This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Becklund Home Health Care, Inc.,
Filed July 30, 2002
Affirmed in part, reversed in part, and remanded
Hennepin County District Court
File No. EM01002262
Stephen W. Cooper, Stacey R. Everson, The Cooper Law Firm, Chartered, 800 Ceresota Building, 155 Fifth Avenue South, Minneapolis, MN 55401 (for appellant)
Beth E. Bertelson, David J. Schaibley, Bertelson Law Office, P.A., 101 Union Plaza, 333 Washington Avenue North, Minneapolis, MN 55401 (for respondent)
Considered and decided by Kalitowski, Presiding Judge, Lansing, Judge, and Anderson, Judge.
G. BARRY ANDERSON, Judge
Respondent terminated appellant’s employment as a home-health aide. Appellant brought claims against respondent alleging racial and national origin discrimination and retaliation and reprisal, in violation of the Minnesota Human Rights Act. Appellant also brought a claim under Minn. Stat. § 181.932 (2000), Minnesota’s “whistleblower” statute. The district court granted respondent’s motion for summary judgment on all claims. We affirm in part, reverse in part, and remand.
In September 1993, appellant began to work for respondent as a home-health aide at “Elliot House” in Minneapolis. Elliot House is a home-care facility for vulnerable adults (residents). Appellant’s responsibilities included caring for several residents at Elliot House. During the first six years of his employment at Elliot House, respondent warned appellant several times for violating various company policies. Appellant’s violations included bringing his children to Elliot House, giving the residents’ telephone numbers to his friends, sleeping or appearing to sleep while on duty, and cleaning the home poorly. As of March 15, 1999, however, appellant did not have any ongoing disciplinary problems. On that date, appellant called the police to report his suspicions that a co-worker, who lived in the basement of Elliot House, was sexually abusing young children who would periodically stay in the co-worker’s apartment. The police later determined that the young children frequenting the co-worker’s basement apartment were family friends or relatives and had not been abused by the co-worker. An angry confrontation subsequently ensued between appellant and the co-worker after the co-worker was released from police custody. Appellant’s supervisors at Elliot House attempted to restore calm to the situation.
The next day, the mother of one of the Elliot House residents called Rhoda Becklund, respondent’s president, and notified her that the police had been called to Elliot House. The mother also stated that her daughter had told her that appellant had been verbally abusive, was failing to keep the home clean, was leaving the residents unsupervised, and was using the residents’ telephones to make personal telephone calls.
Between March 17 and March 24, respondent’s staff held several meetings to discuss appellant’s employment, including some meetings where appellant was present. On March 17, appellant met with Joni Oberg (staffing coordinator) and Shelley McDonald (a human-resources employee). Appellant alleges Oberg and McDonald asked him to transfer to a different location. Appellant, however, refused to leave Elliot House. Appellant also told Oberg and McDonald that the complaining resident once called him a “n----r” in 1996 or 1997. Appellant also claims he notified respondent of the epithet when it was made; respondent denies receiving notification of the incident. According to appellant, the resident never used the word again.
Respondent alleges that it offered appellant employment at different locations on several occasions between March 17 and 26, but appellant refused to work anywhere other than Elliot House. On March 26, respondent terminated appellant’s employment and noted that he was being discharged for violating its client bill of rights and for abusing or neglecting vulnerable adults. Eli Gomez, respondent’s human-resources director, stated that he terminated appellant’s employment because of several work-related concerns raised during the March meetings. Specifically, he noted that he terminated appellant’s employment because he slept on the job, used residents’ telephones, left residents unattended, allowed unauthorized people visit him at Elliot House while he worked, and because of certain cleanliness issues. Gomez stated that he and Shelley McDonald met with appellant on March 26 and discussed the issues surrounding his employment, although appellant claimed the meeting occurred because he had notified the police about the co-worker and not because of the work-related allegations.
After a request for reinstatement failed, appellant sued respondent in state district court alleging racial and national origin discrimination under both state and federal law. Appellant also alleged a violation of Minn. Stat. § 181.932, Minnesota’s whistleblower statute. Respondent removed the case to federal district court and that court granted respondent’s motion for summary judgment on appellant’s federal claims because appellant failed to exhaust his administrative remedies with the EEOC. The federal district court remanded appellant’s remaining state-law claims to state district court. Respondent moved for summary judgment on appellant’s remaining state-law claims and the district court granted respondent’s motion on all claims. This appeal followed.
On appeal from a summary judgment, this court must review the record to determine whether any genuine issues of material fact exist and whether the district court erred in applying the law.
