HOUSE, APPELLEE, v. IACOVELLI ET AL., APPELLANTS.
No. 2018-0434
Supreme Court of Ohio
February 12, 2020
2020-Ohio-435
FISCHER, J.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as House v. Iacovelli, Slip Opinion No. 2020-Ohio-435.]
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2020-OHIO-435
HOUSE, APPELLEE, v. IACOVELLI ET AL., APPELLANTS.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as House v. Iacovelli, Slip Opinion No. 2020-Ohio-435.]
Torts—Wrongful termination in violation of public policy—Employee terminated after questioning employer‘s failure to accurately report earnings to Bureau of Unemployment Compensation—Employee failed to meet jeopardy element of claim for wrongful termination—
(No. 2018-0434—Submitted April 23, 2019—Decided February 12, 2020.)
APPEAL from the Court of Appeals for Medina County, No. 16CA0087-M, 2018-Ohio-443.
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{¶ 1} We accepted this discretionary appeal to address whether appellee, Christine House, can maintain a claim for wrongful termination in violation of public policy based upon an allegation that her employer unlawfully terminated her employment because she had confronted the employer for failing to report accurately her earnings to the Bureau of Unemployment Compensation as required by
I. Background
A. House‘s Employment
{¶ 2} House worked as an employee at the Riverstone Taverne, a restaurant operated
{¶ 3} House claimed that Iacovelli had underreported her income to the state. If her income was underreported, House would receive less unemployment compensation than what she would have been entitled to otherwise receive.
B. Trial-Court Proceedings
{¶ 4} House filed a complaint against Iacovelli for conversion, violations of the Fair Labor Standards Act,
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that the appellants’ conduct amounted to “a violation of Ohio public policy expressed or gleaned from statutes under
{¶ 5} After unsuccessfully moving to dismiss House‘s complaint, the appellants moved the trial court to determine whether House‘s claim met the elements of the tort of wrongful termination in violation of public policy. House opposed the motion.
{¶ 6} The trial court determined that House could not maintain her claim. The court determined that while there is a clear public policy manifested in the provisions of
C. Appellate-Court Proceeding
{¶ 7} House appealed the judgment of the trial court. She asserted that the trial court erred in dismissing her wrongful-termination-in-violation-of-public-policy claim on the theory that the jeopardy element was not met. The Ninth District sustained House‘s assignment of error and reversed the trial court‘s dismissal of her complaint.
{¶ 8} The Ninth District determined that the trial court erred by concluding that House could not satisfy the jeopardy element. The appellate court concluded
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that the statutory remedies contained in
{¶ 9} The Ninth District found that “[a]bsent adequate statutory remedies, House must be allowed to pursue a public policy wrongful termination claim in order to avoid fostering an environment where employees face the prospect of losing their jobs when they seek to obtain the benefits they have earned under the law.” 2018-Ohio-443, 94 N.E.3d 599, ¶ 19. The appellate court reasoned that a decision to the contrary might have a chilling effect on the willingness of employees to report such violations.
{¶ 10} We accepted the following proposition of law: “That in a wrongful termination action under Greeley v. Miami Valley [Maintenance Contrs.], 49 Ohio St. 3d 228 [552 N.E.2d 981] (1990), the jeopardy element is not met when statutes provide for the protection of the public policy, even when they provide no direct remedy for an employee herself.” 153 Ohio St.3d 1429, 2018-Ohio-2418, 100 N.E.3d 446.
A. Wrongful Termination in Violation of Public Policy
{¶ 11} The employment-at-will doctrine, the rule that general or indefinite hiring is terminable at the will of either party for any cause or no cause, is the traditional rule in Ohio. Collins v. Rizkana, 73 Ohio St.3d 65, 67-68, 652 N.E.2d 653 (1995). The tort of wrongful termination in violation of public policy, also known as a Greeley claim, is an exception to the employment-at-will doctrine. Greeley at 234.
{¶ 12} In order for a plaintiff to succeed on a wrongful-termination-in-violation-of-public-policy claim,
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a plaintiff must establish four elements: (1) that a clear public policy existed and was manifested either in a state or federal constitution, statute or administrative regulation or in the common law (“the clarity element“), (2) that dismissing employees under circumstances like those involved in the plaintiff‘s dismissal would jeopardize the public policy (“the jeopardy element“), (3) the plaintiff‘s dismissal was motivated by conduct related to the public policy (“the causation element“), and (4) the employer lacked an overriding legitimate business justification for the dismissal (“the overriding-justification element“).
