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Young v. Station 27, Inc.

Supreme Court of Oklahoma

September 12, 2017

KIM YOUNG, Plaintiff/Appellant,
v.
STATION 27, INC. and GO MART, INC., Defendants/Appellees.

         APPEAL FROM THE DISTRICT COURT FOR OKLAHOMA COUNTY

         DISTRICT COURT JUDGMENT AFFIRMED IN PART AND REVERSED IN PART, AND CAUSE REMANDED TO DISTRICT COURT FOR FURTHER PROCEEDINGS

          Bob Burke and Tom Cummings, Oklahoma City, Oklahoma, for Plaintiff/Appellant.

          Jo Ann Deaton and Denelda R. Richardson, Rhodes, Hieronymus, Jones, Tucker & Gable, P.L.L.C., Tulsa, Oklahoma, for Defendants/Appellees.

          Sarah A. Greenwalt, Assistant Solicitor General, Oklahoma City, Oklahoma, for the State of Oklahoma.

          EDMONDSON, J.

         ¶0 Plaintiff brought an action in the District Court against defendants and alleged her termination from employment had been motivated by her workers' compensation claim. Defendants filed two motions to dismiss and argued 85A O.S.Supp.2013 § 7 created an exclusive statutory remedy for plaintiff before the Workers' Compensation Commission. One defendant also argued it was not plaintiff's employer. Plaintiff argued 85A O.S.Supp.2013 § 7 violated Article 2 § 19 of the Oklahoma Constitution. The Oklahoma Attorney General appeared in defense of the state statute. The District Court, the Honorable Bernard M. Jones, District Judge, granted the motions to dismiss and determined the Oklahoma Constitution was not violated. Plaintiff brought an application for an extraordinary writ, the Court recast the proceeding as an appeal and the Court retained the appeal. We hold plaintiff's retaliatory discharge action is based upon the retaliatory discharge statute in effect when her workers' compensation injury occurred, 85 O.S.2011 § 341. We hold 85A O.S.Supp.2013 § 7 does not prevent Young's § 341 action. We hold a Burk tort is not an available alternative remedy for plaintiff's § 341 retaliation claim.

         ¶1 Plaintiff was injured, sought workers' compensation benefits, and approximately thirteen months later her employment was terminated. Plaintiff filed a petition in the District Court and alleged she had been terminated from employment in retaliation for her workers' compensation claim. She alleged her termination violated public policy and she possessed a tort claim pursuant to Burk v. K-Mart Corp., [1] which entitled her to a jury trial in District Court. She alleged 85A O.S.Supp.2013 § 7 of the Administrative Workers' Compensation Act denied her a jury trial and violated Article 2 § 19 of the Oklahoma Constitution. [2]

         ¶2 We hold plaintiff's retaliatory discharge action is not a Burk tort, but a statutory action based upon 85 O.S.2011 § 341 which was the retaliatory discharge statute in effect when her workers' compensation injury occurred. Adjudicating the appeal does not require determining whether 85A O.S. § 7 violates Okla. Const. Art. 2 § 19. However, our analysis assumes 85A O.S. § 7 is constitutional and thereby expresses a statutory continuation of Oklahoma's long-recognized public policy creating an exception to the employment-at-will doctrine by condemning an employer's conduct taken to retaliate for an employee's statutorily-protected actions related to a workers' compensation claim. We also conclude plaintiff's 85 O.S.2011 § 341 retaliation claim does not violate 85A O.S.Supp.2013 § 7. The judgment granted to a party claiming to not be plaintiff's employer is affirmed on that ground, but the judgment is reversed as to the other defendant and reversed on all other issues adjudicated therein.

         I. Trial Court Proceedings

         ¶3 Defendants filed motions to dismiss and argued plaintiff's remedy was before the Workers' Compensation Commission and not the District Court. Go Mart, Inc.'s motion additionally sought dismissal alleging it "was never Plaintiff's employer." The Oklahoma Attorney General appeared and argued 85A O.S.Supp. 2013 § 7 was constitutional. The trial judge granted the two motions to dismiss by two separate journal entries [3] and determined (1) plaintiff's exclusive remedy was a proceeding before the Workers' Compensation Commission pursuant to 85A O.S. § 7, (2) Go Mart was not plaintiff's employer and entitled to a dismissal, (3) plaintiff's Okla. Const. Art. 2 § 19 right to a jury trial is not violated by 85A O.S. § 7, and (4) no common law right to a jury trial exists for a retaliatory discharge claim. Plaintiff brought an extraordinary writ proceeding in this Court which was recast to an appeal. The appeal was retained by this Court. [4]