Bersch v. Rgnonti & Assocs., Inc., 584 N.W.2d 783, 786 (Minn. App. 1998) (citation omitted), review denied (Minn. Dec. 15, 1998). The evidence in the record must be reviewed in the light most favorable to the party against whom summary judgment was granted. Hedglin v. City of Willmar, 582 N.W.2d 897, 898 (Minn. 1998); Rothmeier v. Inv. Advisers, Inc., 556 N.W.2d 590, 592 (Minn. App. 1996), review denied (Minn. Feb. 26, 1997). Summary judgment must be granted against a party who fails to establish an essential element of a claim, if the burden of proof rests with that party, because a failure to establish an essential element renders all other facts immaterial. Bersch, 584 N.W.2d at 786.
I. Minn. Stat. § 181.932
Appellant argues the district court erred when it granted summary judgment in favor of respondent on his whistleblower claim because the statute protects reports of suspected non-employment-related illegal activity by co-workers to law enforcement officials. Appellant also argues the termination of his employment constituted retaliatory conduct under the statute because it was an adverse employment action.
Statutory construction is a question of law, which we review de novo. Anderson-Johanningmeier v. Mid-Minnesota Women’s Ctr., Inc., 637 N.W.2d 270, 273 (Minn. 2002). We must interpret a statute to ascertain and effectuate legislative intent but we must not disregard the words of the statute if they are unambiguous. Id. Minn. Stat. § 181.932, subd. 1 (2000) provides:
An employer shall not discharge, discipline, threaten, otherwise discriminate against, or penalize an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment because * * * the employee, * * * in good faith, reports a violation or suspected violation of any federal or state law * * * to an employer or to any governmental body or law enforcement official * * * .
This section “clearly and unambiguously protects reports made of a violation of any federal or state law or rule” and “does not contain an explicit public policy requirement.” Anderson-Johanningmeier, 637 N.W.2d at 274 (quotation omitted).
Where direct evidence of unlawful discrimination is not present, claims under the whistleblower statute are evaluated using the McDonnell Douglas burden-shifting approach. Cokley v. City of Otsego, 623 N.W.2d 625, 630 (Minn. App. 2001), review denied (Minn. May 15, 2001); McGrath v. TCF Bank Sav. FSB, 502 N.W.2d 801, 806 (Minn. App. 1993), modified, 509 N.W.2d 365 (Minn. 1993).
[T]he employee has the initial burden to establish a prima facie case, and the burden of production then shifts to the employer to articulate a legitimate, non-retaliatory reason for its action, after which the employee may demonstrate that the employer’s articulated reasons are pretexual.
Cokley, 623 N.W.2d at 630 (citations omitted). To establish a prima facie case, an employee must demonstrate that (1) he engaged in statutorily protected activity; (2) his employer took adverse employment action against him; and (3) there is a causal connection between the two events. Id.
The district court concluded that the purpose of the whistleblower statute is to prevent employers from retaliating against employees who refuse to violate federal or state law or who report illegal activity by their employer. Because respondent did not engage in illegal activity, and because the co-worker’s suspected illegal activity occurred outside the scope of his duties at Elliot House, the court concluded the whistleblower statute did not protect appellant’s report. We disagree.
Because the statute does not expressly state that a statutorily protected report must implicate an employer’s wrongdoing, rather than that of a co-worker, we conclude the district court erred when it determined that appellant did not engage in a statutorily protected activity when he reported the co-worker’s suspected child abuse.
First, it is clear that the whistleblower statute not only protects reports of violations of federal or state law, but also protects reports of suspected violations of federal or state law, if the reports are made in good faith. Cox v. Crown CoCo, Inc., 544 N.W.2d 490, 496 (Minn. App. 1996); see also Obst v. Microtron, Inc., 614 N.W.2d 196, 200 (Minn. 2000) (“While there need not be an actual violation of law, the reported conduct must at least implicate a violation of law.” (citation omitted)).
Second, the statute does not confine its protected activity to reporting the conduct of an employer. The statute protects an employee’s report of a suspected violation of any state law to an employer or law enforcement official. Minn. Stat. § 181.932, subd. 1(a). The statute permits an employee to report a suspected violation of state law to his employer presumably to notify the employer of the suspected illegal activity of its employees. But a literal interpretation of the statute also indicates that a statutorily protected report may be made to a law enforcement official if either the employer itself is engaging in suspected illegal activity, or if the employer fails to take action to reign in its employees engaged in suspected illegal activity.
