may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Bonnie J. Bertagnoli,
Carlson Marketing Group, Inc.,
a New Jersey corporation,
Filed September 18, 1998
Reversed and remanded
Concurring specially, Short, Judge
Hennepin County District Court
File No. 9710969
Donald H. Nichols, Steven Andrew Smith, Nichols, Kaster & Anderson, 4644 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)
Gregory J. Stenmoe, Michael M. Jerstad, Briggs & Morgan, 2400 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Willis, Presiding Judge, Huspeni, Judge, and Short, Judge.
Appellant challenges the district court's grant of summary judgment against her, claiming that the court erred in concluding that (1) she had not made a "report" under the whistleblower act and (2) her employer's alleged conduct did not contravene clearly mandated public policy. We reverse and remand.
Appellant Bonnie Bertagnoli was an at-will employee for respondent Carlson Marketing Group, Inc., from approximately May 13, 1996, to April 12, 1997. Specifically, Bertagnoli worked as a project leader for Carlson's Customer Loyalty Group. During her employment, Bertagnoli worked on projects for Sprint, which had contracted with Carlson to provide reward systems to Sprint customers. Three groups at Carlson provided services for Sprint: (1) the Business Service Group (BSG); (2) the Consumer Service Group (CSG); and (3) the Partnership Marketing Group (PMG). In her affidavit in support of her memorandum opposing Carlson's motion for dismissal or summary judgment, Bertagnoli stated that
[w]ithin each of the three groups, work done on individual projects was constrained by the estimated number of hours determined by Carlson and approved by Sprint at the start of the project.
BSG and CSG were also limited to a specified number of maintenance hours per month for system breakdowns and maintenance. Bertagnoli claimed if Carlson actually devoted fewer hours than the limit to maintenance, the bill was to reflect the actual number of maintenance hours worked.
Bertagnoli alleges that in September 1996, she discovered that Carlson manipulated the number of hours Carlson employees worked on the Sprint accounts and fraudulently inflated Sprint's bills by:
a. Moving hours worked on projects that exceeded estimates to projects that had estimated hours remaining;
b. Moving hours worked on a non-billable COBOL computer system upgrade project to projects with billable hours remaining;
c. Hiding non-billable training hours in remaining maintenance hours and/or projects with billable hours remaining;
d. Hiding hours worked on projects that exceeded estimates in the remaining maintenance hours for the month;
e. Moving hours from the PMG project, which at the time was severely over the hours estimated; and
f. Changing reports to reflect the hours as manipulated rather than as they were actually worked.
Bertagnoli told her supervisor, Steve Miller, that she believed that Carlson's billing practices were illegal and unethical. Bertagnoli did not know whether Carlson was aware of or was directing these billing practices when she first discussed them with Miller. In response to Bertagnoli's concerns, Miller issued a memo to Carlson Operations requiring that any requests to move hours between groups must be put into writing and routed to Miller or Bertagnoli. Bertagnoli claims that although she was unable to stop the billing practices, she was able to limit the involvement of her group and keep a record of the parties who were responsible for initiating the shifting of hours. Bertagnoli alleges that Carlson continued its billing practices after she spoke with Miller, and she estimates that "the amount of fraud [she] had direct knowledge of constituted five hundred to seven hundred thousand dollars." Bertagnoli claims that she continued to notify Miller about her billing concerns, but he was unresponsive, and that she was publicly and privately berated for expressing her concerns.
On March 11, 1997, Carlson informed Bertagnoli that they had lost confidence in her and they were terminating her employment due to her poor work performance, which Carlson maintains was evident throughout Bertagnoli's employment. Carlson then (1) told Bertagnoli to take 30 days to find a new position either within Carlson or elsewhere; (2) removed her from her job duties; and (3) told her to focus 100% of her time on finding a new position.
Bertagnoli filed a complaint against Carlson on May 8, 1997, alleging that Carlson terminated her employment in violation of the whistleblower act because she "reported" to Carlson "violations of state and/or federal law." Carlson brought a motion of dismissal or for summary judgment, which the district court granted on December 11, 1997. This appeal followed.
Under the whistleblower act, an employer is prohibited from discharging an employee because the employee
in good faith, reports a violation or suspected violation of any federal or state law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official.
Minn. Stat. § 181.932, subd. 1(a) (Supp. 1997). To establish a prima facie case under the whistleblower act, an employee must show: (1) she engaged in statutorily protected conduct; (2) the employer took adverse action against her; and (3) there was a causal connection between the protected activity and the adverse action. Rothmeier v. Investment Advisers, Inc., 556 N.W.2d 590, 592 (Minn. App. 1996), review denied (Minn. Feb. 26, 1997).
1. Failure to Make Report
Bertagnoli contends that the district court erred in concluding that her discussions with her supervisor do not constitute a "report" under section 182.932, subdivision 1(a). Although whether a plaintiff made a report in good faith is a question of fact, whether conduct constitutes a report is a question of law, which this court reviews de novo. Id. at 593. The district court relied on Michaelson v. Minnesota Mining & Mfg. Co., 474 N.W.2d 174, 180 (Minn. App. 1991), aff'd mem., 479 N.W.2d 58 (Minn. 1992), and Rothmeier, 556 N.W.2d at 590, to support its conclusion that "Bertagnoli's discussions with Miller do not constitute a `report' for the purposes of" Minn. Stat. § 182.932, subd. 1(a).
