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Clark v. New Hampshire Department of Employment Security

Supreme Court of New Hampshire, Merrimack

January 11, 2019

MICHELLE CLARK
v.
NEW HAMPSHIRE DEPARTMENT OF EMPLOYMENT SECURITY & a.

          Argued: October 11, 2018

          Law Office of Leslie H. Johnson, PLLC, of Center Sandwich (Leslie H. Johnson on the brief and orally), for the plaintiff.

          Gordon J. MacDonald, attorney general (Lynmarie C. Cusack, senior assistant attorney general, on the brief and orally), for the defendants.

          DONOVAN, J.

         The plaintiff, Michelle Clark, appeals an order of the Superior Court (McNamara, J.) granting summary judgment to the defendants, the New Hampshire Department of Employment Security, Dianne M. Carpenter, Darrell L. Gates, Sandra Jamak, Colleen S. O'Neill, Tara G. Reardon, and Gloria J. Timmons, on the plaintiff's claims alleging a violation of the Whistleblowers' Protection Act, see RSA 275-E:2, II (Supp. 2018), and the Public Employee Freedom of Expression Act, see RSA 98-E:1 (2013). She also appeals an order of the Superior Court (Smukler, J.) dismissing her claim of wrongful discharge/demotion against DES. We affirm in part, reverse in part, and remand.

         The record, viewed in the light most favorable to the plaintiff, supports the following facts. The plaintiff and the individual defendants are all current or former employees of DES. The plaintiff has been employed by DES since the mid-1990s. In October 2010, she was promoted to a supervisor position in the Benefit Support Unit in DES's Unemployment Compensation Bureau, which was a position in labor grade 21, step 7.[1] At step 7, she received an hourly rate of $25.01 and worked in Manchester.

         As a supervisor, she was responsible for supervising approximately fifteen employees, including three interns, two of whom were children of two named defendants. In March 2011, the plaintiff received her first performance evaluation for the period of October 2010 through January 2011. The performance evaluation was positive and, according to the plaintiff, her supervisor, Timmons, promised her that she would be promoted to labor grade 24 "in a few weeks."

         During this timeframe, the plaintiff became concerned about issues relating to her interns' hours and responsibilities and their behavior in the workplace. The plaintiff communicated some of these concerns to Timmons and Carpenter, the director of the Unemployment Compensation Bureau. According to the plaintiff, she sought to address her concerns regarding the interns with her union representatives, but Timmons and Carpenter tried to prevent her from doing so.

         At some point, the plaintiff also suspected that her supervisors had altered a review she had prepared for an employee under her supervision because the employee had complained about the interns and Timmons' management. The plaintiff alleges that a state senator was going to attend the employee's review, but Timmons ordered the plaintiff not to speak to the senator. The plaintiff contends that she was therefore not permitted to attend the employee's review or speak to the senator.

         In July 2011, the plaintiff received her second performance evaluation for the period covering January through April 2011. The second evaluation was negative, and she did not receive her promised promotion. Shortly thereafter, on August 2, 2011, the plaintiff received a letter from a DES Human Resources Administrator, informing her that she would be laid off on August 18, 2011. Pursuant to a mandatory reduction in force, the other employees in her unit were also laid off. However, prior to her layoff date, the plaintiff accepted a demotion to the position of Program Assistant I in lieu of a layoff, which began on August 19, 2011. This new position was in labor grade 12, step 8, with an hourly rate of $17.88, and required her to commute to Concord. At some time during that month, the plaintiff met with Reardon, who was the commissioner of DES, and discussed, among other things, issues pertaining to at least one intern.

         In September 2011, the plaintiff appealed her demotion to the New Hampshire Personnel Appeals Board (PAB) through a grievance representative from her union. In her appeal, she alleged that she was unlawfully demoted in response to raising concerns about the hours and behavior of the interns. During the pendency of the appeal, she was represented by counsel provided by her union and discussed issues relating to the interns with other representatives from her union, including the union president.

         The plaintiff alleges that she experienced various forms of harassment during this period, which she contends was for the purpose of retaliation: her car was "egged" in the DES parking lot, her home mailbox was smashed, and she received anonymous phone calls and mail at home and at work. As a result of distress from these incidents, the plaintiff went on medical leave from December 2011 to February 2012.

         In addition to her PAB appeal, the plaintiff communicated with other state agencies about the intern issues and the harassment she was experiencing: in May 2012, she filed a complaint with the New Hampshire Executive Branch Ethics Committee against Reardon for failing to address misuse of the hiring system, nepotism, and harassment; in June 2012, she filed a whistleblower complaint with the New Hampshire Department of Labor against DES on similar grounds; and, at some point, she participated in an investigation of DES by the New Hampshire Attorney General's Office.

         In July 2012, the Governor and Executive Council appointed George Copadis as interim commissioner of DES. A few weeks later, Copadis met with the plaintiff to discuss the issues she had with the agency. Subsequently, by letter dated February 6, 2013, Copadis informed the plaintiff that he intended to reinstate her to a position of "like seniority, status and pay equal to that which [she] had" prior to her demotion, provide her with back pay from her date of demotion through February 7, 2013, and remove the negative performance evaluation from her personnel file. The letter stated that the plaintiff would "continue in [her] role as a Quality Control Investigator," a position in labor grade 21, which the plaintiff obtained in November 2012, but would be moved from step 1 to step 7. Copadis also recommended her for the Level 1, Public Supervisor Program in the 2013 Certified Public Manager Course, which would allow her to "enhance management skills and increase knowledge of government practices." Finally, Copadis arranged for the plaintiff to work in Manchester rather than Concord "until the Tobey Building is ready to be occupied by the department," citing the plaintiff's "continued concerns regarding the drive to Concord where [she] had formerly been assigned to the Manchester office."