Finally, the supreme court has been adamant that the statute’s protections “are not limited to reports that implicate public policy.” Abraham v. County of Hennepin, 639 N.W.2d 342, 354 (Minn. 2002). Instead, a report is entitled to protection under the statute
so long as there is a federal or state law or rule adopted pursuant to law that is implicated by the employee’s complaint, the employee reported the violation or suspected violation in good faith, and the employee alleges facts that, if proven, would constitute a violation of law or rule adopted pursuant to law.
Id. at 355 (emphasis added) (citations omitted); see also Anderson-Johanningmeier, 637 N.W.2d at 276 (“Because [the statute] clearly and unambiguously protects reports made of a violation of any [law], we will not look beyond its text to search for an unexpressed public policy requirement.”).
Because appellant reported a suspected violation of state law (child abuse) to the police (law enforcement officials) in good faith, the statute protects his report and the district court erred when it concluded otherwise.
The district court also concluded that even if appellant engaged in statutorily protected activity by reporting the co-worker’s suspected child abuse, he failed to establish that respondent took adverse employment action against him because he was offered other employment with respondent at the same wage rate and hours.
We conclude the district court also erred when it determined that appellant failed to establish an adverse employment action because appellant’s employment was ultimately terminated. Moreover, there are genuine issues of material fact concerning the terms and conditions of the employment respondent allegedly offered appellant in lieu of his employment at Elliot House, and those unresolved issues preclude summary judgment.
In addition to establishing a statutorily protected activity, an employee must also show that he was discharged, disciplined, threatened, penalized, or otherwise discriminated against, in the compensation, terms, conditions, location, or privileges of his employment because he engaged in that activity. Minn. Stat. § 181.932, subd. 1. “Not everything that makes an employee unhappy is an actionable adverse employment action.” LaCroix v. Sears, Roebuck, & Co., 240 F.3d 688, 691 (8th Cir. 2001) (citation omitted). An adverse employment action can be shown where there is “a material employment disadvantage, such as a change in salary, benefits, or responsibilities.” Id. (citation omitted); see also Ludwig v. N.W. Airlines, Inc., 98 F. Supp. 2d 1057, 1069-70 (D. Minn. 2000). An employer, however, “cannot insulate itself from liability for discrimination merely by offering a transfer at the same salary and benefits.” Ledergerber v. Stangler, 122 F.3d 1142, 1144 n.2 (8th Cir. 1997) (citation omitted).
The district court assumed appellant did not suffer a materially adverse change in the terms and conditions of his employment because he refused to accept offers of employment at other locations without a diminution of salary, benefits, or title. The court also assumed appellant’s refusals to relocate were based on his desire to work close to his home and that this precluded a finding that respondent took adverse employment action against him.
The record, however, belies these assumptions when viewing the evidence in favor of appellant. For instance, appellant admitted in his deposition that respondent’s staff “asked to transfer me to a different location.” Eli Gomez stated, however, that although he offered appellant other positions with respondent before he terminated appellant’s employment, he admitted that appellant would have to “apply” for those positions. McDonald’s notes dated March 19, 1999, state that Oberg offered appellant hours at a different location but the notes do not specify the terms and conditions of the offer or whether the location was a similarly situated place of employment. McDonald’s notes dated March 26 state that she offered appellant an “office position.” Appellant, however, denied that he was ever offered an office position in lieu of his employment at Elliot House. The record is unclear regarding where these locations were and whether the terms and conditions of these employment offers were similar to appellant’s position at Elliot House.
Therefore, viewing the evidence in the light most favorable to appellant, there are remaining disputed materials facts, and facts that have not yet been sufficiently developed, to preclude summary judgment on this issue.
“[A]n employee may demonstrate a causal connection by circumstantial evidence that justifies an inference of retaliatory motive.” Cokley, 623 N.W.2d at 632 (citation omitted); see also Dietrich v. Canadian Pac. Ltd., 536 N.W.2d 319, 327 (Minn. 1995). The close proximity between a termination decision and a statutorily protected report may support an inference of reprisal in violation of the statute. Cokley, 623 N.W.2d at 633. Mere speculation, however, is not sufficient to justify an inference of a retaliatory motive. Id.
Respondent denies it terminated appellant’s employment on March 26, nine days after his police report, because appellant made the report. We conclude, however, that appellant has provided sufficient circumstantial evidence to justify an inference of a retaliatory motive. Consequently, appellant has provided sufficient circumstantial evidence to preclude summary judgment on this issue as well.