The appellant in Michaelson worked as in-house counsel advising his employer on the law and giving recommendations on employment issues. 474 N.W.2d at 176-77. After receiving several unsatisfactory performance reviews, his employer assigned him to a different position, which the appellant alleged was a retaliatory act. Id. at 177. This court rejected the appellant's argument, holding that he failed to establish a prima facie case of retaliatory discharge for reasons including (1) that "he did not `report' conduct, but rather gave his supervisor feedback, based upon his legal analysis, regarding proposed business decisions" and (2) that "he did not report the alleged violations to any other outside authority." Id. at 180. Therefore the appellant did not make a report as contemplated by the whistleblower act.
In Rothmeier, the appellant conceded that he learned about his employer's suspected violation of the law from an internal memorandum that showed his supervisor and corporate counsel already were aware of the suspected violation and were investigating the issue. 556 N.W.2d at 593. This court concluded that because the employee knew that his employer was already aware of the potentially illegal conduct, the employee's "mere mention of that issue to [the employer] did not constitute a `report.'" Id.
Bertagnoli's statements to her supervisor that she believed Carlson's billing practices were illegal and unethical were not mere feedback and there is nothing in the record suggesting that when she first made those statements she knew Carlson management was already aware of the alleged illegal conduct. We therefore conclude that her actions constituted a report under the whistleblower act and that the district court erred in granting summary judgment on this ground.
2. Clear Mandate of Public Policy
Bertagnoli argues that the district court erred in relying on Vonch v. Carlson Cos., 439 N.W.2d 406, 407 (Minn. App. 1989), review denied (Minn. July 12, 1989), to conclude that that she must show the billing practices to which she objected implicate a clearly mandated public policy interest. Bertagnoli contends that Vonch "improperly" analyzed the appellant's claim under the common-law, public-policy exception for retaliatory discharge of an at-will employee rather than under the whistleblower act and that she "need not demonstrate the existence of a `clearly mandated public policy' or `public interest' to proceed against [Carlson] under the [whistleblower act]."
The whistleblower act provides that an employer cannot discharge an employee for reporting, in good faith, a violation or suspected violation of any federal or state law or rule. Minn. Stat. § 181.932, subd. 1(a). In Hedglin v. City of Willmar, No. C1-97-520, 1998 WL 469704 (Minn. Aug. 13, 1998), the Minnesota Supreme Court analyzed whether former firefighters were protected by the whistleblower act where they were dismissed after reporting falsified roll-call sheets and fire-call responses by drunken firefighters. The court held that
[t]here may be fact questions as to whether [several criminal statutes] were actually violated, but for purposes of the whistleblower statute, it is irrelevant whether there were any actual violations; the only requirement is that the reports of state law violations were made in good faith. See Minn. Stat. § 181.932, subd. 1(a). Because Hedglin's and Lundquist's reports of roll call sheet falsification and Grove's report of firefighters driving fire trucks while drunk implicate possible state law violations, we conclude that these reports are protected by the statute if they were made in good faith.
Id. at *7.
The supreme court also considered whether the common-law requirement that a clearly mandated public policy be implicated in an employee's report of wrongdoing still exists and is applicable to the whistleblower act. The court explicitly rejected the appellants' reliance on Vonch and Williams v. St. Paul Ramsey Med. Ctr., Inc., 551 N.W.2d 483 (Minn. 1996), for that proposition and stated that it would not read any additional requirement into the plain language of the whistleblower act. Hedglin, 1998 WL 469704 at *7. But the court also concluded that it did not need to decide whether the public policy requirement applies to the whistleblower statute because the reported conduct--drunk driving and falsification of roll-call sheets that implicated government or public funds--did implicate a clearly mandated public policy. Id. at *8.
The supreme court in Hedglin declined to read an additional requirement into the whistleblower act, and we decline to do so as well. Because the plain language of the whistleblower act does not require that a clearly mandated public policy be implicated in an employee's report of wrongdoing, the district court erred in granting summary judgment against Bertagnoli on the ground that she had not shown such a policy to be implicated in this case. But because of the grounds on which the district court granted summary judgment here, it made no determination of whether Bertagnoli's report was made in good faith or, for that matter, whether Bertagnoli reported a violation or suspected violation of a federal or state law or rule. Those issues must be addressed to determine whether Bertagnoli engaged in statutorily protected conduct.
Reversed and remanded.
SHORT, Judge (concurring specially).
I concur in the result only because it is disputed whether: (1) Bertagnoli is a "neutral" complaining in "good faith" about Carlson's billing practices; and (2) there is a nexus between the purported violation of law and public policy. See Minn. Stat. § 181.932, subd. 1(a) (1996) (stating employer shall not discharge employee who, in good faith, reports violation or suspected violation federal or state law or rule); Williams v. St. Paul Ramsey Med. Ctr., 551 N.W.2d 483, 484 n.1 (Minn. 1996) (noting title of "Whistleblower Act" connotes an action by neutral, one who "blows the whistle" for protection of others in addition to whistleblower); see generally James H. Kaster, Putting Public Policy Back into Minnesota's Whistleblower Statute, Hennepin Law., June 1998, at 4, 4-5 (discussing traditional public policy origins of whistleblower statutes).