory schemes providing for administrative remedies. In the particular context of PERC, Smith and later cases recognize that the limited statutory remedies under chapter 41.56 RCW do not foreclose more complete tort remedies for wrongful discharge. Smith cannot be dismissed as concerned with only personal compensation and not public policy, nor can it be recast as having nothing to do with the jeopardy question.

¶25 Recognizing the continued vitality of Smith does not require retreat from our recent cases. The asserted tension between Smith, Korslund, and Cudney eases upon a closer examination of the administrative remedies at issue in each case. Neither Korslund nor Cudney involved an administrative scheme that this court had previously recognized is inadequate to vindicate an important public policy. See Korslund, 156 Wn.2d at 181, 183 (involving federal ERA); Cudney, 172 Wn.2d at 526-27 (involving WISHA and Washington laws prohibiting driving under the influence). In contrast, in Smith the court emphasized that the administrative remedies allowed through PERC fall short of addressing the broader public interests at issue in a wrongful discharge tort claim. See 139 Wn.2d at 805 (“But while the contractual remedies available to certain employees redress violations of the underlying employment contract, these remedies do not protect an employee who is fired not only Tor cause’ but also in violation of public policy.”), 809 (rejecting exhaustion requirement as counter to “fundamental distinction between a wrongful discharge action based in tort and an action based upon an alleged violation of an employment contract or a [collective bargaining agreement]”). Smith unequivocally held that PERC is inadequate to vindicate the public policy at issue when an employee is terminated in retaliation for asserting collective bargaining rights. Nothing in Korslund or Cudney provides a basis to second-guess this aspect of Smith.

¶26 Moreover, we should not reach to expand the jeopardy analysis of Korslund or Cudney when the very statutory scheme that announces the public policy at issue also cautions that its administrative remedies are intended to be additional to other remedies. PERC contains such a provision, RCW 41.56.905, which states, “The provisions of this chapter are intended to be additional to other remedies and shall be liberally construed to accomplish their purpose.” No similar language was identified under the statutory schemes at issue in Korslund or Cudney. This language is significant because it respects the legislative choice to allow a wrongfully discharged employee to pursue additional remedies beyond those provided by statute. It is the strongest possible evidence that the statutory remedies are not adequate to vindicate a violation of public policy.

¶27 Each public policy tort claim must be evaluated in light of its particular context. We must carefully consider the PERC administrative scheme before us and acknowledge that we have previously held it is not adequate to vindicate public policy when an employee is terminated for asserting collective bargaining rights. Korslund and Cudney addressed different statutory schemes and do not dictate the outcome here. Consistent with Smith, we hold that the statutory remedies available to public employees through PERC are inadequate — and a wrongful discharge tort claim is therefore necessary — to vindicate the important public policy recognized in chapter 41.56 RCW. Accordingly, we reverse the lower court’s order granting summary judgment of dismissal and remand for further proceedings consistent with this opinion.

C. Johnson and González, JJ., and Chambers and Seinfeld, JJ. Pro Tem., concur.