Opinion
No. A05-481.
Filed September 20, 2005.
Appeal from the District Court, St. Louis County, File No. C1-04-6018357.
Thomas F. Andrew, Aaron R. Bransky, Brown, Andrew Signorelli, P.A., (for appellant)
John M. LeFevre, Jr., Bryan D. Shirley, Kennedy Graven, Chartered, (for respondent)
Considered and decided by Kalitowski, Presiding Judge; Shumaker, Judge; and Minge, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Appellant challenges summary judgment in favor of respondent. Because we conclude there are genuine issues of material fact as to whether appellant was terminated in violation of the whistleblower law for refusing to violate the Data Practices Act, we reverse and remand on that matter. But because we conclude that there are no genuine issues of material fact regarding whether appellant was terminated in violation of the whistleblower law for participating in a state investigation or for reporting allegedly illegal activities to the city officials or the state auditor, we affirm summary judgment on those matters.
FACTS
Appellant Sherry Erickson began working as the city clerk and treasurer for respondent City of Orr (city) in October 2000. She was an at-will employee. During her employment, appellant raised concerns about improper activity.
First, in May 2001, appellant informed the private firm that audited the city's books that the city administrator was buying fuel for his airplane from the city for only 50 cents per gallon over the cost of the fuel. In their 2001 audit report, the city auditors stated that "the City has allowed employee discounts for various items purchased through the City. . . . In order to prevent noncompliance with conflict of interest statutes, we strongly suggest the City discontinue these policies immediately." Appellant also informed the city council of the matter in 2001. When the city auditors were performing the audit for 2002, appellant told them that the illegal employee discounts were continuing. The audit report for 2002 stated, "Council minutes indicated the City upheld the discount policy. In order to prevent noncompliance with conflict of interest statutes, we strongly suggest the City discontinue these policies immediately." Because the city administrator was on a leave of absence, in December 2002 the city council appointed appellant to be the city administrator on an interim basis from January 1, 2003, through June 30, 2003. As the interim city administrator, appellant terminated the employee discounts in June 2003.
The next matter arose in the summer of 2001, when the city administrator and mayor contracted for satellite television service for the city's municipal liquor store, using the name of a fictitious individual in order to obtain lower rates. In the spring of 2002, appellant informed the city auditors of this practice. In the fall of 2003, the satellite television company discovered that the service was being used by the liquor store, cancelled the service, and issued a refund check for $110.96, payable to the fictitious name. The city council asked appellant, as city treasurer, to cash that check on behalf of the city, but appellant refused. The refund check was never cashed.
In 2003, the city council designated appellant as the city's data-practices-compliance officer, pursuant to Minn. Stat. § 13.05, subd. 13 (2004) (Data Practices Act). As the data-practices-compliance officer, appellant was required to provide public information to the public upon request. Minn. Stat. § 13.03 (2004).
Appellant generally received positive comments on her performance reviews. In January 2004, council members told her, "There's no doubt about your job performance, it's great." But also at that January review, appellant was questioned why requests for information about pull-tabs at the municipal liquor store were processed so quickly. On March 12, 2004, at a city council meeting, appellant was again questioned by council members as to why the public received information so quickly. On March 18, 2004, the Duluth News Tribune published a front-page article regarding an investigation of the city administrator, who was also a legislator, and his handling of money earmarked for snowmobile trails. Information in the article had been obtained by the organization Minnesotans for Responsible Recreation (MRR) from appellant as the city data-practices-compliance officer.
A few days later, on March 22, 2004, appellant received a handwritten note, signed by one city council member and the mayor, informing her that she was being placed on a paid leave of absence "due to allegations of possible misconduct." Appellant left work and went home. That evening, a representative of the Office of the State Auditor (OSA) called appellant at home, requesting information for an investigation regarding the snowmobile trail money. The OSA investigator also asked questions about the employee fuel discounts and the satellite cable account for the municipal liquor store. Appellant provided the requested information.
