WURTZ v. BEECHER METROPOLITAN DISTRICT

WURTZ v BEECHER METROPOLITAN DISTRICT Docket No. 301752. Submitted March 13, 2012, at Detroit. Decided October 2, 2012, at 9:05 a.m. Leave to appeal granted, 494 Mich 862. Richard L. Wurtz brought an action under the Whistleblowers’ Protection Act (WPA), MCL 15.361 et seq., in the Genesee Circuit Court against Beecher Metropolitan District, Leo McClain, Jacquelin Corlew, and Sheila Thorn. On February 1, 2000, plaintiff signed a 10-year employment contract with the district, which provided water and sewage services in Genesee County. Plaintiff alleged that defendants violated the WPA when they decided not to renew his contract after he engaged in activities that amounted to whistleblowing during 2008 and 2009. The individually named defendants were three of the five elected board members for the district during the relevant period. Defendants moved for summary disposition under MCR 2.116(0(10), asserting that plaintiff had not suffered an adverse employment action and that the district had no obligation to renew his contract. The court, Judith A. Fullerton, J., granted summary disposition in favor of defendants concluding that plaintiff had not suffered an adverse employment action. Plaintiff appealed. The Court of Appeals held.-. 1. The elements of a prima facie case under the WPA are well established: (1) the plaintiff was engaged in protected activity as defined by the act, (2) the plaintiff was discharged or discriminated against, and (3) a causal connection exists between the protected activity and the discharge or adverse employment action. Under the act, protected activity includes reporting to a public body a violation of a law, regulation, or rule. Plaintiff engaged in protected activity under the act when he reported to the local prosecutor and other governmental entities that he suspected that defendants had violated the Open Meetings Act, MCL 15.261 et seq., and when he met with members of the sheriffs office to report that he believed the individual defendants had acted illegally with regard to reimbursements they had claimed for attending an American Water Works Association conference in San Diego. For an employer’s action to amount to an adverse employment action, the action must he materially adverse, meaning that it must be more than a mere inconvenience or an alteration of job responsibilities. Nonrenewal of an employment contract may constitute an adverse employment action under the WPA. To hold otherwise would be to carve an arbitrary distinction between contractual and at-will employees. Accordingly, the trial court erred by granting summary disposition in favor of defendants on that basis. 2. Summary disposition before the close of discovery is appropriate if there is no reasonable chance that further discovery will result in factual support for the nonmoving party. However, summary disposition is inappropriate when questions of motive, intention, or other conditions of the mind are material issues. Whether nonrenewal of a contract amounts to an adverse employment action in a particular instance will depend on the circumstances of the case. In this case, summary disposition was premature. Plaintiff was not given an adequate opportunity to develop a record regarding whether the nonrenewal of his contract was an adverse employment action. Plaintiff had submitted a discovery request for documents concerning whether other contractual employees had their contracts renewed. Whether other employees’ contracts were renewed pro forma was relevant to whether plaintiff’s contract was not renewed because of his whistleblowing activity. Further, questions of material fact remained regarding when the district decided not to renew plaintiff’s contract. Summary disposition was also improper because the motivation for defendants’ decision not to renew plaintiff’s contract was at issue. Reversed and remanded. K. F. Kelly, J., dissenting, would have affirmed the decision of the trial court. The WPA requires the existence of an employment relationship; its protections do not extend to cover former employees who seek reemployment, to preemployment negotiations, or to the refusal to hire. By plaintiff’s own admission, defendants scrupulously adhered to the terms of his contract. Absent a contractual obligation or legal duty to consider an extension or renewal of an employment contract, a cause of action under the WPA is unavailing when a contractual employee finishes a fixed-term contract. Because plaintiff was not an employee under the act after his contract was fulfilled, he did not suffer an adverse employment action. Because no additional amount of discovery would have assisted plaintiff in developing his case, the trial court correctly granted summary disposition in favor of defendants. Labor Relations — Whistleblowers’ Protection Act — Adverse Employment Actions — Nonrenewal of an Employment Contract. The elements of a prima facie case under the Whistleblowers’ Protection Act are (1) the plaintiff was engaged in protected activity as defined by the act, (2) the plaintiff was discharged or discriminated against, and (3) a causal connection exists between the protected activity and the discharge or adverse employment action; under the act, protected activity includes reporting to a public body a violation of a law, regulation, or rule; for an employer’s action to amount to an adverse employment action, the action must be materially adverse, meaning that it must be more than a mere inconvenience or an alteration of job responsibilities; nonrenewal of an employment contract may constitute an adverse employment action under the act; whether nonrenewal of a contract amounts to an adverse employment action in a particular instance will depend on the circumstances of the case (MCL 15.361 et seq.). Charles A. Grossmann for plaintiff. Landry, Mazzeo & Dembinski, EC. (by David B. Landry and Nancy V. Dembinski), for defendants. Before: WHITBECK, EJ., and JANSEN and K. E KELLY, JJ. JANSEN, J. Plaintiff appeals by right an order granting summary disposition to defendants in this action under the Whistleblowers’ Protection Act (WPA). We reverse and remand for further proceedings consistent with this opinion. I. FACTS AND PROCEDURAL HISTORY This case pertains to the last two years of plaintiffs employment with Beecher Metropolitan District. The district provides water and sewage services to approximately 4,000 residential and commercial customers near Flint. The three individually named defendants, McClain, Corlew, and Thorn, were three of five elected board members for the district at all times relevant to this case. On February 1, 2000, plaintiff signed an employment contract with the district. The contract provided that the district would employ plaintiff from February 1, 2000, until February 1, 2010, as the district’s administrator. The parties do not dispute that plaintiff was employed for the full 10-year period under the contract, nor do the parties dispute that plaintiff received all compensation to which he was entitled under his contract. Rather, plaintiff alleges that he was discriminated against under the WPA when defendants decided to not renew his contract. Plaintiff alleges that, over the course of a two-year period, he engaged in activities that amounted to whistleblowing under the WPA, and that his contract was not renewed as a consequence of his whistleblowing activity. A. 2008 In May 2008, plaintiff sent a letter to the Genesee County Prosecutor, the Genesee County Sheriff, and the Mt. Morris Township police chief. The letter alleged that McClain, Corlew, and Thorn had violated the Open Meetings Act (OMA). Specifically, the letter claimed that plaintiff, in his capacity as administrator, had received a billing statement from an attorney indicating that on April 2, 2008, the attorney had met privately with board members McClain, Corlew, and Thorn. Plaintiff, in his letter, inferred that, because this attorney had no existing arrangement with the district, “a majority of the [board] had met privately . .. [with the attorney] to discuss public business.” The letter noted that the board had later voted to hire the attorney. The letter also claimed that the attorney, along with McClain, Corlew, and Thorn, had “attended a... union negotiating session. Neither [plaintiff], nor any other staff, nor the other 2 members of the Board, knew anything in advance about this meeting, which was not scheduled as a special meeting with the appropriate 18-hour notice to the public.” Plaintiff alleged that, because the April 2 meeting and the subsequent union negotiating session were private meetings involving a majority of the board, those meetings violated the OMA. It is unclear whether the sheriff or police chief responded to the letter, but David Leyton, the Genesee County Prosecutor, did. He wrote that criminal prosecution was but one remedy for OMA violations and that he did not believe that the events described by plaintiff warranted criminal investigation. The prosecutor accordingly did not act on plaintiffs letter. B. 2009 In January 2009, plaintiff sent a memorandum to McClain, the board president, proposing an extension and alteration of his employment contract. Plaintiff recommended that the district extend his employment to August 1, 2012, and reduce his salary and benefits, which would save the district about $33,000. At its February 11, 2009 meeting, the board told plaintiff that he could present the amended contract to the board, but at its March 11, 2009 meeting, a motion to have “[plaintiff] draw up an employment agreement with [the board’s attorney]” failed; McClain, Corlew, and Thorn voted against the motion. In May 2009, plaintiff expressed disapproval, in a memorandum sent to the board, about the possible expense to taxpayers of the board members’ upcoming trip to San Diego for the American Water Works Association (AWWA) conference. Plaintiff noted that the trip