Fired after negative reference, employee advances retaliation, tortious interference claims against former employer
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Monday, July 16, 2018

Fired after negative reference, employee advances retaliation, tortious interference claims against former employer

By Kathleen Kapusta, J.D.

An employee who alleged she was terminated as a result of her former employer’s comment that she didn’t leave on good terms and her new employer’s belief she had filed a lawsuit against the former employer can advance her state-law retaliation claim against the former employer, but not the new employer, a federal court in Ohio ruled. Her claim that her former employer breached a non-disparagement clause in their settlement agreement failed, however, as did her breach of employment agreement and promissory estoppel claim against her current employer. Nor could she advance wrongful discharge claims against either entity, but her tortious interference claim against her former employer also survived dismissal (White v. Adena Health System, July 11, 2018, Smith, G.).

After nine years of employment as a cardiovascular perfusionist with Adena Health System, the employee was fired months after complaining about patient safety issues and harassing remarks by physicians related to her gender and religion. She subsequently hired a lawyer and entered into a settlement agreement with Adena that identified four individuals who were required to refrain from making any disparaging statements about her to any prospective employer.

Didn’t leave on good terms. Sometime after that, Perfusion Professionals (PPI) offered her a position located at Southern Ohio Medical Center (SOMC), and she began working prior to her scheduled start date of July 1. A couple of weeks later, a PPI representative told her that SOMC had expressed concern about her working there because she had allegedly filed a suit against Adena. PPI requested that she met with SOMC on June 16. On June 13, an SOMC director contacted an Adena manager to inquire about the employee. In response, the Adena manager stated that the employee “didn’t leave here on good terms” and suggested the director contact HR. On June 20, PPI terminated the employee, explaining that SOMC had “absolutely no interest in hiring her upon learning of the lawsuit against Adena.” The employee then sued Adena, PPI, and SOMC, asserting numerous claims against all three entities.

Retaliation claims against SOMC, PPI. Suing for retaliation, the employee alleged that adverse actions were taken against her because she engaged in activity protected by Title VII. Dismissing her Title VII claim against SOMC, the court noted that SOMC’s mistaken belief she had filed a lawsuit against Adena did not, standing alone, plausibly suggest SOMC knew of her protected activity. While she alleged that a “John Doe” rep from Adena provided information regarding her prior Title VII and patient safety complaints against Aden to SOMC, this was unsupported by any factual allegations. There simply were no factual allegations, the court observed, to raise a plausible inference that SOMC was informed by anyone at Adena that the employee had made or settled Title VII complaints with Adena, which was the actual protected activity she engaged in, and without knowledge of her protected activity, SOMC could not have taken adverse action against her based on that activity. And because the employee did not sufficiently allege that PPI had knowledge of her protected activity, her retaliation claim against it failed for the same reasons.

Retaliation claim against Adena. Turning to the employee’s state-law retaliation claim against Adena and its manager, the court found her complaint established that the manager had at least some knowledge the employee’s departure from Adena was not on good terms. This was enough to plausibly infer the manager was also aware of the employee’s protected complaints and wrongful termination allegations. Her allegation that SOMC learned from an Adena representative that the employee had a “lawsuit” against Adena also raised a plausible inference that the individual was aware of the employee’s protected activity.

Further, noting that the Sixth Circuit has expressly recognized that negative job references qualify as adverse actions for purposes of retaliation claims under Title VII, the court found the manager’s statement that the employee left on bad terms qualified as an adverse action. And because the employee sufficiently alleged that Adena would not have given the negative reference to SOMC in the absence of her protected activity, this claim survived dismissal.

Breach of non-disparagement clause. The employee also claimed Adena and its manager breached the settlement agreement’s non-disparagement clause, but she failed to specify what statements were disparaging. Nor was the manager a party to the settlement agreement or one of the four named individuals who were required to refrain from making disparaging remarks about the employee. Finally, said the court, she did not sufficiently allege that any of those four individuals made a disparaging remark about her.

Wrongful discharge. The employee’s wrongful discharge claim against SOMC also failed as she did not sufficiently allege it was her employer. Although she claimed it was a joint employer with PPI, she offered no authority extending joint employer liability to the context of wrongful discharge in violation of public policy. And even if it were extended to joint employers, she did not allege that it shared or codetermined those matters governing the essential terms and conditions of her employment, or that it had the power to hire, fire, discipline, affect compensation and benefits, or direct and supervise her performance.

As to her wrongful discharge claim against PPI, while Ohio courts have found a clear public policy in favor of allowing employees to consult with counsel, they also distinguish between employees who merely consult an attorney to ascertain their rights and employees who file a lawsuit against their employer. This distinction, said the court, “is necessary to preserve the balance of the employer-employee relationship, lest the employer be placed ‘in the unenviable position of having to continue in a relationship that has been tainted by the acrimonious nature of litigation.’”

Noting that the employee’s actions here were much closer to having filed a lawsuit than merely consulting with an attorney, the court found she failed to sufficiently show the public policy protecting an employee’s right to consult counsel would extend to her discharge by PPI as a result of her allegations against and settlement with Adena.

Tortious interference with business relationship. As to her tortious interference claim against SOMC, the court pointed out that the employee failed to identify any statute or public policy that would prevent SOMC from refusing to work with her based on her lawsuit against a former employer. Regarding her claim against Adena and its manager, the court rejected Adena’s argument that the manager’s and any John Doe’s statements to SOMC did not create liability for tortious interference because of Ohio’s privilege for employment references.

Here, observed the court, she could prove the disclosure was made in made in retaliation for her protected complaints of harassment and wrongful discharge, and she sufficiently alleged that Adena and the manager retaliated against her in violation of state law. Therefore the privilege did not bar her claim at the pleading stage.

Also rejected was the manager’s assertion that she could not be individually liable for tortious interference because her actions were taken in her capacity as Adena’s employee and not solely for her own benefit. However, the court pointed out, she was alleged to have interfered with the business relationship between the employee and SOMC, and because she was an Adena employee, she was a third party to that relationship. Thus, the employee sufficiently stated a tortious interference claim against the manager.

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