Appellant's attorney contacted the city council to find out what the "allegations of possible misconduct" were, but the city council would not provide her attorney with further information. The city council held a closed termination hearing on March 26, 2004, which appellant did not attend. The city council voted to terminate appellant's employment.
Appellant sued the city, alleging her employment was terminated in violation of Minn. Stat. § 181.932 (2004), the whistleblower law, because she refused to comply with the city's "implied order" to violate the Data Practices Act and for reporting the city's allegedly illegal practices to the OSA, mayor, city council, and city auditors. The city moved for summary judgment, arguing that appellant had not established a prima facie case of retaliation under Minn. Stat. § 181.932.
The district court granted the city's motion for summary judgment in February 2005. The district court recognized that in the course of her employment, appellant had reported potential violations of state and federal laws to city council members, the mayor, and city's private audit firm. But the court determined that appellant did not report any violations to any outside agencies until the OSA investigator called her on the evening of March 22, 2004, after appellant was placed on paid leave. The district court determined that appellant failed "to establish a causal connection between her protected conduct and [the city's] alleged retaliatory actions." The district court observed:
[Appellant] cannot prove that the City Council members and the Mayor read the published reports in the Duluth or local papers about the OSA investigations. [Appellant] can only speculate that the Council members and the Mayor read them. Common sense would dictate that they did[,] but without further proof, [appellant] offers only conjecture. Regardless, [appellant] cannot link her termination on the morning of March 22, 2004 to her "report" to OSA on the evening of March 22, 2004.
Because the district court concluded that the city never told appellant to violate the Data Practices Act and appellant could not prove she was terminated for reporting law violations to an outside agency, the district court determined that there were no genuine issues of material fact and granted the city's motion for summary judgment. This appeal follows.
DECISION
On appeal from summary judgment, we determine whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).
A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.
Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). There are no genuine issues of material fact when the evidence presented by the nonmoving party "merely creates a metaphysical doubt as to a factual issue and is not sufficiently probative with respect to an essential element of the nonmoving party's case to permit reasonable persons to draw different conclusions." DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997) (citation omitted).
Appellant asserts that the district court erred by granting the city's motion for summary judgment. Appellant argues that there are still genuine issues of material fact as to whether her employment was terminated because she refused to violate the Data Practices Act, because she cooperated with the OSA's investigation of the city's handling of state money for snowmobile trails, and/or because she reported suspected violations of law to the city auditors, the mayor, the city council, the city administrator, and the OSA.
Minnesota's whistleblower law prohibits an employer from discharging or otherwise discriminating against an employee because
(a) the employee, or a person acting on behalf of an employee, in good faith, reports a violation or suspected violation of any federal or state law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official;
(b) the employee is requested by a public body or office to participate in an investigation, hearing, inquiry; [or]
(c) the employee refuses an employer's order to perform an action that the employee has an objective basis in fact to believe violates any state or federal law or rule or regulation adopted pursuant to law, and the employee informs the employer that the order is being refused for that reason[.]
Minn. Stat. § 181.932, subd. 1 (2004). Minnesota courts apply the so-called " McDonnell Douglas" analysis to whistleblower claims. Cokley v. City of Otsego, 623 N.W.2d 625, 630 (Minn. App. 2001) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 1824 (1973)), review denied (Minn. May 15, 2001). Under this analysis, the employee has the burden of proof to establish a prima facie case of retaliatory discharge, which consists of "(1) statutorily-protected conduct by the employee, (2) adverse employment action by the employer, and (3) a causal connection between the two." Hubbard v. United Press Int'l, Inc., 330 N.W.2d 428, 444 (Minn. 1983). Once the employee has established a prima facie case, the burden shifts to the employer to articulate a legitimate, non-retaliatory justification for its action. Cokley, 623 N.W.2d at 630. Then the burden shifts back to the employee to demonstrate that the employer's justification is pretextual. Id. The employee's burden at all times is to prove by a preponderance of the evidence that the basis for the employer's action was impermissible. Id. A. Data Practices Act
The first issue is whether appellant was terminated in violation of Minn. Stat. § 181.932, subd. 1(c) of the whistleblower law for insisting on providing information as required by the Data Practices Act. Our analysis of this issue follows the McDonnell Douglas format.