was projected to cost taxpayers $29,000, which included trips for the board members to Sea World and the San Diego Zoo. Moreover, the board members were apparently planning on driving to San Diego for the conference; plaintiff noted that “if gas mileage is given [for the board members to drive], as previously requested, that amounts to over $11,000.00, whereas members can fly from Bishop Airport. . . for $280.00 round trip .... Another $4,000.00 could be saved for food and lodging for the nearly ten days requested for travelling [by car].” Plaintiffs memorandum requested that the board pass resolutions detailing the method of compensation for travel, and recommended that the board members be reimbursed only for the price of airfare even if they opted to drive to the AWWA conference. On July 8, 2009, plaintiff asked the board to hold a special meeting to discuss the possibility of “mutually discontinuing]” their relationship, and an attempt at that meeting was held on July 15, 2009. Plaintiff, however, refused to meet with the board because the board had its attorney present for the meeting, and plaintiff interpreted the attorney’s presence as a breach of the “gentlemen’s understanding” that the meeting would be an open dialogue between the board and plaintiff only. Plaintiff indicated that he was “frustrated” with the board, but wanted to continue his employment with the district and expressed his desire to do so. In August 2009, after the AWWA conference, plaintiff met with members of the Genesee County Sheriffs Office to discuss his belief that the board members had acted improperly or illegally regarding reimbursements for their trip to the AWWA conference. For example, plaintiff was concerned that the board members had gone to the San Diego Zoo, Sea World, and lavish dinners with family and friends, all at taxpayer expense. Additionally, plaintiff told the sheriffs office that four of five board members actually flew to San Diego, but had reported that they drove, accordingly receiving an amount of per diem compensation and reimbursement for mileage that they were not entitled to claim. Following defendant’s meeting with the sheriffs office, a criminal investigation of the board members ensued. At least one article about the board members’ reimbursements from the AWWA conference appeared in the Flint Journal. Public attendance at board meetings increased, and at those meetings members of the public began openly questioning board members about their travel expenses. On November 11, 2009, Thorn made a motion to not extend plaintiffs employment contract beyond its expiration and to begin looking for a new administrator. The motion passed the board three votes to two. McClain, Corlew, and Thorn voted in favor of the motion. C. 2010 Plaintiffs last day of employment with the district was January 31, 2010. On January 19, 2010, plaintiff filed a complaint alleging that defendants had violated the WPA by not renewing his employment contract; plaintiff alleged that the board’s decision to not renew his contract was retaliation for his reporting suspected violations of, inter alia, the OMA, the Freedom of Information Act, and other Michigan statutes. On October 18, 2010, plaintiff served defendants with a request for production of employment contracts and records. Among other things, plaintiff asked for “the written contracts . . . [of] non-union employees who were employed anytime with the District between 1990 to the present.” Defendants did not produce these documents. On November 15, 2010, defendants filed a motion for summary disposition under MCR 2.116(C)(10), in which they argued that plaintiff did not suffer an adverse employment action because “there is no evidence that Defendants discharged, threatened, or discriminated against the Plaintiff regarding his compensation, terms, conditions, location or privileges of employment.” In any case, defendants argued, the board had no obligation to renew plaintiffs contract. Defendants also argued that the board’s decision to not renew plaintiffs employment contract was made for the first time in March 2009, well before any of the events surrounding the AWWA conference and reimbursements. That decision, according to defendants, was merely “reiterated” in November 2009, when the board formally voted to not renew defendant’s employment. Concurrent with the time frame of this case, the criminal case against the board members, including McClain, Corlew, and Thorn, related to the AWWA conference expenses and reimbursements, continued. The trial judge dismissed the charges against McClain, and a jury returned verdicts of not guilty in favor of Corlew, Thorn, and the other board members. In its response to defendants’ summary disposition motion, plaintiff argued that summary disposition was premature because at the time he served them with discovery requests, the criminal case against McClain, Corlew, and Thorn was still pending, and “the individual Defendants. . . exercised