         ¶4 Plaintiff's petition in error raises three arguments: (1) 85A O.S. § 7 does not apply because her "original injury" occurred on January 29, 2013, prior to the effective date of that statute; (2) 85A O.S.Supp. 2013 § 7 is unconstitutional because it deprives her of a trial by jury and access to common law damages; and (3) 85A O.S.Supp.2013 § 7 is an unconstitutional special law that sanctions or creates disparate remedies for those who complain of employment discrimination. We conclude plaintiff's first assignment of error and associated argument is sufficient to show error requiring reversal as to one defendant, and we must affirm the dismissal as to another defendant. We need not address the other claims raised on appeal.

         II. Judgment Granting Go Mart's Motion to Dismiss

         ¶5 The judgment granting Go Mart's motion to dismiss must be affirmed on appeal. The trial court used alternative grounds when granting Go Mart's motion to dismiss. One of these grounds was ""the Court finds that Go Mart, Inc. was not Plaintiff's employer." This finding was based upon two documents attached to Go Mart's motion dismiss, "Exhibit 1, " an affidavit and "Exhibit 2, " a photocopied sheet of paper appearing to contain a "CompSource Oklahoma" mark with the designation of "Renewal Information" to insured "Go Mart, Inc." with "additional businesses" including "Station 27, Inc." The affidavit is given by a person identifying himself as the president of Station 27, Inc., and states "Plaintiff never worked for Go Mart, Inc." The affidavit states "Go Mart is a separate business corporation from Station 27." The affidavit states there is common ownership of the two corporations with a common worker's compensation policy covering both companies. The affidavit of the president does not identify or expressly refer to Exhibit 2, and it appears in the record as an exhibit with counsel, not a witness, arguing [5] in the motion to dismiss what the exhibit is and what it contains. [6] Go Mart's motion states plaintiff's allegations against Go Mart are based upon an alleged employer status as a necessary condition to establish legal liability. This allegation is not contradicted by plaintiff.

         ¶6 Go Mart's § 2012(B)(1) motion to dismiss states the motion and its two exhibits address subject matter jurisdiction. Go Mart did specifically raise subject matter jurisdiction when it argued plaintiff's sole remedy was against her employer before the Workers' Compensation Commission and not a District Court. [7] Go Mart also states in a footnote in a subsequent filing it was seeking dismissal pursuant to 12 O.S. 2012(B)(6) because it had not been plaintiff's employer. [8] A § 2012 (B)(6) dismissal for failure to state a claim upon which relief may be granted will not be sustained on appeal unless it should appear without doubt that the plaintiff can prove no set of facts in support of the claim for relief. [9] Due to the issues raised by the parties, we need not address whether the exclusive reliance on § 2012(B)(1) in the motion to dismiss improperly conflates the two concepts of a subject matter jurisdiction defense and a nonjurisdictional real party in interest defense when the exhibits attached to the motion to dismiss raise extra-record facts used to show who is a real party in interest. [10]

         ¶7 Alleged error must be raised in the trial court to preserve the issue as a ground urged as error on appeal. [11] Plaintiff's trial court response to Go Mart was silent on the issue of Go Mart's status as an employer as well as Go Mart's use of its exhibits attached to the motion. Plaintiff's application for extraordinary relief does not raise these issues. The District Court's judgment dismissing Go Mart as a party is affirmed on the issue of Go Mart's status as not plaintiff's employer.

         III. Judgment Granting Station 27's Motion to Dismiss

         ¶8 The purpose of a motion to dismiss is to test the law that governs the claim in litigation, not the underlying facts. [12] Station 27's motion to dismiss cited 12 O.S. § 2012 (B)(1) [13] and argued the District Court had no subject matter jurisdiction. When a District Court dismisses an action for lack of subject matter jurisdiction the judgment is reviewed on appeal using a de novo standard. [14] Further, this appeal involves a determination of legislatively expressed public policy for the purpose of applying 85 O.S.2011 § 341, 85A O.S.Supp. 2013 § 7, and potential application of a public policy Burk tort. The determination of public policy as it relates to a Burk tort and the construction and application of statutes relating to retaliatory discharge present questions of law for the Court. [15] Our review is limited to taking all allegations in plaintiff's petition as true together with all reasonable inferences that may be drawn from them and applying such to the jurisdictional issue before us that is reviewed de novo. [16] This standard applies to the order granting Station 27's motion to dismiss.

