Marshall v. Montaplast of N. Am., Inc.

575 S.W.3d 650

Debra MARSHALL, Appellant

v.MONTAPLAST OF NORTH AMERICA, INC., Appellee

2018-SC-000260-DG

Supreme Court of Kentucky.

JUNE 13, 2019

COUNSEL FOR APPELLANT: Joshua Stephen Harp, Frankfort, Baughman Harp, PLLC.

COUNSEL FOR APPELLEE: Oliver Barrett Rutherford, Louisville, Smith & Smith Attorneys.

OPINION OF THE COURT BY JUSTICE KELLER

Appellant, Debra Marshall, appeals from an order of the Franklin County Circuit Court granting a motion to dismiss for failure to state a claim in favor of Appellee, Montaplast of North America, Inc. The Court of Appeals affirmed the circuit court. We affirm the decision of the Court of Appeals.

I. BACKGROUND

Debra Marshall began employment with Montaplast of North America, Inc. (Montaplast) on October 19, 1998. She was an at-will employee and did not have an employment contract. On January 29, 2015, Marshall accurately informed some of her coworkers that one of their supervisors was a registered sex offender. On February 3, 2015, after approximately 16 years of employment, Marshall was terminated by Montaplast. On March 20, 2015, Marshall filed a complaint in Franklin Circuit Court alleging wrongful discharge in violation of public policy. She asserted that she was terminated in retaliation for informing other workers that one of their supervisors was a registered sex offender, or at the very least that this was a substantial motivating factor in her termination. She claimed that the Kentucky Sex Offender Registration Act establishes a public policy that the sex offender registry should be open and accessible to everyone. Prior to even filing an answer, Montaplast filed a motion to dismiss the complaint under CR¹ 12.02(f) for failure to state a claim as a matter of law. Montaplast argued that even if Marshall was terminated for her conversation about the supervisor, this conversation was not protected under Kentucky public policy. The Franklin Circuit Court granted Montaplast’s motion to dismiss. The Court of Appeals affirmed the Franklin Circuit Court. This Court granted discretionary review.

II. ANALYSIS

In ruling on a motion to dismiss for failure to state a claim under CR 12.02(f), the trial court should take all of the allegations in the complaint as true. Morgan v. Bird, 289 S.W.3d 222, 226 (Ky. App. 2009). "[A] court should not dismiss an action for failure to state a claim unless the pleading party appears not to be entitled to relief under any set of facts which could be proven in support of his claim." Id. The trial court is not required to make any findings of fact, and the question is purely a matter of law. Fox v. Grayson, 317 S.W.3d 1 (Ky. 2010). "Accordingly, the trial court's decision will be reviewed de novo " Morgan , 289 S.W.3d at 226.

Ordinarily, an at-will employee may be discharged "for good cause, for no cause, or for a cause that some might view as morally indefensible.". Firestone Textile Co. Div. v. Meadows , 666 S.W.2d 730, 731 (Ky. 1983) (citing Production Oil Co. v. Johnson, 313 S.W.2d 411 (Ky. 1958) ; Scroghan v. Kraftco Corp., 551 S.W.2d 811 (Ky. App. 1977) ). However, there is "a narrow public policy exception" to the terminable-at-will doctrine, which is subject to the following limitations:

1) The discharge must be contrary to a fundamental and well-defined public policy as evidenced by existing law.

2) That policy must be evidenced by a constitutional or statutory provision.

3) The decision of whether the public policy asserted meets these criteria is a question of law for the court to decide, not a question of fact.

Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky. 1985). See also Firestone, 666 S.W.2d at 731 (quoting Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834, 835 (1983) ). Only three circumstances exist in which a discharge will be actionable as contrary to public policy: (1) when there are "explicit legislative statements prohibiting the discharge," (2) when "the alleged reason for the discharge ... was the employee's failure or refusal to violate a law in the course of employment," or (3) when "the reason for the discharge was the employee's exercise of a right conferred by well-established legislative enactment." Hill v. Kentucky Lottery Corp., 327 S.W.3d 412, 422 (Ky. 2010) (quoting Grzyb, 700 S.W.2d at 402 ). Further, the public policy involved must have an employment-related nexus. Grzyb, 700 S.W.2d at 402.

