McClusky v. City of N. Bend

549 P.3d 557

332 Or.App. 1

Will MCCLUSKY, Plaintiff-Appellant,

v.CITY OF NORTH BEND, an Incorporated City of the State of Oregon, Defendant-Respondent.

A177073

Court of Appeals of Oregon.

Argued and Submitted April 10, 2023

April 17, 2024

Coos County Circuit Court, 18CV20329; Andrew E. Combs, Judge.

Quinn E. Kuranz, Portland, argued the cause for appellant. Also on the briefs was The Office of Q.E. Kuranz, AAL, LLC.

Tracy M. McGovern, Medford, argued the cause for respondent. Also on the brief were Travis A. Merritt and Frohnmayer, Deatherage, Jamieson, Moore, Armosino & McGovern, P.C.

Before Ortega, Presiding Judge, Powers, Judge, and Hellman, Judge.

ORTEGA, P. J.

₃This case is before us for the second time on plaintiff’s appeal from a judgment dismissing his claims of unlawful employment discrimination and whistleblowing. Plaintiff assigns error to the trial court’s grant of summary judgment for defendant City of North Bend as to all four of his claims on various grounds.¹ We conclude that the trial court erred in granting summary judgment for defendant as to Claim 1 (ORS 659A.030(1)(f)), because there is a genuine issue of material fact as to whether plaintiff’s protected activity was a substantial factor in defendant’s decision to terminate his employment. We also conclude that the trial court erred in granting summary judgment for defendant as to Claim 2 (ORS 659A.199), because plaintiff’s conduct constituted a "report" of an alleged violation of state law within the meaning of ORS 659A.199 and there is a genuine issue of material fact as to plaintiff’s subjective good faith belief in making that report. We further conclude that, on this record, defendant may be liable as plaintiff’s joint employer under ORS 659A199 and that the coemployer’s alleged biased motive may be imputed to defendant under a "cat’s paw" theory. Finally, we conclude that the trial court did not err in granting summary judgment for defendant as to Claim 3 (ORS 659A.203(1)(b)(A), (B)) and Claim 4 (ORS 659A.203(1)(d)), because plaintiff failed to produce evidence that he reported illegal or other inappropriate conduct by defendant North Bend. We therefore reverse the judgment of dismissal as to Claims 1 and 2, remand for further proceedings, and otherwise affirm.

₄I. STANDARD OF REVIEW

The trial court must grant a motion for summary judgment when

"the pleadings, depositions, affidavits, declarations and admissions on file show that there is no genuine issue as to any material fact and that the moving party is entitled to prevail as a matter of law. * * * The adverse party has the burden of producing evidence on any issue raised in the motion as to which the adverse party would have the burden of persuasion at trial."

ORCP 47 C. No genuine issue of material fact exists when "no objectively reasonable juror could return a verdict for the adverse party on the matter that is the subject of the motion for summary judgment." Id. We review an order granting summary judgment for errors of law, viewing the facts and all reasonable inferences that may be drawn from them in favor of the nonmoving party, who in this case is plaintiff. Boyd v. Legacy Health, 318 Or App 87, 88-89, 507 P3d 715 (2022). We state the facts in accordance with that standard.

II. FACTS

We begin with the relevant undisputed facts recounted in our prior opinion:

"[T]his litigation arises from North Bend’s administrative involvement in plaintiff’s employment and termination as Technology Systems Manager for the Coos County Library Service District (CCLSD). The CCLSD is governed by a Master Plan, which was approved by the Coos County commissioners in 1992 and provides that each city retains control of daily library operations and is responsible for administering its own library services. The Master Plan mandates that shared library services (catalogues, databases, information technology services, outreach programs, etc.) are administered by the CCLSD Extended Services Office (ESO).

"To manage CCLSD activities, Coos County contracts through an intergovernmental agreement with the City of Coos Bay. Under that agreement, Coos Bay Public Library houses the ESO and employs the ESO Director. The director reports to the CCLSD Advisory Board, who is appointed by the Coos County Board of Commissioners.

₅"In support of the CCLSD, the cities of Coos Bay and North Bend entered into an intergovernmental agreement. Under the terms of that agreement, North Bend agreed to hire the CCLSD Technology [Systems] Manager and house that position in the City of North Bend’s public library. The City of Coos Bay reimbursed North Bend for 100 percent of those costs (salary, benefits, and office overhead costs) using the ESO budget."