         IV. 85A O.S.Supp.2013 § 7 and Plaintiff's Retaliation Claim

         ¶9 The statute challenged by plaintiff is 85A O.S. Supp.2013 § 7 (Laws 2013, c. 208, § 7, eff. Feb. 1, 2014), which states as follows.

A. An employer may not discriminate or retaliate against an employee when the employee has in good faith:
1. Filed a claim under this act;
2. Retained a lawyer for representation regarding a claim under this act;
3. Instituted or caused to be instituted any proceeding under the provisions of this act; or
4. Testified or is about to testify in any proceeding under the provisions of this act.
B. The Commission shall have exclusive jurisdiction to hear and decide claims based on subsection A of this section.
C. If the Commission determines that the defendant violated subsection A of this section, the Commission may award the employee back pay up to a maximum of One Hundred Thousand Dollars ($100, 000.00). Interim earnings or amounts earnable with reasonable diligence by the person discriminated against shall reduce the back pay otherwise allowable.
D. The prevailing party shall be entitled to recover costs and a reasonable attorney fee.
E. No employer may discharge an employee during a period of temporary total disability for the sole reason of being absent from work or for the purpose of avoiding payment of temporary total disability benefits to the injured employee.
F. Notwithstanding any other provision of this section, an employer shall not be required to rehire or retain an employee who, after temporary total disability has been exhausted, is determined by a physician to be physically unable to perform his or her assigned duties, or whose position is no longer available.
G. This section shall not be construed as establishing an exception to the employment at will doctrine.
H. The remedies provided for in this section shall be exclusive with respect to any claim arising out of the conduct described in subsection A of this section.

         Emphasis added.

         The effective date of this statute is February 1, 2014, and plaintiff's petition alleges her date of injury occurred on January 29, 2013. The first issue raised by plaintiff is whether 85A O.S.Supp.2013 § 7 applies to prevent her District Court action.

         ¶10 Title 85A O.S.Supp.2013 § 7 expressly condemns actions taken by an employer concerning claims and proceedings "under this act" or "under the provisions of this act:" In (A)(1), filed a claim under this act; In (A)(2), retained a lawyer for representation regarding a claim under this act; In (A)(3), instituted or caused to be instituted any proceeding under the provisions of this act; and (A)(4), testified or is about to testify in any proceeding under the provisions of this act. The phrase "this act" refers to the "Administrative Workers' Compensation Act" in Oklahoma Statutes Title 85A. [17] The language in § 7 referencing "this act" unambiguously refers to the Administrative Workers' Compensation Act, and is judicially construed as an expression of legislative intent to accomplish that result which we are not empowered to rewrite. [18] The retaliation statute in 85A, section 7, facially applies to conduct relating to the Administrative Workers' Compensation Act, and does not apply to conduct relating to other workers' compensation statutes.

         V. Public Policy and Plaintiff's Retaliatory Discharge Claim

         ¶11 Since plaintiff's claim of retaliatory discharge is not based on the express language in 85A O.S.Supp. 2013 § 7, then upon what legal basis may she assert a retaliatory discharge claim? Defendants claim the former statutes on the issue are repealed, and § 7 in effect at the time the District Court action was commenced bars all retaliatory discharge claims in a District Court when they are based upon an employer's response to an employee's conduct related to a workers' compensation claim. Defendants rely on language in § 7(G) stating "This section shall not be construed as establishing an exception to the employment at will doctrine." This reliance is misplaced. On the other hand, plaintiff relies upon Burk v. K-Mart Corp., [19] for bringing a Burk action, and her reliance is misplaced.