1. Statutorily-protected conduct
As the city's data-practices-compliance officer, appellant was required by the Data Practices Act to release public information upon request; withholding information constitutes a misdemeanor. See Minn. Stat. §§ 13.03, subd. 3, 13.09 (2004). The district court stated that appellant "gave out public information to the local newspapers and to several individuals from community groups." But the district court determined that appellant "admitted that she was never ordered to withhold public data even though there were some complaints as to the speed at which she produced certain data."
The law does not require that the employer explicitly or blatantly order the employee to violate the law. See Minn. Stat. § 181.932, subd. 1(c). Indirect or implied directions could constitute an adequate order. Cf. Piekarski v. Home Owners Sav. Bank, F.S.B., 956 F.2d 1484, 1491-92 (8th Cir. 1992) (holding that a "stern look" is not a demand to break the law, but not precluding the possibility that an implied request to break the law could constitute a violation of an earlier version of Minn. Stat. § 181.932, subd. 1(c)). We conclude that because the whistleblower law is intended to protect employees from retaliation and because improper activity is often shielded; clear pressure, guarded statements, or other implied directives that convey the message that an employee should violate the law trigger the protection of subdivision 1(c).
Appellant claimed that during her annual evaluation by the city council in January 2004, council members questioned her about her compliance with requests for information about pull-tabs at the municipal liquor store and the newspaper article that resulted. She stated that council members repeatedly questioned her as to how and why one newspaper obtained the information so quickly. Appellant asserts that questioning was critical and caused her to become concerned about complying with requests for public data. At a city council meeting in March 2004, ten days before appellant received notice that she was being placed on paid leave, appellant stated that the city council again questioned her about how and why one newspaper received information so quickly. Viewing these facts in the light most favorable to appellant, there is a genuine issue of material fact as to whether the acts of the city council members constituted a directive to appellant to withhold or delay the release of information, in violation of the Data Practices Act.
Respondent argues that appellant did not expressly refuse to comply with any order to violate the Data Practices Act, as required by the whistleblower law. Minn. Stat. § 181.932, subd. 1(c), does require that the employee inform the employer that the order is being refused because the order would cause the employee to violate the law. The record indicates that at the January 2004 performance evaluation, in reference to the speed of appellant's compliance with requests for information, appellant did inform the city council that she was "not going to cover for anybody" and "if [members of the public] come and ask for public data, I've got to give it to them." This could be considered an express refusal by appellant to comply with a city council directive that she violate the Data Practices Act and creates a genuine issue of material fact.
2. Adverse action
Appellant's employment was terminated. See Minn. Stat. § 181.932, subd. 1 (stating that an employee is protected from being discharged). Respondent concedes the termination was an adverse action.
3. Causal connection
The city council questioned appellant about the speed with which she released public information on at least two occasions. One of those occasions was March 12, 2004, only ten days before appellant received notice that she was being placed on paid leave. The Duluth newspaper published a front-page article on March 18, 2004, containing negative information about the city that had been provided by appellant. Appellant was placed on paid leave on March 22. Common sense dictates that the city council was aware of the Duluth newspaper article. "[R]etaliatory motive is difficult to prove by direct evidence and an employee may demonstrate a causal connection by circumstantial evidence that justifies an inference of retaliatory motive." Cokley, 623 N.W.2d at 632. Close proximity in time between a complaint and a termination decision has been held to support an inference of reprisal. See Thompson v. Campbell, 845 F. Supp. 665, 675 (D. Minn. 1994) (determining that termination four months after plaintiff filed a complaint, together with other circumstantial evidence, raised an issue of material fact concerning causal connection); Dietrich v. Canadian Pac. Ltd., 536 N.W.2d 319, 327 (Minn. 1995) (stating that a causal connection may be established by proximity in time between a statutorily-protected act and an adverse employment action). Because of the close proximity in time between the city council's questioning of appellant's data-release practices, the publication of the newspaper article, and appellant's termination, we conclude there is a genuine issue of material fact as to whether appellant's compliance with the Data Practices Act was the cause of her termination. At this stage in the proceeding, the implication that city officials were aware of the newspaper article is adequate to survive summary judgment.