McClusky v. City of North Bend, 308 Or App 138, 139-40, 481 P.3d 431 (2020), rev. den., 368 Or. 37, 484 P.3d 1071 (2021) (McClusky I).

North Bend hired plaintiff as CCLSD Technology Systems Manager in 2015. North Bend managers and human resources representatives worked with CCLSD employees, including the ESO director, to evaluate and supervise plaintiff. In April 2017, plaintiff received approval from the CCLSD Advisory Board to purchase an email server with budget funds. Minutes from that meeting also show that Jennifer Croft was set to start as the CCLSD ESO director later that month.

In June, Croft sent a memo to Coos County library directors and plaintiff announcing her plan to migrate CCLSD’s network to G Suite, a cloud-based service by Google that provides email hosting, among other networking applications. The migration meant abandoning plaintiff’s plan to purchase an inhouse email server and contracting with third parties to provide services on an ongoing basis. In July, plaintiff attended an IT meeting with Croft, North Bend Library Director Gary Sharp, North Bend Human Resources (HR) Manager and City Recorder Rene Collins, and another IT employee, who openly recorded the meeting. During the meeting, plaintiff expressed concerns to Croft about implementation of the G Suite migration and asked Croft if she had sought the approval of the CCLSD Advisory Board for the migration. Croft responded that she had called the board chair and had sent out emails to inform the board of her plan—which she maintained was within the scope of her authority—but confirmed that "we did not have an official meeting." Plaintiff expressed his view that, "according to the Master Plan and bylaws, this stuff is supposed to go up to the board in an official meeting to be talked about and approved before moving forward on it" and that Croft was ₆"bypassing * * * the laws of the district." Croft proceeded with the plan to migrate to G Suite with an initial launch on July 31.

In mid-August, what the parties refer to as "the Big Book of IT incident" occurred. "The Big Book of IT" is a binder that contains extensive information about CCLSD computer network and IT infrastructure. Croft directed plaintiff to turn over the Big Book of IT so that she could give it to an outside contractor she had hired to perform work on CCLSD systems in the following weeks while plaintiff was out of the office. Plaintiff was working onsite at the Bandon library and initially agreed to drop off the book to Croft when he returned to Coos Bay. Later that afternoon, however, plaintiff sent a text message to Croft, informing her that he would not be handing over the Big Book of IT and that she would need to first seek approval from the CCLSD Advisory Board. Plaintiff then contacted two library directors to inform them of the risks of giving an outside contractor the highest levels of access to CCLSD’s servers, service accounts, and patron information. Croft and Collins, the North Bend HR manager, together called plaintiff and told him that, if he did not have the book on Croft’s desk by 6:00 p.m., he would face disciplinary action. Plaintiff complied and then went on leave until September 5.

On August 25, plaintiff filed a complaint with the Bureau of Labor and Industries (BOLI) alleging, among other things, that he had complained to Sharp and other library directors about a lack of policies for his position, misappropriation of budget funds, and violations of record retention rules, and that North Bend had retaliated against him by changing his duties, taking control of the IT department, and making changes without communicating them.

On August 29, Croft emailed Sharp her proposed edits on plaintiff’s drafted employee performance review. The draft review, dated September 5, meant to be signed by Croft, Sharp, and plaintiff, included a "Work Improvement Plan" in which plaintiff’s work would be "closely monitored" for 90 days and required him to demonstrate "immediate and sustained improvement" in specific areas.

₇On September 1, North Bend received a copy of plaintiff’s August 25 BOLI complaint. That same day, North Bend also received a letter from an attorney on behalf of plaintiff providing notice of his BOLI complaint and warning that "any further action taken against [plaintiff would] be considered as retaliation for his legitimate complaints" constituting whistleblowing, even if the BOLI complaint was ultimately deemed unfounded.

When plaintiff returned to work on September 5, he received a "Notice of Potential Termination" signed by North Bend City Administrator Terrence O’Connor, Croft, and Sharp. The notice stated that plaintiff’s conduct surrounding the Big Book of IT incident "violates the City of North Bend employment policies and falls well below the expectations that we have for the IT Manager position." Plaintiff submitted a written response, outlining his version of the events surrounding the Big Book of IT incident.

Croft recommended that North Bend terminate plaintiff, and, on September 6, O’Connor issued a "Notice of Termination" on North Bend letterhead, in which he explained that plaintiff had failed to show that he under-stood how his conduct was improper or provide a reason to believe that he would be...