         ¶12 We conclude: (1) Title 85A O.S.Supp.2013 § 7 shows a continuation of a public policy creating an exception to the employment-at-will doctrine consistent with application of 85 O.S. 2011 § 341 in effect at the time of Young's workers' compensation injury, and (2) Requiring plaintiff to prosecute her claim under the former statute is consistent with our opinions explaining that the remedy of a Burk tort is not used when an adequate statutory remedy has been provided by the Legislature to protect the public policy at issue. We conclude plaintiff's District Court claim is based upon former 85 O.S. 2011 § 341 because plaintiff's workers' compensation injury is governed by the 2011 Workers' Compensation Code. We now explain our conclusions.

         ¶13 For many years and by different statutes, the Legislature has provided legal remedies for workers who have been terminated from employment in retaliation for their efforts to obtain workers' compensation benefits. The former Retaliatory Discharge Act was originally created by H. B. No. 1353, Ch. 217, O.S.L.1976, pp. 337-338, 85 O.S.Supp.1976 §§ 5-7. [20] Oklahoma's first "Workmens Compensation Law" was enacted in 1915 and administered by the State Industrial Commission. [21] From 1915 until 1976 when 85 O.S. §§ 5-7 was created "an employer was not liable to a former employee, " and "it is clear that in the absence of the Retaliatory Discharge Act, an at-will employee, in the state of Oklahoma, had no cause of action against his/her employer for wrongful discharge." [22]

         ¶14 In Ingram v. Oneok, Inc., [23] this Court examined the former Workers' Compensation Retaliatory Discharge Act, 85 O.S.1981 §§ 5-7. This Act authorized an employee's action in District Court based upon the employee's allegations of employment termination due to employee's workers' compensation claim. [24] We stated therein "The underlying issue for decision is whether the Retaliatory Discharge Act created a new cause of action based upon a statutory liability other than penalty or forfeiture." We noted an appellate court had relied on our opinions in Hinson v. Cameron, [25] and Smith Engineering Works v. Custer, [26] for the proposition "there is no common law liability for discharging an employee at will with or without cause" and the Court's conclusion "'but for the statute, ' no liability would exist." [27]

         ¶15 A few years after Ingram we characterized the former 85 O.S. §§ 5-7 retaliatory discharge action as a "statutory tort, " and explained it was distinct from a compensation claim and the retaliatory discharge action was litigable only in a District Court. [28] Ingram had also explained that the action's tort attribute did not govern application of a two-year statute of limitations, but rather the three-year limitations period for a liability created by a statute applied. In making this conclusion in Ingram we emphasized the cause of action was created by statute. [29] Former 85 O.S. §§ 5-7 created a statutory cause of action with a statutory remedy in a District Court.

         ¶16 Former 85 O.S.Supp. 2010 § 5 prohibited certain actions by an employer in retaliation relating to an employee's worker's compensation proceedings pursuant to former title 85. [30] Section 5's prohibited retaliatory activities referenced an employee's claim and certain actions "under the provisions of this title, " i.e., Title 85, "Workers' Compensation." In 2011 the Legislature repealed 85 O.S.Supp.2010 § 5 (last amended in 2005) by Laws 2011, c. 318, § 87. At the time of this repeal the Legislature enacted a slightly modified version of § 5 and codified it in 85 O.S. 2011 § 341 [31] as part of the 2011 Workers' Compensation Code. [32] Section 341 referred to an employer's prohibited actions relating to an employee's compensation proceeding under the provisions "of this act, " i.e., the 2011 Workers' Compensation Code. [33] Sections 6 and 7 of 85 O.S.2001 were also repealed by Laws 2011, c. 318, § 87, and simultaneously made part of the new 85 O.S.2011 § 341 in paragraph "E" thereof. [34] Section 341 was in effect until February 1, 2014, when the new Administrative Workers' Compensation Act with its 85A O.S. § 7 became effective and 85 O.S. 2011 § 341 was repealed. [35]

