Chappell v. Southern Maryland Hospital, Inc.

MURPHY, Chief Judge. In Adler v. American Standard Corp., 291 Md. 31, 47 , 432 A.2d 464 (1981), we recognized that a tort action for abusive or wrongful discharge of an at-will employee could in a proper case arise in Maryland “when the motivation for the discharge contravenes some clear mandate of public policy.” The case now before us involves an action filed by Robert L. Chappell against the Southern Maryland Hospital (SMH) to recover compensatory and punitive damages for his alleged “unjust discharge” from employment as Director of Personnel at SMH. The complaint was filed on November 23, 1988 in the Circuit Court for Prince George’s County. It recited that Chappell was employed by SMH on an at-will basis from July 24,1984 to December 17,1985; that he was responsible for implementing all employment-related policies of SMH; that Francis Chiaramonte was Chief Executive Officer and Sebastian Suriani was Chief Operating Officer at SMH; and that during his employment, he discovered personnel prac ⁴⁸⁶ tices, which he believed to be unlawful under state and federal employment laws.

Specifically, Chappell alleged in his complaint that a black male housekeeping supervisor was sexually harassing several of his black female employees, that SMH was violating state and federal wage and hour laws, and that racially discriminatory practices existed in the employment of blacks at SMH. The complaint further stated that Chappell “on numerous occasions, utilizing the chain of command within the Hospital, attempted to advise the top management of the hospital, including Francis Chiaramonte and Sebastian Suriani, as to these illegal practices and policies”; that “after diligent efforts on his part to apprise top management of the problems, to suggest solutions, and to correct the illegal discriminatory practices and violations of public policies which existed, no action was taken”; that, thereafter, he proceeded to document in memorandum form the serious violations within the hospital and sent these memoranda directly to Suriani and Chiaramonte; that following his “exposure” of these practices to both Suriani and Chiaramonte it became clear to him “that he was being set up for dismissal from the Hospital”; that he was advised by his immediate supervisor “that it appeared that he would be set up for termination as a result of the action on his part”; that hé (Chappell) “discussed these problems with counsel for the Hospital on several occasions and was advised that his assessment of the situation was correct, but that it was doubtful that any action would be taken”; that he was “wrongly accused” by Suriani and Chiaramonte “of activities on his part”; and “was also being criticized for things which either were untrue or which had never been a basis for criticism in the past.” The complaint further alleged that on December 17, 1985, Chappell’s employment with SMH was terminated; that prior to his termination, he was not advised that his job was in jeopardy, nor was he advised “that he was conducting himself in a fashion which was unacceptable to the Hospital”; that “in August 1985, just four months prior to his termination, he received an excellent evaluation with mini ⁴⁸⁷ mal criticisms of his performance”; and that “at the time of his termination, he was not advised as to any reason why he was being terminated.” Chappell alleged that his discharge was wrongful in that it was caused by “his insistence that the Hospital abide by the clear letter and spirit of the laws of the United States and the State of Maryland, particularly, that the Hospital must cease its policy of discriminating against Blacks in its hiring, that the Hospital must fully investigate and cease the sexual harassment situation which existed toward female employees within the Hospital, and that the Hospital must cease its illegal policy regarding wage and hour laws.” Chappell claimed damages, compensatory and punitive, in the total amount of $600,000. SMH moved to dismiss Chappell’s complaint under Maryland Rule 2-322 for failure to state a claim upon which relief could be granted. In a supporting memorandum, SMH conceded that employment discrimination on the basis of race, and violations of state and federal wage and hour laws, may contravene the public policy of this State.

But it did not follow, SMH maintained, that Chappell’s discharge from his employment for bringing these alleged violations to the attention of upper management also violated the state’s public policy, warranting a tort action under Adler for wrongful discharge. SMH recited that Adler concerned an at-will management employee whose tort complaint was that he was discharged as a result of his effort to inform upper management of various violations of the criminal laws of Maryland, i.e., corporate improprieties, including commercial bribery, falsification of corporate records and financial data. While acknowledging that Adler sanctioned a tort action for wrongful discharge in a proper case, SMH argued that our holding in that case was that Adler’s complaint did not state a cause of action because he failed to sufficiently allege that his discharge violated any legislative enactment, judicial decisions or state regulations; and hence did not constitute a violation of the state’s public policy. SMH further alleged, in support of its motion to dismiss, that Chappell’s complaint asserted no more than ⁴⁸⁸ that the hospital was displeased that Chappell, as a management employee, would raise allegations of unlawful conduct by the hospital and therefore discharged him.

A discharge for this reason, SMH argued, did not contravene any specific provision of Maryland public policy and consequently would not support a tort action for wrongful discharge. As a separate ground for dismissal of Chappell’s complaint, SMH contended that a tort action for wrongful discharge could in no event be brought because exclusive statutory remedies existed to vindicate the violations of Maryland public policy alleged in Chappell’s complaint. As to the racial discrimination allegations, SMH pointed to the Maryland Fair Employment Practices Law which prohibits employment discrimination based upon sex and race, Maryland Code (1957, 1986 Repl.Vol.), Article 49B, §§ 14-18. As to the alleged wage and hour violations, SMH noted that they are proscribed by the Maryland Minimum Wage Act, Code (1957, 1985 Repl.Vol.), Article 100, §§ 81-93A.