their 5th Amendment rights” and did not respond to discovery requests. Plaintiff asserted that “[n]ow, the Defendants, after taking the Plaintiffs deposition, but not allowing their own, [are] refusing to provide the requested information . . . .” The trial court granted defendants’ motion for summary disposition on December 6, 2010. After noting that whether nonrenewal of an employment contract amounts to an adverse employment action under Michigan law appears to be an issue of first impression, the trial court explained: [I]n this case the contract for the plaintiff did expire in February of TO — February 1. And despite the activities that took place earlier in the year of reporting by [plaintiff] to a public body and public officials ... everything from the [Flint] Journal [newspaper] to the sheriffs department and the prosecutor, the Board, and I’m surprised it happened, let him stay on to February 1 of TO. And so I find there’s no adverse employment action by the District and that summary disposition should be granted and I grant it. Plaintiff now appeals by right. II. STANDARD OF REVIEW “This Court reviews the grant or denial of summary disposition de novo to determine if the moving party is entitled to judgment as a matter of law. In making this determination, the Court reviews the entire record to determine whether defendant was entitled to summary disposition.” A motion under MCR 2.116(0(10) tests the factual sufficiency of the complaint. In evaluating a motion for summary disposition brought under this subsection, a trial court considers affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties ... in the light most favorable to the party opposing the motion. Where the proffered evidence fails to establish a genuine issue regarding any material fact, the moving party is entitled to judgment as a matter of law.[] “Whether a plaintiff has established a prima facie case under the WPA is a question of law subject to review de novo.” III. ANALYSIS The elements of a prima facie case under the WPA are well established: “(1) the plaintiff was engaged in protected activity as defined by the act, (2) the plaintiff was discharged or discriminated against, and (3) a causal connection exists between the protected activity and the discharge or adverse employment action.” The parties do not dispute that the first element of the prima facie case is satisfied here. In May 2008, plaintiff reported to the local prosecutor and other governmental entities that he suspected that defendants had violated the OMA; in August 2009, plaintiff met with members of the sheriffs office to report that he believed defendants had acted illegally with regard to the AWWA conference reimbursements. The WPA defines “protected activity” as, among other things, “ ‘reporting to a public body a violation of a law, regulation, or rule . . . .’ ” Accordingly, plaintiffs actions amount to a “protected activity” under the WPA. Defendants focus their argument on the second element of the prima facie case, arguing that plaintiff was a contractual employee, and the failure to renew his contract was not, and could not be, an adverse employment action because plaintiff had no expectation of employment after the expiration of his contract, the terms of which were fulfilled. Michigan courts have defined “adverse employment action” in the context of Michigan’s Civil Rights Act (CRA) and in the WPA context. Those definitions are identical. In both contexts, for an employer’s action to amount to an adverse employment action, the action must be “materially adverse,” meaning that it must be more than a “mere inconvenience or an alteration of job responsibilities . . . .” This definition of “adverse employment action” initially arose in federal courts, in the context of federal workplace discrimination laws, and was eventually adopted by Michigan courts for purposes of the CRA and the WPA. Michigan courts have also suggested that, in the CRA context, the nonrenewal of an employment contract may amount to an adverse employment action, although no Michigan case addresses the issue squarely. There are no Michigan cases interpreting the WPA that address the issue at all. “Though not binding on this Court, federal precedent is generally considered highly persuasive when it addresses analogous issues. In the context of discrimination cases, federal precedent may be consulted for guidance.” Accordingly, because the WPA’s definition of “adverse employment action” derives from the federal courts’ interpretation of the same term as used in federal discrimination laws, we turn to the federal courts for guidance regarding whether non-renewal of a contract may amount to an adverse employment action. This issue was addressed directly by the United States Court of Appeals for the Second Circuit in Leibowitz v Cornell University. In Liebowitz, the plaintiff, a 51-year-old female university professor, accepted an early retirement package after her employer did not offer