Western District Court of Appeals Reverses Dismissal of Whistleblower’s Petition

The Missouri Court of Appeals for the Western District recently reversed a trial court’s dismissal of a former employee’s claim of wrongful termination in violation of public policy. The case is Jaeger v. Resources for Human Development, Inc., 605 S.W.3d 586 (Mo. Ct. App. 2020).

Michael Jaeger (“Jaeger”) was a former employee of Resources for Human Development, Inc. (“RHD”)—a not-for-profit corporation that provides services to individuals who need continuing care due to developmental disability. RHD receives taxpayer funding through Developmental Disability Services of Jackson County (“EITAS”).

Jaeger filed a Petition against RHD, alleging he was wrongfully terminated for refusing to carry out RHD’s instructions to restrict a certain client’s conduct, contact, and communication with other individuals, including the client’s girlfriend, without following the due process and procedure outlined by EITAS.

In his Petition, Jaeger alleged, in relevant part, the following: EITAS was created by state law and oversees the care provided to developmentally disabled individuals. It has the power to strip RHD of funding and monitors RHD’s compliance with its funding requirements and legal obligations. Among other things, EITAS requires RHD to provide clients with due process, including a hearing, prior to stripping a client of certain civil rights.

Jaeger alleged, prior to his termination, he reported RHD’s illegal instruction to restrict the client. EITAS took this report and found RHD’s actions to be illegal. EITAS directed RHD to cease violating the client’s rights. Jaeger was terminated shortly thereafter.

In response to this Petition, RHD filed a motion to dismiss Jaeger’s wrongful termination claims. The trial court granted the motion and Jaeger appealed. On appeal, the Western District began its legal analysis by noting that a wrongful termination claim in violation of public policy “must be based on a constitutional provision, a statute, a regulation based on a statute, a rule created by a governmental body, the judicial decision of state and federal courts, the constant practice of government officials, and, in certain instances, professional codes of ethics.” 605 S.W.3d at 590-91.

However, the Court further noted, “[a] plaintiff need not rely on an employer’s direct violation of a statute or regulation.” Id. at 591 (citing Fleshner v. Pepose Vision Institute, P.C., 304 S.W.3d 81, 96 (Mo. banc 2010)). Instead, public policy need only be reflected by such a provision. Id. “Moreover, there is no requirement that the violation that the employee reports affect the employee personally, nor that the law violated prohibit or penalize retaliation against those reporting its violations.” Id.

Under the alleged facts of this case, the Court found Jaeger met these requirements, because, per his allegations, EITAS—a governmental body—investigated and agreed with his report that RHD had violated its rules and the client’s rights.

RHD, nonetheless, attempted to argue it did not have sufficient notice of the alleged illegal conduct and that the case could be analogized to another case—Margiotta v. Christian Hosp. N.E. N.W., 315 S.W.3d 342, 345 (Mo. banc 2010)—wherein a court found a requirement for a patient to “receive care in a safe setting” as “too vague to support [the employee’s] wrongful discharge action.” Id.

The Western District swiftly rejected these defenses. It first noted RHD received notice of its alleged illegal conduct before terminating Jaeger. It then distinguished Margiotta both factually and procedurally, as that decision came after the parties engaged in discovery and involved attenuated reliance by the employee on regulations that were not directly applicable, unlike the present case. The Court further stressed that this case did not involve a mere belief of legal violations or violations of public policy; instead, it involved allegations that such violations were actually found.

The ultimate outcome of this case upon remand to the trial court remains to be seen. This case pertains to wrongful discharge claims in violation of public policy prior to the recent enactment of the Whistleblower Protection Act (“WPA”) in Missouri, so its applicability and reach is likely limited. See § 285.575 RSMo. Nonetheless, it clarifies important principles of law applicable to such claims to the extent they are still being litigated, as such claims may take several years to reach a conclusion. Stay tuned for further developments.