Mariani v. Rocky Mountain Hospital & Medical Service
902 P.2d 429, 1994 WL 716916 (1995)
Rule of Law:
An at-will employee may bring a claim for wrongful discharge in violation of public policy if terminated for refusing to perform an illegal act directed by the employer that would violate a specific statute or undermine a clearly expressed public policy, even if not ultimately responsible for the act or reassigned beforehand. However, an employee handbook does not create an implied contract of employment if it contains clear disclaimers that employment is at-will and the disciplinary procedures are discretionary.
Facts:
- Diana Mariani, a licensed certified public accountant, was employed by Rocky Mountain Hospital and Medical Service (Blue Cross) as Manager of General Accounting.
- Samuel Weidman was hired as Controller and became Mariani's supervisor, reassigning her to Manager of General Accounting and Special Projects.
- Mariani was assigned to work on a proposed 'merger' among Colorado, New Mexico, and Nevada Blue Cross entities and was directed to analyze and project 'benefits' for Colorado Blue Cross, with an implicit threat to her continued employment if she failed.
- In her accounting duties, Mariani discovered several alleged improprieties, including the insolvency of New Mexico and Nevada entities without Colorado Blue Cross loans, failure to properly report loans to insurance regulators, improper retention of national discount funds, improper tax credits, and failure to report employee insurance premiums on tax forms.
- Mariani reported these discrepancies and alleged illegal activities to her superiors and was often directed to alter reports, cease work on projects, or was advised that no corrective action would be taken.
- Mariani was terminated approximately six months after Weidman became her supervisor, with the stated reason that her job was being eliminated.
Procedural Posture:
- Diana Mariani sued Rocky Mountain Hospital and Medical Service and Samuel Weidman in a trial court for wrongful discharge (implied contract and public policy), promissory estoppel, and outrageous conduct.
- Following the presentation of Mariani's evidence, the trial court dismissed all of her claims except the outrageous conduct claim against Weidman.
- The jury entered a verdict in favor of Weidman on the outrageous conduct claim.
- The trial court entered a directed verdict against Mariani on her claims for wrongful discharge based on implied contract and public policy.
- The trial court dismissed Mariani's promissory estoppel claim, treating it as an equitable claim for resolution by the court.
- Mariani appealed the judgment entered on the directed verdict in favor of defendants on her implied contract and public policy claims, and the dismissal of her promissory estoppel claim to the Colorado Court of Appeals.
- Defendants cross-appealed the trial court’s order limiting the award of costs incurred in the litigation.
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Issue:
Does an at-will employee establish a claim for wrongful discharge in violation of public policy if they present evidence that they were terminated for objecting to or refusing to participate in actions directed by the employer that the employee reasonably believed to be illegal or contrary to a clearly expressed public policy, even if the employee was not ultimately responsible for the illegal act or was reassigned before termination?
Opinions:
Majority - Judge Ruland
Yes, an at-will employee establishes a claim for wrongful discharge in violation of public policy if they present evidence that they were terminated for objecting to or refusing to participate in actions directed by the employer that the employee reasonably believed to be illegal or contrary to a clearly expressed public policy, even if the employee was not ultimately responsible for the illegal act or was reassigned before termination. The court applied the four-part test from Martin Marietta Corp. v. Lorenz. Mariani's evidence satisfied the second element, as the Colorado State Board of Accountancy Rules of Professional Conduct Rule 7.3 prohibited her from knowingly misrepresenting facts, thus establishing a public policy against deception. The court clarified that it is unnecessary for the actions to always violate a specific statute, as undermining the principles governing a certified public accountant's obligations is sufficient. The court also held that an employer cannot evade liability for the third element (termination for refusal) by claiming the employee was not ultimately responsible for a false report or by reassigning an objecting employee to other duties before termination. However, the court affirmed the dismissal of Mariani's claims for breach of implied contract and promissory estoppel. The alleged promises independent of the 'You Book' did not establish a specific term of employment, thus preserving her at-will status. The 'You Book' itself did not create an implied contract because Mariani had previously signed a confidentiality agreement acknowledging at-will employment, and the 'You Book' contained a conspicuous disclaimer stating it was 'not a contract or a guarantee of employment.' Furthermore, the disciplinary procedures within the manual used the discretionary term 'may' rather than mandatory language, and Mariani's evidence that supervisors treated procedures as mandatory was too vague. For the promissory estoppel claim, the trial court properly characterized it as an equitable claim for the court, not a jury, to decide. The trial court's findings, based on credibility, that Mariani's training and education indicated her understanding of at-will employment and thus negated her reasonable reliance on alleged promises or the handbook, were supported by the record and affirmed.
Analysis:
This case significantly clarifies the public policy exception to at-will employment in Colorado, particularly for professional employees with ethical obligations, by broadening the interpretation of what constitutes 'violating a specific statute' to include actions that undermine clearly expressed public policy, such as professional codes of conduct. It strengthens whistleblower protections by preventing employers from evading liability through procedural maneuvers like reassigning an objecting employee or claiming the employee lacked ultimate responsibility. Conversely, the ruling reinforces the strict requirements for establishing implied contracts from employee handbooks, underscoring the importance of clear disclaimers and mandatory language to overcome the presumption of at-will employment.
