Baker-Heser v. State, 963 N.W.2d 59

Background

Two senior Lincoln Regional Center (LRC) employees—Dr. Natalie Baker-Heser (medical director) and Stacey Werth-Sweeney (facility operating officer)—reported that two staff psychiatrists repeatedly failed to complete required patient medical records and otherwise violated recordkeeping/regulatory requirements.
DHHS retained attorney Grant Dugdale to conduct a rapid, agency-wide investigation; Dugdale prepared interview summaries and recommended leadership changes, including termination of Baker and Sweeney.
DHHS terminated Baker and Sweeney on June 12, 2018; the psychiatrists were terminated months later.
Baker and Sweeney sued DHHS alleging retaliation under the Nebraska Fair Employment Practice Act (NFEPA, § 48-1114) and wrongful retaliation under the Health Care Facility Licensure Act (HCFLA, § 71-445); they also sought a jury trial.
The district court granted DHHS summary judgment on the NFEPA claims, received investigative interview summaries over hearsay objections (as evidence of the employer’s state of mind), dismissed HCFLA claims for lack of a sovereign-immunity waiver, and struck the jury demand.
The Nebraska Supreme Court affirmed: plaintiffs failed to show protected activity under NFEPA and the HCFLA does not waive the State’s sovereign immunity.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs engaged in protected conduct under NFEPA (retaliation claim)	Plaintiffs argued their reports opposing psychiatrists’ unlawful practices (deficient recordkeeping violating state/federal law) were protected activity.	DHHS argued NFEPA protects opposition to unlawful practices of the employer, not opposition to coemployees’ unlawful acts; plaintiffs opposed coworkers, not DHHS.	Held: Plaintiffs did not engage in protected conduct under §48-1114 because they opposed coworkers’ actions, not an unlawful practice of the employer; summary judgment affirmed.
Whether investigative interview summaries were hearsay and inadmissible on summary judgment	Plaintiffs argued summaries were hearsay and not proper summary judgment evidence.	DHHS argued the summaries were admissible to show the investigator’s and employer’s state of mind and nonretaliatory reasons for termination.	Held: Admission affirmed—summaries were offered to show employer’s reliance/state of mind (not for truth), so not hearsay.
Whether HCFLA §71-445 waived State sovereign immunity allowing wrongful-termination suits against DHHS	Plaintiffs argued §71-445 (and related federal/state regulatory scheme) impliedly waived sovereign immunity permitting HCFLA claims against the State.	DHHS argued the State Tort Claims Act is the exclusive waiver mechanism and HCFLA contains no express waiver of sovereign immunity.	Held: No waiver—statutory waiver must be express or clearly implied; HCFLA does not waive sovereign immunity, so HCFLA claims dismissed.
Whether plaintiffs were entitled to a jury trial after pleading one	Plaintiffs asserted right to jury trial.	DHHS sought to strike the demand given statutory/sovereign-immunity and procedural rulings.	Held: Court did not reach separate jury-trial merits because no claims remained after summary judgment/dismissal.

Key Cases Cited

Wolfe v. Becton Dickinson & Co., 266 Neb. 53, 662 N.W.2d 599 (Neb. 2003) (NFEPA protects opposition to employer unlawful practices, not coworkers’ misconduct)
Bonn v. City of Omaha, 19 Neb. App. 874, 814 N.W.2d 114 (Neb. App. 2012) (applying Wolfe to municipal employer; practices opposed must be employer practices)
Edwards v. Douglas County, 308 Neb. 259, 953 N.W.2d 744 (Neb. 2021) (statutory waiver of sovereign immunity strictly construed; exclusive tort-claims scheme)
Haffke v. Signal 88, 306 Neb. 625, 947 N.W.2d 103 (Neb. 2020) (elements and standards for retaliation under NFEPA)
Wolff v. Brown, 128 F.3d 682 (8th Cir. 1997) (internal investigative reports relied on by employer are admissible to explain employer’s actions)
Carmona v. Resorts Int’l. Hotel, 189 N.J. 354, 915 A.2d 518 (N.J. 2007) (investigative report offered to show nonretaliatory reason is non-hearsay)