In particular, SMH claimed that Chappell, as a management employee, was specifically excluded by § 82(e)(2) from the protections afforded by the statute and therefore no public policy considerations were implicated as to this component of Chappell’s complaint. Thus, SMH suggested that because Chappell was excluded from the statute’s coverage, his discharge did not violate any provision of Maryland public policy. At a hearing, on June 21, 1989, the court (Ahalt, J.) granted SMH’s motion to dismiss. In concluding that the facts alleged in Chappell’s complaint “do not fall within the four corners of Adler,” the court said it adopted the “reason set forth in the Defendant’s memorandum.” Upon Chappell’s appeal to the Court of Special Appeals, we granted certiorari prior to argument in that court to consider the important issues raised in the case.

I. Our recognition of the tort of wrongful discharge in Adler was predicated on the discharge of an at-will employ ⁴⁸⁹ ee, in contravention of some clear mandate of the public policy of Maryland, for refusal “to act in an unlawful manner or [because the employee] attempted to perform a statutorily prescribed duty.” 291 Md. at 42 , 432 A.2d 464 . We said that the determination whether the discharge was tortious or legally permissible “depends in large part on whether the public policy allegedly violated is sufficiently clear to provide the basis for a tort ... action.” Id. As to this, we indicated that the declaration of the public policy of the state is normally the function of the legislative branch, although public policy may also be found in prior judicial decisions or administrative regulations. Adler, an assistant general manager of a corporation’s commercial printing division, alleged in his tort suit for wrongful discharge that he uncovered illegal practices regarding his employer’s accounting and tax reporting, in addition to commercial bribery.

He further alleged that he disclosed these observations to his supervisor and made recommendations respecting their correction. Thereafter, the employee said he was discharged for what he believed was an improperly motivated action precipitated by his refusal to conceal or participate in the corporation’s alleged illegal practices. Accepting these averments of the complaint as being true, we determined that they were too vague and conclusory to state a cause of action for wrongful discharge because they failed to provide “a sufficient factual predicate for determining whether any declared mandate of public policy was violated.” Id. at 46 , 432 A.2d 464 . Specifically, we noted that Adler did not identify statutory provisions that particularly prohibited the claimed misconduct in violation of the state’s public policy.

Makovi v. Sherwin-Williams Co., 316 Md. 603 , 561 A.2d 179 (1989), decided eight years after Adler , and a month after the circuit court’s judgment in the present case, involved an at-will employee at a paint factory. Within a two-month period of discovering that she was pregnant, she was discharged. Her employer stated that “ ‘she could not work at her job as long as she was pregnant’ and ‘that her ⁴⁹⁰ pay and her medical benefits would stop until she became disabled because of her pregnancy.’ ” Id. at 605, 561 A.2d 179 . Subsequently, she filed a complaint with the Federal Equal Employment Opportunity Commission (EEOC); that agency determined that there was not “reasonable cause” to believe that Makovi was the victim of sex discrimination.

It thereafter notified her of a right to bring an action under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e to 2000e-17 (1982). 1 She instead filed a tort action for abusive discharge in the Circuit Court for Baltimore City, alleging that her dismissal from employment was based upon sex discrimination in violation of the federal law and the Maryland Fair Employment Practices Law, Article 49B, §§ 14-18. We held that the tort of abusive discharge will not lie where the public policy sought to be vindicated by the tort is expressed in a statute which carries its own remedy for vindicating that public policy. Id. at 609, 561 A.2d 179 . We noted that § 2000e-5(g) of Title VII sets forth, as remedies for unlawful sex discrimination, the enjoining of the unlawful employment practice, and “ordering] such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay ..., or any other equitable relief as the court deems appropriate.” We further noted in Makovi, 316 Md. at 607-08 , 561 A.2d 179 , that the Maryland statute, Article 49B, § 11(e), provided ⁴⁹¹ substantially the same remedy for such an unlawful employment practice. 2 We concluded that because Title VII and the Maryland statute provided a remedy for Makovi’s alleged employment discrimination, e.g., reinstatement with back pay, “the generally accepted reason for recognizing the tort, that of vindicating an otherwise civilly unremedied public policy violation, [did] not apply.” Id. at 626, 561 A.2d 179 .

II

Chappell argues before us, notwithstanding our holding in Makovi , that employment practices that tend to violate the Maryland Fair Employment Practices Law and the Maryland Minimum Wage Act are within the scope of the mandate in Adler . He claims that Makovi is not applicable because in that case the plaintiff, who was discharged because of her pregnancy, had available to her a statutory remedy under Article 49B, § 11(e). Chappell asserts that he has not alleged that SMH discriminated against him on the basis of sex or race, or violated his rights under the state wage and hour laws; rather, he says that his discharge was prompted by his employer’s dissatisfaction with his questioning of SMH’s claimed violations of Maryland employment laws. Thus, he states that his “status,” i.e., sex, race, etc., was not the reason for his discharge, but rather it was his conduct in identifying problems within SMH which gave rise to his termination.