B. OSA's Investigation
The second issue is whether appellant's employment was adversely affected in violation of Minn. Stat. § 181.932, subd. 1(b) of the whistleblower law because OSA asked that appellant assist in an investigation. Again, our analysis follows the McDonnell Douglas format.
1. Statutorily-protected conduct
On the morning of March 22, 2004, appellant was placed on paid leave. The same day, the OSA tried to contact her during its investigation of a complaint by another party. The investigation concerned the employee fuel discounts, fraudulent satellite cable account at the municipal liquor store, and money for snowmobile trails. On the evening of March 22, appellant talked to the OSA and provided the requested information.
Respondent argues, and the district court noted, that appellant's claim is limited because the OSA called appellant; appellant did not call the OSA. But the whistleblower law does not require an employee to initiate contact with a state agency in order to be protected. The whistleblower law protects an employee from being discharged for participating in the investigation of a public body or office, not just for reporting violations of law. Minn. Stat. § 181.932, subd. 1(b). Thus, the fact that OSA initiated the contact does not remove appellant from the class of persons protected by the statute.
2. Adverse action
Again, appellant's employment was terminated, and respondent concedes the termination was an adverse action.
3. Causal connection
The district court determined that appellant "cannot link her termination on the morning of March 22, 2004 to her `report' to OSA on the evening of March 22, 2004." The district court is correct that appellant did not participate in the OSA investigation until after she was placed on paid leave. Although appellant's formal termination occurred on March 26, after she participated in the investigation, the fact that she was placed on paid leave before she spoke with the OSA strongly indicates that her participation in the investigation or any reports she made to OSA were not the cause of her termination. Additionally, there is no evidence that the city council was aware that appellant spoke with anyone from the OSA, participated in the OSA's investigation, or was asked to participate. Therefore, we conclude there is no genuine issue of material fact as to whether there was a causal connection between appellant's termination and her participation in the OSA investigation or any reports she made to OSA.
C. Reports to the City Auditors, Mayor, and City Council
The third issue is whether appellant's employment was adversely affected in violation of Minn. Stat. § 181.932, subd. 1(a) of the whistleblower law for reporting various violations of law to city officials and the OSA. Again, our analysis follows the McDonnell Douglas format.
1. Statutorily-protected action
The first sub-issue is whether appellant's statements regarding improper employee discounts and a fictitious account for satellite television service were protected reports. An appellate court "may determine as a matter of law that certain conduct does not constitute a `report'" under the whistleblower law. Rothmeier v. Inv. Advisers, Inc., 556 N.W.2d 590, 593 (Minn. App. 1996), review denied (Minn. Feb. 26, 1997). We review questions of law de novo. Modrow v. JP Foodservice, Inc., 656 N.W.2d 389, 393 (Minn. 2003).
The whistleblower law does not define the term "report." But we have previously defined it as "to make or present an often official, formal, or regular account of" or "[t]o relate or tell about; present." Janklow v. Minn. Bd. of Examiners for Nursing Home Adm'rs, 536 N.W.2d 20, 23 (Minn.App. 1995) (quotation omitted), aff'd, 552 N.W.2d 711 (Minn. 1996). The district court observed that appellant discussed her concerns regarding the employee fuel discounts and satellite cable service with the city council, the mayor, and the city auditors. The district court determined that because appellant did not discuss these issues with any outside agencies, she did not make any "reports." The whistleblower law, however, states that an employee may not be discharged for "report[ing] a violation or suspected violation of any federal or state law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official." Minn. Stat. § 181.932, subd. 1(a) (emphasis added). The statute does not require an employee to make a report with an outside agency.
