Rickman v. Premera Blue Cross

184 Wash.2d 300

358 P.3d 1153

Ericka M. RICKMAN, Petitioner

v.PREMERA BLUE CROSS, Respondent.

No. 91040–5.

Supreme Court of Washington, En Banc.

Argued June 9, 2015.

Decided Sept. 17, 2015.

As Amended Nov. 23, 2015.

Joel Phillip Nichols, Deno Millikan Law Firm, PLLC, Everett, WA, for Petitioner.

Skylar Anne Sherwood, Robert Melvin Howie, Riddell Williams PS, Seattle, WA, for Respondent.

Bryan Patrick Harnetiaux, Attorney at Law, Bryan Harnetiaux, WA State Ass'n for Justice Foundation, Spokane, WA, George M. Ahrend, Ahrend Law Firm PLLC, Ephrata, WA, amicus counsel for Washington State Association for Justice Foundation.

Jeffrey Lowell Needle, Maynard Building, Lindsay L. Halm, Schroeter Goldmark Bender, Seattle, WA, amicus counsel for Washington Employment Lawyers Association.

Brian Trevor Hodges, Pacific Legal Foundation, Ethan Blevins, Attorney at Law, Bellevue, WA, amicus counsel for Pacific Legal Foundation.

Opinion

STEPHENS, J.

¶ 1 Plaintiff Ericka Rickman brought this suit against her former employer, Premera Blue Cross, for wrongful discharge in violation of public policy. Rickman alleges she was terminated in retaliation for raising concerns about potential violations of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), Pub. L. No. 104–191, 110 Stat. 1936, and its Washington counterpart, the Uniform Health Care Information Act (UHCIA), ch. 70.02 RCW. The trial court dismissed Rickman's suit on Premera's motion for summary judgment, concluding Rickman could not satisfy the jeopardy element of the tort because Premera's internal reporting system provides an adequate alternative means to promote the public policy. The Court of Appeals affirmed. Rickman v. Premera Blue Cross, noted at 183 Wash.App. 1015, 2014 WL 4347625 (2014).

¶ 2 We granted review of this case and two others in order to resolve confusion with respect to the jeopardy element of the tort of wrongful discharge in violation of public policy. Rickman v. Premera Blue Cross, 182 Wash.2d 1009, 343 P.3d 759 (2015) ; see also Becker v. Cmty. Health Sys., Inc., 182 Wash.2d 1009, 343 P.3d 759 (2015) ; Rose v. Anderson Hay & Grain Co., 182 Wash.2d 1009, 343 P.3d 759 (2015). Consistent with our decisions in Rose and Becker, we hold that nothing in Premera's internal reporting system, nor in HIPAA or its Washington counterpart UHCIA, precludes Rickman's claim of wrongful discharge. We reverse the Court of Appeals but remand for that court to address Premera's alternate argument for upholding the trial court's order of dismissal.

FACTS AND PROCEDURAL HISTORY

¶ 3 Ericka Rickman served as director of Ucentris Insured Solutions from August 2004 until her termination in November 2009. Ucentris, a subsidiary of Premera, is a general insurance agency that sells a variety of health care insurance plans and risk management products to individuals and businesses. Two distinct events transpired relevant to Rickman's termination.

HIPAA Concerns

¶ 4 In mid-September 2009, Rickman learned about a likely merger between Pacific Benefits Trust (PBT), a large association underwritten by Premera, and Washington Grocers Trust, another association underwritten by another insurer. As a result of the potential merger, Premera would lose PBT membership. Rickman confirmed the merger with Robin Hilleary, director of Premera's small business group. Rickman informed Hilleary that a Ucentris client asked a Ucentris “[c]aptive agent”¹ to look for non-Premera insurance in light of the merger. Clerk's Papers (CP) at 187. In response, Hilleary said Premera was putting together a strategy to retain membership and Rickman should advise Ucentris captive agents not to look elsewhere for insurance on behalf of clients. Hilleary told Rickman that Premera planned to use Ucentris captive agents to transfer the memberships of preferred groups from the merged associations into an association underwritten by Premera. Id.

¶ 5 Rickman had a “gut feeling” the proposed plan involved “risk bucketing,” i.e., separating riskier policy holders from less risky holders for underwriting, which she believed might violate HIPAA laws. CP at 271–72, 187. Rickman believed the plan could disclose private policyholder information. Rickman expressed her concerns to her supervisor, Rick Grover:

I met with Rick and I said, “Rick, I have a concern about a strategy that may be going on within Premera.” I explained I didn't know the details other than it had a potential utilization of our agents to move membership[,] and it had HIPAA written all over it. I couldn't say that was illegal because I don't know actually what's going to happen, but we did not want to be a part of it.