         ¶17 Defendants argue the administrative remedy in 85A O.S.Supp. 2013 § 7 must apply to defeat any District Court action brought by plaintiff because § 7 may not be construed as creating an exception to the employment-at-will doctrine and § 341 had been repealed when Young's District Court action was brought. They argue § 7 negates any present public policy in support of limiting the employment-at-will doctrine in the context of a retaliation claim in a District Court, and based upon their reasoning plaintiff may not bring any type of retaliation claim in District Court. In other words, any District Court retaliation claim violates § 7(G). Section 7(G) states "This section shall not be construed as establishing an exception to the employment at will doctrine." May § 7 be read as consistent with § 341 so that an action brought under § 341 does not violate § 7? Yes, it may. As we now explain, a § 341 remedy after the effective date of § 7 does not conflict with that provision because of (1) the constitutional necessity of § 7 being based upon a public policy, a constitutionality on this one point we assume for answering this question, and (2) the express language of § 7 creating an exception to the employment-at-will doctrine for the purposes of § 7. Further, if § 7 is read as an exclusive remedy in the sense of barring a Burk tort as defendants and the Attorney General suggest, [36] then a reading of 85 O.S. § 341 as both an express public policy exception to the employment-at-will doctrine and creating a District Court adequate remedy would be consistent with the language in 85A O.S. Supp.2013 § 7 as construed by these parties. We also conclude a Burk tort is not an available alternative remedy for plaintiff's 85 O.S.2011 § 341 District Court retaliation statutory claim, as we now explain. [37]

         ¶18 The meaning of language in a statute is construed by courts as internally consistent and externally consistent with the constitution, i.e., the meaning of the statute's language is construed so that it does not contradict either itself or the constitution. [38] First, and as a matter of the meaning of words in § 7, they create a statutory exception to the employment-at-will doctrine for the circumstances listed on the face of the statute. A typical statement of the employment-at-will rule given in Burk v. K-Mart Corp. is that an employer may discharge an employee for good cause, for no cause or even for cause morally wrong, without being thereby guilty of legal wrong. [39] The language of § 7 imposes statutory limits on the employer's conduct relating to discharge from employment, and 85A O.S. § 7 expressly and unambiguously acts as a legislatively-created limitation on the employment-at-will doctrine.

         ¶19 Secondly, this legislatively-created limitation on the employment-at-will doctrine must be an expression of a public policy if we assume it is constitutional. A statute may in certain circumstances constitutionally vest a quasi-judicial power in an administrative (executive) agency to exercise adjudicative authority or render decisions in individual proceedings. [40] In Tenneco Oil Co. v. El Paso Natural Gas Co., [41] we discussed the "public rights doctrine, " a concept grounded in a historically recognized distinction between matters that may be conclusively determined by the Executive and Legislative Branches and matters that are inherently judicial. [42] This distinction has been used to describe (1) public rights which arise between the government and others which are regularly adjudicated in an administrative context, and (2) private rights which involve the liability of one individual to another under the law and are adjudicated in courts. [43] The tension between the doctrine of public rights used to justify administrative adjudication of a private right and the individual's common-law remedies in courts is well-known. The U.S. Supreme Court's articulation of this doctrine has relied on one of its opinions from 1856, an opinion that was part of the common law in 1907 when the Oklahoma Constitution was adopted. [44]

         ¶20 In a public rights analysis, the U.S. Supreme Court looks at whether Congress has acted with a valid legislative purpose pursuant to its constitutional legislative powers and created a statutory "private" right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency adjudication when that regulatory scheme "virtually occupies the field." [45] If the statutory right fails this test it is a dispute for an Article III federal court. [46] We need not determine in this proceeding the validity of the Legislature's purpose in enacting 85A O.S.Supp.2013 § 7, [47] or provide a complete analysis for distinguishing public, private, or quasi-public rights. [48] However, we have explained the workers' compensation statutes are part of a public-law regulatory scheme, a "statutory public-law proceeding rather than a private dispute." [49] Historically, court decisions sustaining workers' compensation statutes establishing employer liability hold the view that they are enacted within the police power of the state to accomplish appropriate public policy goals based upon valid public interests. [50] Assuming § 7 is constitutional, the statute must be based upon a public or quasi-public right (Tenneco Oil Co. v. El Paso Natural Gas Co., supra), which is in turn linked to public policy goals and public interests. [51] In summary, the language in 85A O.S.Supp. 2013 § 7 facially limiting an employer's discretion in terminating an employee's employment necessarily, if we assume its constitutionality, expresses a public policy based upon a quasi-public or public right and public interest. We conclude the public policy necessarily expressed in 85A O.S.Supp.2013 § 7 is not violated when plaintiff brings a District Court action based upon the same public policy expressed in former 85 O.S. § 341.

         ¶21 The elements of a Burk tort were explained in Vasek v. Board of County Com'rs of Noble ...


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