Reporting Alcohol and Immigration Violations Occurring on Employer’s Premises is not “Whistleblowing”

Oregon limits whistleblower protection

No protection for reporting alcohol violations or immigration violations

 Handam v. Wilsonville Holiday Partners, LLC (Or.App. Jan 28, 2009)

As a part of his employment, Plaintiff was licensed to serve liquor under the administrative rules of the Oregon Liquor Control Commission (OLCC). As banquet captain and the morning shift manager, plaintiff supervised several Hispanic employees who were not fluent in English. He discovered photographs showing Hispanic employees drinking champagne and beer during their shift, in violation of OLCC rules. Plaintiff showed the photographs to some managers; they laughed but took no action against the employees. Plaintiff also learned that the Hispanic employees were violating OLCC rules by keeping open containers of alcoholic beverages in the banquet office and refrigerator.

Plaintiff reported the alcohol violations to his manager who ignored them but started to treat plaintiff differently by refusing to allow him to take rest and meal breaks, reducing his work hours, making his job harder by reducing his staff, correcting him about things for which he did not correct Hispanic employees, and giving Hispanic employees more hours even though plaintiff had seniority. Plaintiff began to believe that he was being treated differently because he is not Hispanic. Eventually, the manager demoted Plaintiff to waiter. Plaintiff quit his job. He brought this proceeding, asserting, among other claims, that he was constructively discharged from his employment in retaliation for complaining about the Hispanic employees.

The general rule in Oregon is that employment is “at will.” That means that, except as otherwise provided by statute or employment agreement, employees may be terminated without notice and for any reason. Simpson v. Western Graphics, 293 Or 96, 99, 643 P.2d 1276 (1982). There are exceptions, however. As relevant to this case, Oregon allows recovery in tort to employees who are discharged for certain socially undesirable motives. Babick v. Oregon Arena Corp., 333 Or 401, 407-10, 40 P3d 1059 (2002) (describing tort); Holien, 298 Or at 86. An employer may be subject to tort liability for discharging an employee for fulfilling an important public duty or societal obligation, see, e.g., Delaney v. Taco Time Int’l, 297 Or 10, 16-17, 681 P.2d 114 (1984) (employee discharged for refusing to defame another employee); Nees v. Hocks, 272 Or 210, 218-19, 536 P.2d 512 (1975) (employee discharged for serving on jury); or for exercising a job-related right of public importance, see, e.g., Brown v. Transcon Lines, 284 Or 597, 612, 588 P.2d 1087 (1978) (employee unlawfully discharged for filing workers’ compensation claim).

Here, Plaintiff was not discharged from his employment; he quit. Thus, to establish a wrongful discharge claim, he must additionally establish that he was constructively discharged, meaning that his employer’s intentional conduct made his employment so intolerable that a reasonable person in plaintiff’s position would have resigned. McGanty v. Staudenraus, 321 Or 532, 557, 901 P.2d 841 (1995). “Constructive discharge” is not, in itself, a tort-it is simply an alternate means of establishing the element of discharge in a claim for wrongful discharge. Thus, a plaintiff may satisfy the discharge prong of a wrongful discharge claim by pleading and proving a “constructive discharge,” but the plaintiff must nonetheless establish a motive for the constructive discharge that gives rise to liability for wrongful discharge.

The court concluded that Plaintiff’s act of reporting the OLCC violations was not a job-related right of the nature sufficient to support a claim for wrongful discharge. In that context, a job-related right is a personal right or benefit of public importance, as indicated by statutory and constitutional provisions and case law, to which the worker is entitled by virtue of his or her employment. Holien, 298 Or at 90; see Brown/Shidler v. Board of Education, 207 Or.App. 163, 169, 139 P3d 1048, rev den, 342 Or 253 (2006) (explaining that a job-related right is “a personal benefit or right to which the employee is entitled as a matter of public policy.”). Examples include workers’ compensation benefits or resistance to sexual harassment or discrimination. Holien, 298 Or at 90 (statutes and case law prohibiting sexual harassment establish important public policy related to rights of employee). The reporting of OLCC violations, although potentially in the employee’s personal interest, is not a right of employment; no statute, rule, constitutional provision or case law confers it. See Dymock v. Norwest Safety Protective Equipment, 334 Or 55, 60, 45 P3d 114 (2002) (Although statute declared that noncompetition agreements presented to employees at times other than those permitted by statute are void, nothing in statute conferred a right to refuse to sign such agreements for purposes of wrongful discharge.).

The court also concluded Plaintiff did not carry out a public duty that enjoys protection from an employer’s ability to terminate an employee at will. Relying on the Supreme Court Babick decision, requiring the employee to be under a statutory obligation to report the violation. The Court explained:

In Babick’s wake, we must conclude that, for purposes of wrongful discharge, the class of conduct that is deemed to ‘enjoy high social value’ is very narrowly circumscribed. Nevertheless, that class consists at least of (1) conduct that, by statute or rule, is explicitly described as being of high social value; and (2) conduct that is similar to that giving rise to legally compelled obligations to act in other, analogous contexts. However, it is also apparent from Babick that general public concern over a particular social problem ( e.g., the use of controlled substances in Babick ) does not necessarily give rise to a protected ‘important public duty’ to act, regardless of how ostensibly laudable the actor’s efforts may be.

The Court also rejected the Plaintiff’s contention that his actions in reporting the OLCC violations were analogous to those of a “whistleblower,” who enjoys protection from discharge for reporting or disclosing certain abuses or illegal behaviors of the employer. Lamson, 216 Or.App. at 380-81. Whistleblowing typically involves reporting or threatening to report an employer’s wrongdoing of significant concern to public health or safety. See, e.g., Love, 209 Or.App. at 476 (employer cover-up of fatal workplace accident); Hirsovescu v. Shangri-La Corp., 113 Or.App. 145, 148-49, 831 P.2d 73 (1992) (making good faith reports of suspected violations of nursing home patients’ rights). There was no evidence presented here from which it could be found that the OLCC violations that plaintiff reported to his employer presented a significant concern to public health or safety. It reached the same conclusions as to whistleblowing with respect to the reporting of immigration violations. Plaintiff did not cite any statute or administrative rule that explicitly or implicitly imposed on him an affirmative duty to report the alleged violations.

In Oregon, drinking on the job or hiring illegal aliens are not significant concerns to public health and safety.


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