Becker v. Community Health Systems, Inc.
184 Wash. 2d 252
| Wash. | 2015Background
- Gregg Becker was Rockwood Clinic PS’s CFO after its acquisition by Community Health Systems (CHS) and prepared an EBIDTA projection showing a $12M loss.
- CHS allegedly pressured Becker to alter the EBIDTA to a $4M loss that CHS had reported to creditors; Becker refused, citing concerns about violating federal financial‑reporting laws.
- After refusing, Becker was given a poor performance rating, placed on a performance plan, told his job was in jeopardy, and then resigned (accepted by CHS the next day).
- Becker sued in state court for wrongful discharge in violation of public policy (and initially brought a SOX claim, later omitted); CHS removed then the case was remanded.
- CHS moved to dismiss under CR 12(b)(6), arguing statutory remedies (SOX and Dodd‑Frank) are adequate alternatives that preclude the tort; the trial court denied dismissal and the Court of Appeals affirmed on interlocutory review.
- The Washington Supreme Court affirmed, holding that the proper inquiry is whether statutory remedies are exclusive (not whether they are adequate), and that SOX/Dodd‑Frank do not bar Becker’s common‑law tort claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether alternative statutory remedies preclude the wrongful‑discharge tort (adequacy vs. exclusivity) | Becker: statutes are nonexclusive; common‑law tort may coexist with SOX/Dodd‑Frank | CHS: SOX/Dodd‑Frank provide adequate statutory remedies that should preclude the tort | Court: use exclusivity test; because statutes are not exclusive, tort claim survives |
| Whether Becker pleaded jeopardy element (refusal to commit illegal act) | Becker: refusal to falsify EBIDTA is refusal to commit an illegal act and thus fits wrongful‑discharge tort | CHS: existence of statutory remedies undermines jeopardy; claim should be dismissed | Court: allegations, taken as true, sufficiently plead refusal to commit an illegal act and jeopardy element |
| Whether Congressional nonpreemption language requires treating statutes as inadequate | Becker: Congress expressly said SOX/Dodd‑Frank supplement, supporting concurrent tort remedies | CHS: nonpreemption doesn’t mean statutes are inadequate; they still preclude tort if adequate | Court: defers to Congress’s choice to make remedies supplemental; nonpreemption supports coexistence |
| Whether allowing tort alongside SOX/Dodd‑Frank undermines statutory scheme | Becker: common law complements statutory protections; Congress can limit remedies if desired | CHS: permitting tort could encourage nonreporting and frustrate statutory goals | Court: policy concerns are for legislature/Congress; statutes expressly allow supplemental remedies, so tort remains available |
Key Cases Cited
- Rose v. Anderson Hay & Grain Co., 184 Wn.2d 268 (reformulating alternative‑remedies inquiry to exclusivity)
- Rickman v. Premera Blue Cross, 184 Wn.2d 300 (companion case addressing jeopardy/alternative remedies)
- Gardner v. Loomis Armored, Inc., 128 Wn.2d 931 (articulating wrongful‑discharge scenarios and Perritt factors)
- Korslund v. DynCorp Tri‑Cities Servs., Inc., 156 Wn.2d 168 (pre‑Rose precedent on adequacy of statutory remedies)
- Piel v. City of Federal Way, 177 Wn.2d 604 (analysis of statutory language on whether remedies are additional)
- Thompson v. St. Regis Paper Co., 102 Wn.2d 219 (clarity and burden‑shifting in wrongful‑discharge claims)
- Corrigal v. Ball & Dodd Funeral Home, Inc., 89 Wn.2d 959 (standard of review for motions to dismiss)