Respondent contends that it terminated appellant’s employment because of the allegations of verbal abuse and other work-related problems. These allegations, however, appear to have arisen either right before, or contemporaneously to, appellant’s police report. From this initial report, several meetings were held culminating in the termination of appellant’s employment. Oberg stated that at a March 19 meeting, four days after the report, she and McDonald told appellant that due to the concerns management had about Elliot House, they felt it was best that appellant not work there and they offered appellant employment at other locations until the matter was resolved. A March 17 memorandum from McDonald to her file, however, notes that “communication gaps at Elliot House [are] causing friction and bad feelings between caregivers.” Perhaps most troublesome for respondent is the affidavit of Frazier Brock, another co-worker, who alleges that on March 17 he overheard respondent’s staff discuss how appellant “had tarnished the reputation of the business by having the police come to” Elliot House.
Of course, there is other evidence in the record that suggests respondent discharged appellant for verbally abusing the residents and for other work-related concerns. And the efforts of counsel for appellant to minimize or ignore appellant’s troubled work history are disingenuous at best. But appellant has satisfied his initial burden of providing sufficient circumstantial evidence to justify an inference of a retaliatory motive and thus the district court’s grant of summary judgment in favor of respondent was premature. We therefore remand appellant’s whistleblower claim to the district court for a trial on the merits.
II. Disparate Treatment
Appellant argues the district court erred by granting respondent’s motion for summary judgment on his racial and national origin discrimination claims because, according to appellant, even the single use of the word “n----r” by one of the residents is actionable. Appellant argues respondent’s failure to take timely and appropriate action in response to his complaint that the word was directed at him makes respondent liable for the comment. This derogatory comment combined with his lower pay and reduced opportunity for promotion, according to appellant, suggests that he is entitled to damages.
The district court recognized that the comment was made years before respondent terminated appellant’s employment. The district court concluded that any claim based on the comment would be time barred by the Minnesota Human Rights Act’s one-year statute of limitations. It also noted that an isolated racial slur over the course of a six-year employment relationship could not form the basis of a disparate-treatment claim. The district court also concluded that appellant failed to present any evidence that similarly situated, non-minority employees were paid at a higher rate than he was paid. Because a plaintiff is required to present more than mere assertions that he was paid less than similarly situated employees, the court concluded that appellant had failed to establish a prima facie case of disparate treatment in salary.
We conclude the district court did not err when it granted summary judgment in favor of respondent on appellant’s various racial and national origin discrimination claims.
Minn. Stat. § 363.03, subd. 1(2)(c) (2000), prohibits an employer from discharging or otherwise discriminating against an employee “with respect to hiring, tenure, compensation, terms, upgrading, conditions, facilities, or privileges of employment” because of the person’s race or national origin. Claims under this section are also evaluated using the McDonnell Douglas burden-shifting approach. Hubbard v. United Press Int’l, Inc., 330 N.W.2d 428, 441-42 (Minn. 1983). But the requirements for establishing a “prima facie case vary from case to case and with each set of differing factual circumstances.” Danz v. Jones, 263 N.W.2d 395, 399 (Minn. 1978) (citation omitted).
A. Failure to Take Action
It is well-settled that the use of a racially derogative remark directed at an employee by an employer establishes a prima facie case of unequal treatment and coupled with other disparate treatment constitutes unlawful discrimination in violation of Minn. Stat. § 363.03. Lamb v. Village of Bagley, 310 N.W.2d 508, 511 (Minn. 1981).
An employer can also be liable under Minn. Stat. § 363.03 when its employees harass other employees in such a way that the harassment “impacts on the conditions of employment” and “the employer knew or should have known of the employees’ conduct alleged to constitute * * * harassment and fails to take timely and appropriate action.” Cont’l Can Co., Inc. v. State of Minnesota, 297 N.W.2d 241, 249 (Minn. 1980) (sexual harassment), abrogated by statute on other grounds, Cummings v. Koehnen, 568 N.W.2d 418, 423 n.6 (Minn. 1997). And in certain cases an employer may be liable
when it is aware that its employee is subject to * * * harassment by a non-employee, yet fails to take timely and appropriate action to protect its employee.
Costilla v. State, 571 N.W.2d 587, 592 (Minn. App. 1997) (sexual harassment of state employee forced to work closely with federal employee), review denied (Minn. Jan. 28, 1998).
An employer is not liable, however, when a co-worker directs a racial epithet at an employee and the employer takes timely and appropriate action against the co-worker which “shows that it discouraged discriminatory statements or actions by co-workers.” Minneapolis Police Dep’t v. Minneapolis Comm’n on Civil Rights, 402 N.W.2d 125, 131 (Minn. App. 1987) (citation omitted), aff’d, 425 N.W.2d 235 (Minn. 1988). In addition, Minn. Stat. § 363.03 “does not impose a duty on [an] employer to maintain a pristine working environment.” Cont’l Can Co., Inc., 297 N.W.2d at 249.