         Following this decision, the plaintiff received back pay and Medicare and retirement benefits, and she withdrew her PAB appeal. At some point, she also withdrew her whistleblower complaint.

         The plaintiff currently holds the position of Quality Control Investigator at step 8, the highest step in labor grade 21. According to the plaintiff, she does not have any supervisory duties and cannot receive a wage increase unless she becomes a supervisor. She has applied unsuccessfully for supervisory positions, and contends that she continues to experience harassment by certain unknown DES employees.

         In May 2014, the plaintiff filed this action against the defendants alleging several claims: (1) violation of the Whistleblowers' Protection Act under RSA chapter 275-E; (2) wrongful discharge/demotion; (3) violation of the Public Employee Freedom of Expression Act under RSA chapter 98-E; (4) intentional infliction of emotional distress (IIED); (5) interference with a contract; (6) violation of the plaintiff's rights under Part I, Articles 22 and 32 of the New Hampshire Constitution; and (7) violation of the plaintiff's rights under the First Amendment to the United States Constitution. Her complaint seeks several remedies, including, inter alia, compensatory and enhanced compensatory damages, back pay, fringe benefits, future wages, loss of earning capacity, attorney's fees and costs, reinstatement to her former position, and injunctive relief.

         The defendants moved to dismiss all of the plaintiff's claims for failure to state a claim for which relief may be granted. The defendants also argued that various theories of immunity bar the plaintiff's action. The Trial Court (Smukler, J.) granted the motion as to the plaintiff's wrongful discharge/demotion claim, ruling that her complaint failed to state a claim for which relief may be granted because: (1) she accepted a different position with DES when her unit was subject to the layoff and therefore remained employed with DES; and (2) New Hampshire does not recognize a cause of action for wrongful demotion. With respect to the remaining claims, the trial court ruled that her complaint was "susceptible of a construction that would permit recovery" but denied the motion without prejudice to allow the court to hold an evidentiary hearing to determine whether the remaining claims were barred by immunity. Following a six-day evidentiary hearing, the Trial Court (Mangones, J.) ruled that the defendants were entitled to immunity on the plaintiff's IIED and interference with contractual relations claims, as well as her state and federal constitutional claims, and dismissed those claims.

         The defendants then moved for summary judgment on the plaintiff's remaining whistleblower and freedom of expression claims. The Trial Court (McNamara, J.) granted the motion, finding that: (1) the plaintiff has already received the statutory remedies available to her under RSA chapter 275-E; and (2) the plaintiff failed to establish that she "engaged in public discourse" on issues relating to DES, which the trial court ruled was required under RSA chapter 98-E. The plaintiff unsuccessfully moved for reconsideration of the trial court's summary judgment order, and this appeal followed.

         I. Motion to Dismiss

         We first address the plaintiff's arguments challenging the trial court's dismissal of her wrongful discharge/demotion claim. We note that the plaintiff does not appeal the trial court's dismissal of her IIED and interference with contractual relations claims or her state and federal constitutional claims.

         In reviewing a trial court's grant of a motion to dismiss, we consider whether the allegations in the plaintiff's pleadings are reasonably susceptible of a construction that would permit recovery. Cluff-Landry v. Roman Catholic Bishop of Manchester, 169 N.H. 670, 673 (2017). We assume the plaintiff's pleadings to be true and construe all reasonable inferences in the light most favorable to her. Id. However, we need not assume the truth of statements in the plaintiff's pleadings that are merely conclusions of law. Id. We then engage in a threshold inquiry that tests the facts in the complaint against the applicable law. Id. We will uphold the trial court's grant of a motion to dismiss if the facts pleaded do not constitute a basis for legal relief. Ramos v. Warden, N.H. State Prison, 169 N.H. 657, 658 (2017).

         We assume, without deciding, that a wrongful discharge claim by a classified employee may be brought against the State. In dismissing the defendant's wrongful discharge claim, the trial court determined that, based upon the facts in the complaint, the plaintiff's employment with DES did not end because she took another position with DES when her unit was subject to the layoff. Therefore, the trial court concluded that she failed to state a claim for which relief may be granted "[b]ecause a wrongful termination case necessarily requires a plaintiff to be terminated from employment." As to the plaintiff's claim that she was wrongfully demoted, the trial court ruled that "New Hampshire does not recognize a cause of action for 'wrongful demotion, '" and declined her invitation to adopt such a cause of action.

         The plaintiff does not dispute the trial court's finding that her employment with DES did not end despite her receipt of the layoff letter. However, relying upon our decision in Cluff-Landry, the plaintiff argues that the trial court erred in dismissing her claim because termination of her employment occurred when she received notice that she would be laid off. We disagree.

         In Cluff-Landry, we held that the plaintiff's cause of action for wrongful discharge began to accrue, for statute of limitations purposes, when she received notice that her contract would not be renewed, rather than on her last day of employment, which was over two months later. Cluff-Landry, 169 N.H. at 677-78. We reached this conclusion because her wrongful discharge claim was based on her employer's decision not to renew her contract, and, at the time she received the notice, all of the elements required to prove wrongful discharge were present. Id.; Leeds v. BAE Sys., 165 N.H. 376, 379 (2013) (wrongful discharge requires proof that: (1) the discharge was motivated by bad faith, retaliation, or malice; and (2) the plaintiff was discharged for performing an act that public policy would encourage or for refusing to do something that public policy would condemn); see also Jeffery v. City of Nashua, 163 N.H. 683, 688 (2012) (holding that the plaintiff's constructive discharge claim began to accrue for statute of limitations ...


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