In this case, Marshall asserts that she was terminated because of her "exercise of a right conferred by well-established legislative enactment," which was in contravention of public policy. She argues that the Sex Offender Registration Act found in KRS² 17.500 et seq. provides the public policy of protecting the public from registered sex offenders and sexual predators. She argues that a right to disseminate the information from the registry is evidenced by the entire Sex Offender Registration Act, but in particular by KRS 17.510 and KRS 17.580.³ KRS 17.510(8) states, "The registration form shall be a written statement signed by the person which shall include registrant information, including an up-to-date photograph of the registrant for public dissemination " (emphasis added). KRS 17.580(4)(b) states, "Any person, including an employee of a sheriff’s office, acting in good faith in disseminating, or not disseminating, information previously disseminated by the Department of Kentucky State Police shall be immune from criminal and civil liability for the dissemination or lack thereof." The question here is whether the strong public policy of protection of the public, combined with the statute’s stated purpose of dissemination of registrant information and an immunity from civil and criminal liability, creates a right to disseminate this information in a private workplace, such that a termination of employment for exercising that right is contrary to public policy.

A thorough review of this Court’s precedent regarding the public policy exception to the terminable-at-will doctrine is necessary for analyzing Marshall’s claim. We will begin this review with the 1977 case of Pari-Mutuel Clerks' Union v. Kentucky Jockey Club, 551 S.W.2d 801 (Ky. 1977). In Pari-Mutuel, an employee was terminated for authorizing a labor union to represent him for the purpose of collective bargaining. The statute at issue in that case stated in relevant part, "Employes [sic] may, free from restraint or coercion by the employers or their agents, associate collectively for self-organization and designate collectively representatives of their own choosing to negotiate the terms and conditions of their employment to effectively promote their own rights and general welfare." Id. at 801-02 n.1, (quoting KRS 336.130 ). We reversed the circuit court’s granting of a motion to dismiss for failure to state a claim, thereby recognizing a cause of action based on the public policy implicit in an act of the legislature - in that case, the statute governing the rights of workers to organize for purposes of collective bargaining.

The next case this Court decided regarding the public policy exception to the terminable-at-will doctrine has become one of the seminal cases in this area of the law - Firestone. In Firestone, an employee was terminated for pursuing a workers' compensation claim against the employer. In that case, we stated that the Workers' Compensation Act evidenced "a public policy that an employee has a right to be free to assert a lawful claim for benefits without suffering retaliatory discharge." 666 S.W.2d at 732. We formally adopted a rule found in the Wisconsin case of Brockmeyer v. Dun & Bradstreet to govern the narrow public policy exception to the terminable-at-will doctrine:

(A)n employee has a cause of action for wrongful discharge when the discharge is contrary to a fundamental and well-defined public policy as evidenced by existing law.... The public policy must be evidenced by a constitutional or statutory provision. An employee cannot be fired for refusing to violate the constitution or a statute. Employers will be held liable for those terminations that effectuate an unlawful end.

Firestone at 666 S.W.2d at 731 (quoting Brockmeyer, 113 Wis.2d 561, 335 N.W.2d 834, 840 (1983) ). This limitation placed on the public policy exception continues to govern the subject.

Two years later, in Grzyb v. Evans, this Court clarified the rule laid down in Firestone . 700 S.W.2d 399 (Ky. 1985). We adopted a caveat from the Michigan Supreme Court:

[O]nly two situations exist where "grounds for discharging an employee are so contrary to public policy as to be actionable" absent "explicit legislative statements prohibiting the discharge." First, "where the alleged reason for the discharge of the employee was the failure or refusal to violate a law in the course of employment." Second, "when the reason for a discharge was the employee's exercise of a right conferred by well-established legislative enactment."

Id. at 402 (quoting Suchodolski v. Michigan Consolidated Gas Co., 412 Mich. 692, 316 N.W.2d 710 (1982) ) (internal citations omitted). Grzyb is also the first of our cases to discuss what has become known as the "employment-related nexus" requirement. In discussing Pari-Mutuel and Firestone, we stated, "Both cases involved public policy which was clearly defined by statute and directed at providing statutory protection to the worker in his employment situation." Id. at 400. We went on to state that "the concept of an employment-related nexus is critical to the creation of a ‘clearly defined’ and ‘suitably controlled’ cause of action for wrongful discharge." Id. at 402.

This Court next addressed the public policy exception to the terminable-at-will doctrine in 1992 in the case of Boykins v. Housing Authority of Louisville, 842 S.W.2d 527 (Ky. 1992). In that case we reiterated the employment-related nexus requirement when we held that the "open courts" provision of the Kentucky Constitution neither evidenced a "fundamental and well-defined public policy,"...