Miracle v. Ohio Dept. of Veterans Servs., 157 Ohio St.3d 413, 2019-Ohio-3308, 137 N.E.3d 1110, ¶ 12; see Collins at 69-70. The clarity and jeopardy elements are questions of law to be determined by the court. Collins at 70. The causation and overriding-justification elements are, however, questions to be determined by the finder of fact. Id.
B. Clarity Element
{¶ 13} We note that neither House nor the appellants appealed the trial court‘s legal determination that House had met the clarity element. According to the trial court, there is a clear public policy, manifested in the provisions of
{¶ 14} While some may question whether the public policy identified by the trial court in this case is sufficient to establish the clarity element in light of this court‘s recent opinion in Miracle, we do not address that matter in this decision, because the issue is not before this court. Therefore, we presume the clarity element
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is satisfied and move on to the analysis of the jeopardy element of House‘s wrongful-discharge-in-violation-of-public-policy claim.
C. Jeopardy Element
{¶ 15} Under the jeopardy-element analysis, we determine whether dismissing employees under circumstances like those involved in House‘s dismissal would jeopardize the public policy expressed in
{¶ 16} The jeopardy-element analysis generally involves inquiring into the existence of any alternative means of promoting the particular public policy to be vindicated by a wrongful-termination-in-violation-of-public-policy claim. Wiles v. Medina Auto Parts, 96 Ohio St.3d 240, 2002-Ohio-3994, 773 N.E.2d 526, ¶ 15 (lead opinion). When the sole source of the public policy is a statutory scheme that provides rights and remedies for its breach, as it is here, we must consider whether those remedies are adequate to protect society‘s interest as to the public policy. Wiles at ¶ 15; see Collins at 73. It is less likely that a wrongful-termination-in-violation-of-public-policy claim is necessary when remedies for statutory violations are included in the statutory scheme. Id. at ¶ 15 (“there is no need to recognize a common-law-action for wrongful discharge if there already exists a statutory remedy that adequately protects society‘s interests“). This is especially true “when remedy provisions are an essential part of the statutes upon which the plaintiff depends for the public policy claim and when those remedies adequately protect society‘s interest by discouraging the wrongful conduct.” Leininger v. Pioneer Natl. Latex, 115 Ohio St.3d 311, 2007-Ohio-4921, 875 N.E.2d 36, ¶ 27.
{¶ 17} House‘s wrongful-termination-in-violation-of-public-policy claim was based on multiple provisions in
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{¶ 18} House argues that the remedies in
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should accurately report employees’ pay and tips to the Bureau of Unemployment Compensation.
{¶ 19} In addressing the jeopardy prong of the wrongful-termination-in-violation-of-public-policy tort, we have previously looked to see whether the statutory scheme contains a sufficient personal remedy for the aggrieved employee. See Leininger at ¶ 14, citing Livingston v. Hillside Rehab. Hosp., 79 Ohio St.3d 249, 680 N.E.2d 1220 (1997). However, in such instances, this court has focused only on the existence of a personal remedy for the employee in circumstances that involved public policies that protect substantial rights of the employee. See Wiles, 96 Ohio St.3d 240, 2002-Ohio-3994, 773 N.E.2d 526, at ¶ 17 (Family and Medical Leave Act,
{¶ 20} The public policy identified by the trial court in this case, uncontested by the parties, is not like the public policies that this court recognized in Kulch, Collins, Wiles, Leininger, and Bickers, which specifically protect employees. Instead, the public policy announced in this case protects a particular government interest: the accurate reporting of employees’ wages to the Bureau of Unemployment Compensation. The lack of a personal remedy in the statutory scheme does not jeopardize the policy because the remedies contained in the statute sufficiently protect society‘s interest and discourage employers from engaging in the prohibited behavior.
{¶ 21} But even assuming that we were to grant House‘s remedy and order the appellees to pay damages, or were to hypothetically order House‘s
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reinstatement, such a personal remedy may only discourage retaliation, i.e. termination, for confronting the appellants about their failure to accurately report her wages. A personal remedy may not, however, be sufficient to prevent the public policy from being jeopardized. The appellants could still decide not to pay into the unemployment-compensation fund, and the issue of the appellants’ failure to comply with
{¶ 22} While House may have sought to assert a claim based on a public policy protecting employees embodied in other statutes or administrative code sections, she did not raise any such claims. We must recognize that
{¶ 23} Therefore, we hold that the remedies in
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employees’ pay and tips to the Bureau of Unemployment Compensation and that the lack of a personal remedy for the employee does not jeopardize the public policy. We conclude that House‘s dismissal does not jeopardize the public policy identified by the trial court and that House cannot satisfy the jeopardy element of her wrongful-termination-in-violation-of-public-policy claim.