CP at 271. Rickman suggested to Grover the plan should be reviewed by a superior to determine its legality. Grover refused, noting that “we don't always tell everything to [the supervisor].” CP at 188. Rickman told Grover this is the way she had always done her business, but he said, “Well, there's a new Sheriff in town.”² Id. Later, Grover forwarded e-mails to Rickman that confirmed Premera was contemplating a risk bucketing plan, which Rickman believed would violate HIPAA. Rickman reported her concerns only to Grover and did not file a complaint with Premera's compliance and ethics department.

¶ 6 Several days after Rickman voiced her HIPAA concerns to Grover, he abandoned the risk bucketing plan, reasoning the plan favored Ucentris over Premera's other distribution channels. Premera's underwriting department later determined the risk bucketing plan was not illegal. However, in response to Rickman's interrogatories, Premera answered, “The group quickly determined that risk bucketing was not a lawful option for that particular situation.” CP at 67 (emphasis added).

Conflict of Interest Concerns

¶ 7 Rickman's son, Taylor Vidor, had been a captive agent for Ucentris since 2005, working as an independent contractor. Before Vidor was retained, Rickman disclosed her relationship with Vidor to her former supervisor, who approved hiring Vidor. According to Rickman, her former supervisor said Rickman did not need to make further disclosures because “ ‘[i]t's not an issue. He's a contractor.’ ” CP at 260. Rickman also disclosed her relationship to a former employee in human resources, but the employee never responded, and human resources has no record of the conversation. Rickman did not otherwise disclose her relationship in her annual conflict questionnaires, to her new supervisor Grover, or to the compliance and ethics department. Rickman testified that many other Premera employees have family members who work for or contract with Premera.

¶ 8 In 2008, Rickman approved the promotion of Vidor from a captive agent to a “[s]ubject [m]atter [e]xpert[ ]” (SME), at the recommendation of Ucentris managers. CP at 182–83, 261–62. Vidor received additional compensation as an SME. When another SME stepped down, Vidor assumed his workload and Rickman approved an increase in Vidor's commission from 5 to 10 percent, twice the amount some other SMEs received. Rickman did not consult with Premera or further disclose her potential conflict of interest.

¶ 9 On September 11, 2009, around the same time Rickman raised her HIPAA concerns, someone filed an anonymous complaint against Rickman with the compliance and ethics department, alleging a conflict of interest existed because of her son's involvement with Ucentris. The complaint highlighted that Rickman had elevated Vidor to an SME position, that Vidor had input on which captive agents received leads, and that the general feeling in the office was that befriending Vidor curried favor with Rickman.

¶ 10 Nancy Ferrara investigated the complaint and ultimately recommended Rickman be terminated. Ferrara concluded that Rickman's actions created the appearance of favoritism by condoning familial relationships at Premera and that Rickman did not properly disclose her relationship to compliance and ethics or human resources, especially before approving Vidor's SME promotion and increasing his commission. Ferrara also concluded Rickman exercised poor judgment and showed a lack of integrity because she was not forthcoming during the investigation. In her 2013 deposition, Ferrara later said she had no knowledge of Rickman's HIPAA concerns during the investigation or at the time of her recommendation. Grover stated he agreed with Ferrara's recommendation, and he terminated Rickman in November 2009. There is some question, however, whether Grover and Ferrara had different reasons for Rickman's termination.³

Procedural Background

¶ 11 In December 2010, Rickman filed suit against Premera in Snohomish County Superior Court, alleging Premera had wrongfully discharged her in violation of public policy. Premera moved for summary judgment, which the trial court granted. The court found the clarity element of the tort of wrongful discharge was readily established based on HIPAA and Washington's UHCIA. However, the court ruled that Rickman failed to identify a genuine issue of material fact existed as to the jeopardy and absence of justification elements of her claim. As to the jeopardy element, the court held that Rickman could not establish that other means of promoting the public policy were inadequate because Premera had a robust internal reporting system. Relying on Dicomes v. State, 113 Wash.2d 612, 782 P.2d 1002 (1989), the court further held that Rickman acted unreasonably by failing to apprise herself of the details of the “risk bucketing” plan to determine whether it was in fact illegal, and that public policy was not in jeopardy because Premera did not implement the plan.

¶ 12 As to absence of justification, the court found that Ferrara's recommendation to terminate Rickman was made without knowledge of Rickman's HIPAA concern. Therefore, the court reasoned Rickman failed to show a genuine issue of fact existed as to whether she was fired for raising HIPAA concerns. Rickman appealed.

¶ 13 The Court of Appeals affirmed. Rick...