No Minnesota decision places a legal duty on employers to take immediate and appropriate action against its clients or customers when they direct one racial epithet against an employee; but even if such a duty exists, or should exist, we conclude that appellant’s claims must still fail. Appellant admitted in his deposition that he notified Kelly Rader (although Rader disputes this assertion) about the resident’s use of the word when it occurred, and subsequently the word was never used again. He stated, “They have a good track record. No one called me [the word] after that.” Moreover, when the allegation resurfaced on March 17, it is clear from the deposition testimony and documentary evidence that respondent’s staff immediately discussed appellant’s allegation with the Elliot House residents and informed them that such words were inappropriate. Respondent’s actions were responsible, immediate, and thorough. There is simply no evidence in the record that supports a claim for failure to take action.
B. Disparity in Salary
Minn. Stat. § 363.03, subd. 1(2)(c), prohibits an employer from discriminating against a person with respect to his compensation based on the person’s race or national origin. To establish a prima facie case of wage discrimination, a plaintiff must show that his employer pays different wages to similarly situated employees for equal work, the performance of which requires the same skill, effort, and responsibility, performed under similar working conditions. See Danz, 263 N.W.2d at 399-400 (wage discrimination based on sex).
Appellant stated in his deposition that he had been discriminated against because he received only a $.60 raise over the five and one-half years he worked for respondent but he “met some white guys that come there to work that are making $11.00 an hour who have worked there less time than me.” Respondent submitted salary-authorization forms that indicate appellant’s initial salary was $7.25 per hour; appellant received $.20 raises in September 1994, 1996, 1997, and August 1998, respectively.
We conclude that appellant’s wage-discrimination claims must also fail because the two workers he alleged were paid more than he was paid were not similarly situated employees. According to the unchallenged documentary evidence submitted by respondent, one employee began working for respondent in 1988. In 1993, five years later, he was paid $7.85 per hour as opposed to appellant’s starting hourly wage of $7.25 per hour. Respondent also promoted this employee to “team aide” in 1997. The other employee began working in 1997 when she was also promoted to “team aide.” Her employee salary review notes that she was paid $7.65 per hour in 1996, but that she had past experience with respondent’s company. It is clear, based on this documentary evidence, that these two employees were not similarly situated with appellant because they had different starting dates, job titles, and background experience.
We therefore conclude the district court did not err when it granted respondent’s motion for summary judgment on appellant’s various racial and national origin discrimination claims.
Affirmed in part, reversed in part, and remanded.
 In determining whether a report is made in good faith, we must examine the content of the report and the purpose of the report at the time the report is made. Obst v. Microtron, Inc., 614 N.W.2d 196, 202 (Minn. 2000). The crucial inquiry is whether the report was made to expose an illegality. Id. Generally, whether a report was made in good faith is a question of fact; but “this court may determine as a matter of law that certain conduct does not constitute a ‘report.’” Rothmeier, 556 N.W.2d at 593 (citation omitted). Respondent apparently concedes that appellant made the report in good faith.
 The district court relied on Larson v. New Richland Care Ctr., 538 N.W.2d 915, 921 n.5 (Minn. App. 1995), review granted (Minn. Dec. 20, 1995) and order granting review vacated (Minn. Mar. 4, 1997) for the proposition that the purpose of the “statute is to stop employers from retaliating against employees who refuse to violate the law or who report illegal conduct by their employer.” (Emphasis added.) This statement is dictum because Larson addressed the statute of limitations for bringing whistleblower claims.
 Respondent also argues that appellant could not have “blown the whistle” on the co-worker because he admitted that he notified respondent about the co-worker’s suspicious activity years before his termination. Appellant alleges he informed Kelly Rader, a staffing coordinator, in December 1997 and January 1998 about children “coming in and going” from the co-worker’s apartment. According to appellant, Rader responded, “whatever [the co-worker] is doing is his business as long as he’s not on duty.”
Appellant correctly points out that respondent did not argue this issue before the district court. Moreover, the supreme court has noted in dictum that an “employer’s previous knowledge might not lead to the conclusion that the employee lacked good faith in reporting.” Obst, 614 N.W.2d at 203 n.5. For instance,
there may be instances in which the employee, aware that the employer has knowledge of the alleged violation, in addition to reporting to the employer, also reports to a * * * law enforcement official.