III. Conclusion
{¶ 24} We conclude that House has not met the jeopardy element of her wrongful-termination-in-violation-of-public-policy claim because the remedies in
Judgment reversed.
O‘CONNOR, C.J., and FRENCH and DEWINE, JJ., concur.
KENNEDY, J., concurs in judgment only.
STEWART, J., dissents, with an opinion joined by DONNELLY, J.
STEWART, J., dissenting.
{¶ 25} The majority concludes that the administrative remedies found in
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accurate and honest wage reporting without allowing a remedy for appellee, Christine House, and others like her, who may have been fired for reporting this kind of employer misconduct. I therefore dissent from the majority‘s conclusion that House cannot establish the jeopardy component of her claim for wrongful termination in violation of public policy.
I. An Individual Remedy for the Employee
{¶ 26} For an employee to engage in conduct that furthers a public policy—either by exercising one‘s right to engage in the policy (e.g., taking leave under the Family and Medical Leave Act (“FMLA“)) or objecting to an employer‘s violation of a policy (e.g., reporting violations under the Occupational Safety and Health Administration)—without the threat of retaliation discouraging that conduct, there must be a remedy available to the employee if an employer were to engage in a retaliatory discharge. See H. Perritt, Employee Dismissal Law and Practice, Section 7.07[A],
{¶ 27} The assertion by appellants, Bruce Iacovelli and Windward Enterprises, Inc., that the “jeopardy element is not met when statutes provide for the protection of the public policy, even when they provide no direct remedy for an employee herself,” is a dubious one. A statutory remedial scheme that does not
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provide any remedy to an aggrieved employee who was fired in contravention of a public policy would seem to fail, as a matter of course, to adequately protect the public policy.
{¶ 28} Indeed, until now, this court seemingly understood this concept. In the past, when examining whether statutory remedies adequately protected the public policy at issue, this court focused on the adequacy of the remedies available to the individual employee. See Leininger v. Pioneer Natl. Latex, 115 Ohio St.3d 311, 2007-Ohio-4921, 875 N.E.2d 36, ¶ 33 (holding that the “jeopardy element necessary to support a common-law claim is not satisfied, because
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available to employee when her employer did not employ the requisite number of employees required to be considered an “employer” within the meaning of the statute).
{¶ 29} The majority opinion distinguishes its decision in the present case from the past decisions cited above by
{¶ 30} Generally, governmental interests are those interests that impact the health, safety, and welfare of the community. State v. Cook, 83 Ohio St.3d 404, 417, 700 N.E.2d 570 (1998); see also Miami Cty. v. Dayton, 92 Ohio St. 215, 223, 110 N.E. 726 (1915). In order to protect these interests, governments promulgate laws prohibiting certain conduct found to be harmful to society. Often, criminal and regulatory laws do not provide substantive rights to any single individual but rather protect society at large. And although criminal and regulatory laws may discourage whatever conduct is prohibited by threatening the imposition of fines and other penalties, many do not provide a personal remedy to an employee who is fired for refusing to violate the law.
{¶ 31} Following the majority opinion to its logical conclusion would foreclose an employee who is fired for refusing to violate the law from bringing a common-law claim for wrongful termination in violation of public policy. This could jeopardize important public policies at the heart of a number of Ohio‘s laws even if those public policies do not necessarily protect the right of an individual employee.
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{¶ 32} For instance, imagine a scenario in which an employee of a chemical-manufacturing company is told by his supervisor to dump toxic waste in the Ohio River. Knowing that this would violate a number of criminal and environmental laws and could harm thousands of people, the employee refuses. If the employee is fired for refusing to comply with his supervisor‘s demand, according to the majority opinion, that employee would not be able to maintain a common-law wrongful-termination claim. When there is no private remedy for the wrongfully terminated employee, that employee, and others like him, are going to have a difficult choice to make—break the law or be fired for not breaking the law. When the employee has some recourse against his employer for the wrongful termination, this choice becomes much easier, and the employer might think twice before asking an employee to engage in illegal conduct in the first place. See Perritt, Employee Dismissal Law and Practice, Section 7.07[A], at 7-124 (“The central idea of the public policy tort is to create privately enforceable disincentives for private employers to use their power in the workplace to undermine important public policies“).
