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September 17, 2014
  Chavez-Lavagnino - Eight Circuit
Headline Eighth Circuit panel interprets Minnesota Whistleblower Act and common law in wrongful discharge case following jury verdict in favor of plaintiff employees

Area of Law Employment Law

Issue(s) Presented Whether the district court properly denied Defendants' motion for judgment as a matter of law after the trial on Plaintiffs' wrongful discharge claims, where jury awarded Plaintiffs lost wages, and district court awarded pre-judgment interest and attorneys fees.

Brief Summary Plaintiffs worked for Defendant Motivation Education Training, Inc. ("MET") and were supervised by Defendant Cerna. MET is a non-profit that provides services to migrant and seasonal farm workers, and receives funding from federal grants. To use federal funds, MET must ensure that the workers it assists meet certain eligibility requirements. MET also creates follow-up notes on the workers, which it uses in applying for additional federal grant money. During Plaintiffs' employment, Defendant Cerna ordered them to forge applicant signatures, shred tax documents, falsify follow up notes, and register unqualified applicants. After refusing to perform what they believed to be illegal activities, Plaintiffs were fired. Plaintiff Yanez was later given the opportunity to continue her employment, but declined.

Plaintiffs sued MET and Cerna, alleging violations of the Minnesota Whistleblower Act and Minnesota common law. The statute provides in relevant part that an employer "shall not discharge . . . [or] otherwise discriminate against" an employee because "the employee refuses an employer's order to perform an action that the employee has an objective basis in fact to believe violates any state or federal law . . . ." Similarly, under common law, "an employee may bring an action for wrongful discharge if that employee is discharged for refusing to participate in an activity that the employee, in good faith, believes violates any state or federal law." The case proceeded to trial, and a jury found Defendants' guilty of wrongful discharge. The district court denied Defendants' motion for judgment as a matter of law following the verdict. Defendants appealed the district court's order denying their motion for judgment as a matter of law, primarily arguing that Plaintiffs failed to prove a violation of either the Whistleblower Act or Minnesota common law.

A panel of the Eighth Circuit affirmed the district court's denial of Defendants' motion with respect to the claims against Defendant MET. The Court first held that Plaintiffs proved their "objective basis in fact" and "good faith" belief that Cerna's orders required them to break the law, as the ordered actions would violate statutes prohibiting defrauding the federal government. The Court also held that, with respect to Plaintiff Yanez, though she was offered her job back she met the implied materiality requirement of both the statute and common law. In so ruling, the Court looked to Title VII precedent, and determined that if faced with this issue the Minnesota Supreme Court would apply the Title VII materiality standard, which Plaintiff Yanez met in this case. Finally, the Court held that Plaintiffs had presented sufficient evidence of causation to support the jury's verdict, given the short timeframe between their refusal to follow illegal orders and their firing, and statements made by Cerna.

With respect to the verdict against Defendant Cerna, the Minnesota Supreme Court has never addressed whether a supervisor may be held liable for wrongful discharge. The Eighth Circuit noted that courts are divided on this issue, but held that the Minnesota Supreme Court would likely hold that a supervisor cannot be held personally liable for wrongful discharge, because a supervisor has no individual capacity to destroy the employment relationship without authorization from the employer. As such, the Court reversed the judgment against Defendant Cerna.

Finally, the Court determined that the motion for pre-judgment interest was untimely, and should have been rejected, but remanded for further consideration the question of attorneys fees in light of the Court's reversal of the judgment against Defendant Cerna.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/14/08/121058P.pdf

Panel Chief Judge Riley and Circuit Judges Colloton and Gruender

Date of Issued Opinion August 25, 2014

Decided Affirmed in part, reversed in part, and vacated and remanded in part

Docket Number 12-1058

Counsel Brian Emery Cote for Plaintiffs and Michael John Minenko for Defendants

Author Circuit Judge Colloton

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 09/17/2014 09:51 AM     8th Circuit  

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