We also observe, though, that the mere mention of a suspected violation that the employer already knows about does not constitute a "report" under the statute. Donahue v. Schwegman, Lundberg, Woessner Kluth, P.A., 586 N.W.2d 811, 813-14 (Minn. App. 1998), review denied (Minn. Feb. 18, 1999); Rothmeier, 556 N.W.2d at 593. The record indicates that appellant did more than merely mention a suspected violation. She brought up the potentially illegal activities to multiple groups and individuals over a period of several years, and she refused to cash a check that she believed had been issued to a fraudulent entity.
We must also examine why the reports were made. Obst v. Microtron, Inc., 614 N.W.2d 196, 202 (Minn. 2000). "The central question is whether the reports were made for the purpose of blowing the whistle, i.e., to expose an illegality." Id. When appellant reported the issues of employee fuel discounts and satellite cable service to the city council and city auditors, she told them that she believed the practices were illegal and asked them to discontinue the practices. Because appellant reported these issues at public city council meetings, she could have been attempting to expose the illegality of the city's actions. But appellant was the city clerk/treasurer and reporting these issues may have been part of her duties. Because it is unclear whether appellant reported these issues to expose allegedly illegal city actions, there is an issue of fact as to whether appellant's actions were protected by the whistleblower law.
2. Adverse Action
As we have previously stated, appellant's termination was an adverse action.
3. Causal Connection
The next sub-issue is whether there is a genuine dispute of material fact over the causal connection between appellant's reports to the council and mayor and related action and her dismissal. Appellant's reports to the mayor, the city council, and the city auditors, occurred at various times between 2000 and 2003. Appellant ended the employee fuel discounts in June 2003. The satellite television company cancelled the allegedly fraudulent account in the fall of 2003, and she refused to deposit the refund check issued in October 2003. Appellant's employment was not terminated until March 2004. The lack of temporal proximity between appellant's actions and her discharge indicates that there was no causal connection. See Clark County Sch. Dist. v. Breeden, 532 U.S. 268, 273-74, 121 S. Ct. 1508, 1511(2001) (finding 20 months too long to establish causation); Minn. Ass'n of Nurse Anesthetists v. Unity Hosp., 59 F.3d 80, 83 (8th Cir. 1995) ("Long intervals between the conduct that is said to motivate an employer and the adverse employment decision complained of tend to undermine the inference that the discharge was retaliatory."); Ring v. Sears, Roebuck Co., 250 F. Supp. 2d 1130, 1136-37 (D. Minn. 2003) (finding that eight months was too long to show causal connection).
Appellant argues that the article in the Duluth newspaper on March 18, 2004, was printed very close in time to when she was terminated and provides a causal connection. But the statutorily-protected activities still occurred at least five or six months before the newspaper article was published. If the city council were concerned with appellant's reports about the improper activities, the council would have noted its concern in 2001, 2002, or 2003, and would not have given her a positive review in January 2004. Though the newspaper article may have included a discussion of the same complaints appellant reported to the city council, it does not follow that the newspaper article would cause the city council to discharge appellant for reports she had made up to three years earlier. We conclude that there is no genuine issue of material fact regarding whether there was a causal connection between appellant's termination and any reports to the city auditors, mayor, and city council.
Summary
Because we conclude there is a genuine issue of material fact as to whether appellant proved her prima facie case that she was terminated for refusing to violate the Data Practices Act, we reverse summary judgment on that issue and remand. But because we conclude that there are no genuine issues of material fact regarding whether appellant was terminated for participating in the OSA investigation or reporting to the OSA and whether appellant was terminated for reporting to the city auditors, mayor, or city council, we affirm the district court's grant of summary judgment on those issues.