{¶ 33} It does not matter whether the public policy is intended to protect some right of the employee or is intended to protect a governmental interest, the same analysis applies to the jeopardy component—does the discharge of an employee under the circumstances alleged by a plaintiff jeopardize the public policy. See Collins, 73 Ohio St.3d at 70, 652 N.E.2d 653. Regardless of the type of public policy involved, one of the central questions underlying the jeopardy component is whether a privately enforceable remedy for the aggrieved employee is needed to adequately protect the public policy. When the source of the public policy is a statute that contains a remedy for a wrongfully terminated employee, recognizing a claim for wrongful termination in violation of
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employees exists within the statute when the public policy protects only a governmental interest. This assertion appears to be created to justify the majority‘s departure from this court‘s jeopardy analysis in prior decisions.
{¶ 34} However, even if the majority is correct in its assumption that this court treats public policies protecting governmental interests differently than those protecting employee rights, the majority has failed to sufficiently explain why the public policy at issue here does not involve the protection of an employee right. “The fund out of which unemployment compensation is paid to employees is represented entirely by compulsory contributions on the part of employers and is in effect a tax on the privilege of doing business in Ohio.” Leach v. Republic Steel Corp., 176 Ohio St. 221, 223, 199 N.E.2d 3 (1964). This court has explained that the purpose of the Ohio Unemployment Compensation Act,
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II. Inadequacy of Statutory Remedies
{¶ 35} Without an individual remedy for the discharged employee, the statutory remedies contained in
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{¶ 37} How the majority concludes that the provisions contained in
{¶ 38} In essence, because employee reporting in this instance is necessary for the effective enforcement of the public policy, employees must be protected from retaliatory discharge either by remedies contained in the statutory provisions or by remedies in a common-law tort claim for wrongful termination.
III. Application of the Majority Decision to the Facts of this Case
{¶ 39} As the majority notes, the jeopardy-element analysis requires the court to determine whether dismissing House under the circumstances involved in this case jeopardizes the public policy expressed in
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which House was dismissed would not jeopardize the public policy requiring employers to accurately report wage and tip earnings. But a simple application of the law to the alleged facts exposes the majority‘s error.
{¶ 40} House alleged in her complaint that she was terminated from her job as a waiter at the Riverstone Tavern, where she had worked for over seven years, for confronting Iacovelli, her boss, about underreporting her wage and tip earnings to the Ohio Unemployment Commission‘s Insurance Fund. If the allegation is true, Iacovelli‘s conduct violated
{¶ 41} According to the complaint, after House was terminated, Iacovelli contacted House and counseled her to misrepresent to the Bureau of Unemployment Compensation the true reason for her termination. Specifically, as alleged by House, Iacovelli
{¶ 42} These latter allegations are left out of the majority opinion. But they are extremely important because, to be eligible for unemployment benefits under the statute, employee-applicants cannot be found to have quit their employment without just cause or to have been terminated for just cause in connection with their work.
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{¶ 43} When considering these facts, it is unclear what the majority expected House to do. Had she kept silent about her employer‘s reporting violation, she would not have received her full unemployment benefits in the event of a no-fault termination. Had House lied to the Bureau of Unemployment Compensation by stating that she was terminated for lack of work, she would have committed a fraudulent misrepresentation in order to obtain benefits—an action that carries its own fines and penalties under
{¶ 44} If the facts in the complaint are true, House did everything right under the circumstances. Not only did she attempt to discourage unlawful behavior by confronting her employer about its reporting violations, but later, after being fired for her actions, she declined to engage in conduct akin to fraud and bribery even though her unemployed status and diminished capacity to collect unemployment benefits might have put pressure on her to do otherwise. In light of the circumstances in which House was dismissed, I find the majority‘s assurances that the administrative remedies in
DONNELLY, J., concurs in the foregoing opinion.
Michael T. Conway & Company and Michael Terrance Conway, for appellee.
The Bailey Law Firm and Steve C. Bailey, for appellants.
The Gittes Law Group, Frederick M. Gittes, and Jeffrey P. Vardaro, urging affirmance for amicus curiae Ohio Employment Lawyers Association.
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Willis Spangler Starling and Jason E. Starling, urging affirmance for amicus curiae Ohio Association for Justice.