He thereby seeks to distinguish his case from Makovi , suggesting that because he was not discriminated against on the basis of his ⁴⁹² status, as was the employee in Makovi , the anti-discrimination statutes, i.e., Title VII and the Maryland Fair Employment Practices Law, are not applicable. Chappell further argues that the available statutory remedies are inadequate and unacceptable to his particular injury, and therefore, the tort of abusive discharge must be invoked to fully compensate him by way of compensatory and punitive damages. III. [I] The Maryland Fair Employment Practices Law was enacted in 1965 to ensure equal opportunity employment throughout the State. The Maryland Commission on Human Relations is the administrative agency charged with enforcing the provisions of the statute.

Section 14 of the Act provides that it is the public policy of the State “to assure all persons equal opportunity in receiving employment and in all labor management-union relations regardless of race, color, religion, ancestry or national origin, sex, age, marital status, or physical or mental handicap unrelated in nature and extent so as to reasonably preclude the performance of the employment, and to that end to prohibit discrimination in employment by any person, group, labor organization, organization or any employer or his agents.” Section 16 defines “unlawful employment practices” by an employer in terms closely tracking the language of the federal act. Relevant to this case are §§ 16(a) and 16(f), which state, respectively: “(a) It shall be an unlawful employment practice for an employer: (1) To fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, age, national origin, marital status, or physical or mental handicap unrelated in nature and extent so as to reasonably preclude the performance of the employment; or ⁴⁹³ (2) To limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of the individual’s race, color, religion, sex, age, national origin, marital status, or physical or mental handicap unrelated in nature and extent so as to reasonably preclude the performance of the employment; (f) It is an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment, for an employment agency to discriminate against any individual, or for a labor organization to discriminate against any member thereof or applicant for membership, because he has opposed any practice made an unlawful employment practice by this subtitle or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subtitle.” The Maryland Minimum Wage Act also was enacted in 1965 to “establish minimum wage compensation standards in the State ... to provide a maintenance level consistent with the needs of the population for their health, efficiency and general well-being.” Article 100, § 81. Section 83 sets forth minimum wages, overtime rates and exemptions according to job classifications. As earlier observed, we said in Makovi that “[ajbusive discharge is inherently limited to remedying only those discharges in violation of a clear mandate of public policy which otherwise would not be vindicated by a civil remedy.” 316 Md. at 605 , 561 A.2d 179 .

Because Chappell has available to him a civil remedy under both federal and state law, provided he meets his burden of proof, this case is governed by the principles of Makovi , which preclude application of a tort remedy to his discharge from employment. ⁴⁹⁴ Section 2000e-3(a) of the Civil Rights Act, like §. 16(f) of Article 49B, makes it unlawful for an employer to discriminate against any employee either “because he has opposed any practice made an unlawful employment practice” under Title VII (the opposition clause), or “because he has made a charge, testified, assisted, or participated in any. manner in an investigation, proceeding, or hearing” under Title VII (the participation clause). 3 In the absence of legislative intent to the contrary, we read § 16(f) of the state act in harmony with § 2000e-3(a) of the federal statute, and therefore construe the two provisions to fulfill the same objectives. In this regard, we may look to court decisions interpreting § 2000e-3(a). ., The opposition and participation clauses of § 2000e-3(a) have been liberally applied by the courts to shield employees whd speak out against an employer’s unlawful employment práctices, the obvious rationale being that without some guaranteed protection to assert, equal employment rights, the ultimate purpose of the act would be severely limited. See, e.g., E.E.O.C. v. Crown Zellerbach Corp., 720 F.2d 1008 (9th Cir.1983) (a letter protesting unspecified “racism” and “discrimination” in employer’s practices is a permissible form of protected opposition to discrirhinatory practices); Armstrong v. Index Journal Co., 647 F.2d 441 (4th Cir.1981) (female employee who was discharged because she complained to her employer about its discriminatory practices of soliciting applicants for sales work according to their sex, and by limiting the job opportunities and ⁴⁹⁵ base pay of its female salespersons, was entitled to reinstatement with back pay and salary equal to male counterparts, court costs and attorney’s fees); Berg v. La Crosse Cooler Co., 612 F.2d 1041, 1045 (7th Cir.1980) (“By protecting employees from retaliation, [§ 2000e-3(a)] is designed to encourage employees to call to their employers’ attention discriminatory practices of which the employer may be unaware or which might result in protracted litigation to determine their legality if they are not voluntarily changed.”); Eichman v. Ind. State Univ.

Bd. of Trustees, 597 F.2d 1104 (7th Cir.1979) (plaintiff who alleged that he assisted a woman who was trying to exercise her Title VII rights to retain her job,