Dolan v. Continental Airlines/Continental Express
563 N.W.2d 23, 12 I.E.R. Cas. (BNA) 1631, 454 Mich. 373 (1997)
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Rule of Law:
The Michigan Whistleblowers' Protection Act (WPA) protects employees who report or are perceived to report violations of law, even if those violations are committed by third parties and not the employer, provided the reported activity is sufficiently connected to the employment setting; however, general employer policy manuals do not automatically create an express or implied contract for just-cause employment, nor a legitimate expectation of such, if the language does not clearly and unambiguously indicate such intent.
Facts:
- Plaintiff worked as a ticketing agent for Continental Express at the Capitol City Airport in Lansing, Michigan.
- In early 1991, during the Persian Gulf War, plaintiff and her colleagues were instructed by their employer to be alert for individuals fitting a profile related to drug trafficking or terrorist activities.
- In January or February 1991, plaintiff and a coworker reported individuals fitting the profile to airport security, which led to a Federal Drug Enforcement Agency (DEA) arrest.
- Plaintiff subsequently contacted authorities again to report another individual she believed fit the profile, and the DEA assured her she would be rewarded.
- On February 10, 1991, Continental Express's general manager posted a written notice directing employees to obtain management approval before contacting authorities to report suspected individuals.
- One month later, plaintiff was approached by the general manager and questioned if she had contacted the DEA after February 10, 1991, which she denied, and was sent home pending an investigation.
- Continental Express's investigation allegedly unearthed two individuals who provided written statements indicating that plaintiff had reported two passenger names to the DEA after February 10, 1991.
- Plaintiff admitted to contacting the DEA after February 10, 1991, but insisted it was only to inquire about the status of her reward, not to report new passenger names; her employment was subsequently terminated based on allegations of contacting the DEA without approval.
Procedural Posture:
- Plaintiff filed an original complaint in circuit court alleging wrongful discharge under the Michigan Whistleblowers’ Protection Act (WPA) and breach of contract principles.
- The circuit court granted defendant Continental Express’s motion for summary disposition on the WPA claim.
- Plaintiff then filed an amended complaint, adding a new charge of wrongful discharge from employment in violation of public policy.
- Defendant Continental Express again sought dismissal of plaintiff's claims under MCR 2.116(C)(8).
- Plaintiff filed a motion for relief from the circuit court’s October 10, 1991, order granting defendant summary disposition on the WPA claim.
- The circuit court consolidated these matters, granted defendant Continental Express’s motion to dismiss plaintiff’s first amended complaint with prejudice, and denied plaintiff’s motion for relief from the prior WPA summary disposition order.
- The Court of Appeals affirmed the circuit court's decisions.
- The Michigan Supreme Court granted leave to appeal.
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Issue:
1. Does the Michigan Whistleblowers' Protection Act (WPA) protect an employee who reports or is perceived to report a violation of law by a third party, where the reported activity is connected to the employment setting? 2. Can an employer's general disciplinary policies, as outlined in a human resources manual, create an express or implied contract for just-cause employment or a legitimate expectation of such, if the policies also include disclaimers and non-exclusive lists of offenses?
Opinions:
Majority - Boyle, J.
Yes, the Michigan Whistleblowers' Protection Act (WPA) protects an employee who reports or is perceived to report a violation of law by a third party when that activity is connected to the employment setting. No, an employer's general disciplinary policies do not, as a matter of law, create an express or implied contract for just-cause employment or a legitimate expectation of such if the policies are not clearly and unambiguously expressed. The Court found that a plain reading of the WPA, consistent with its purpose to encourage employees to assist law enforcement and protect public health and safety, does not limit protection to reports of employer violations alone. Relying on Dudewicz v Norris Schmid, Inc., the Court reiterated that the WPA applies even if the violation is by fellow employees or, as in this case, third parties, as long as there is a sufficient connection to the employment setting. Here, the reports were made on company premises during business hours, and the employer even issued a directive regarding reporting to the DEA, which strongly indicated a connection to the employment setting. The Court affirmed dismissal of the public policy claim because the WPA provides the exclusive remedy for such retaliatory discharge. Regarding the breach of contract claim, the Court affirmed that plaintiff failed to state a claim. Michigan law presumes employment is at-will unless there are 'distinguishing features' to the contrary. While company policies can create enforceable rights under Toussaint v Blue Cross & Blue Shield of Michigan, the language must clearly and unambiguously indicate an intent to create a just-cause employment relationship. Defendant's Human Resources Policy Manual, which outlined a progressive disciplinary system and listed infractions that may warrant dismissal, also explicitly stated that the list was non-exclusive and that certain situations might require more severe action. Such a non-exclusive list of common-sense rules, as established in Rood v General Dynamics Corp, reserves the employer's right to discharge an employee at will and does not create a legitimate expectation of just-cause employment.
Analysis:
This case significantly broadens the scope of protection under the Michigan Whistleblowers' Protection Act by clarifying that it extends to employees who report violations by third parties, not just employers or fellow employees, provided the activity is related to the employment context. This reinforces the public policy goal of encouraging whistleblowing for public safety and assisting law enforcement. Simultaneously, the decision reaffirms the stringent requirements for overcoming the presumption of at-will employment in Michigan, emphasizing that employer policy manuals must contain clear and unambiguous language to create contractual rights for just-cause termination, particularly when a non-exclusive list of offenses is provided.
