Smith v. Gentiva Health Services (USA) Inc.
296 F. Supp. 2d 758, 2003 WL 23018268 (2003)
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Rule of Law:
Under the Michigan Whistleblower’s Act, to establish a prima facie case of retaliatory constructive discharge, an employee must show they engaged in protected activity (which includes reporting or being about to report a suspected violation to a public body, requiring objective notice to the employer), suffered a constructive discharge (objectively compelled resignation due to severe employer conduct), and a causal connection between the protected activity and discharge.
Facts:
- On or about March 5, 2002, nurses Georgia Smith and Pam Baumgardner were ordered by their immediate supervisor, Bette Dejanovich, to alter patient medical care records, which they believed was a violation of the law.
- On March 10 or 11, 2002, Georgia Smith called Gentiva’s corporate compliance hotline, alleging she had been asked to change information on a patient’s chart.
- On or about March 12, 2002, Pam Baumgardner called Gentiva’s corporate compliance hotline, alleging she had been asked to add additional information to the same patient’s medical chart.
- In early April 2002, Georgia Smith experienced a reduction in her assigned patient visits and subsequently applied for a position with a new company on April 17, 2002.
- On April 30, 2002, both Georgia Smith and Pam Baumgardner contacted an investigator with the Michigan Department of Consumer and Industry Services (CIS) about the alleged request to alter a patient’s chart.
- On May 7, 2002, the new company sent a letter to Georgia Smith confirming her acceptance of their offer of employment.
- Bette Dejanovich of Gentiva stated she first learned of the complaint to the State’s CIS on May 11, 2002.
- Georgia Smith resigned her employment with Gentiva on May 16, 2002, and Pam Baumgardner resigned on May 15, 2002, both asserting they did so because their work assignments had been sharply reduced in retaliation for their reports.
Procedural Posture:
- Plaintiffs Georgia Smith and Pam Baumgardner brought suit against their former employer, Gentiva, in U.S. District Court for the Eastern District of Michigan, alleging constructive discharge as retaliation for reporting a possible Medicaid violation under the Michigan Whistleblower’s Act.
- Defendants (Gentiva) moved for summary judgment.
- Plaintiffs moved for partial summary judgment.
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Issue:
Does a genuine issue of material fact exist regarding whether plaintiffs engaged in protected activity, suffered a constructive discharge, and established a causal connection between the protected activity and their alleged constructive discharge under the Michigan Whistleblower's Act, thereby precluding summary judgment?
Opinions:
Majority - FEIKENS, District Judge
No, a genuine issue of material fact exists regarding whether plaintiffs engaged in protected activity, suffered a constructive discharge, and established a causal connection for plaintiff Baumgardner, but not for retaliation evidence prior to May 11, 2002, and there is also a material dispute regarding constructive discharge for plaintiff Smith, thus precluding a full grant of summary judgment for either party on the main case. The court found that a material issue of fact existed as to whether supervisor Bette Dejanovich actually requested the plaintiffs to make unlawful alterations to a medical chart, as intentionally placing misleading information in patient records is a Michigan felony, creating a reasonable perception of illegality. Therefore, the question of whether plaintiffs engaged in protected activity must proceed to trial. Regarding constructive discharge, the court reasoned that a significant reduction in an employee's hours, to the extent that the job no longer provides a sufficient living, could compel a reasonable person to resign. Given conflicting evidence regarding whether such reductions occurred, this issue also presented a material dispute precluding summary judgment. For the causal connection, the court clarified that to trigger the 'about to report' protection of the Michigan Whistleblower’s Act, an employer must have objective notice of a threat to report to a public body, not merely an internal compliance hotline. Since Gentiva only received notice of the complaint to the State CIS on May 11, 2002, any alleged retaliatory acts occurring before this date were deemed irrelevant. For Pam Baumgardner, her claim in her resignation letter that her workload was not increased after May 11, contrary to past practice, created a material issue of fact. For Georgia Smith, despite accepting a new job before Gentiva had notice of the state complaint, conflicting evidence (her history of holding multiple jobs and ambiguity about the full-time nature of the new position) created an inference that she might have intended to supplement, rather than entirely replace, her Gentiva employment, thus presenting a material dispute regarding the cause of her resignation. Finally, while defendants offered legitimate, non-retaliatory reasons for schedule changes (e.g., Smith considered a 'new' RN, vacation), plaintiffs presented evidence suggesting these reasons were pretextual, further solidifying the presence of material factual disputes. Consequently, summary judgment was denied for both parties on the main case, though defendants were granted summary judgment regarding the irrelevance of alleged retaliation evidence predating May 11, 2002.
Analysis:
This case provides an important illustration of the elements required to establish a prima facie case under the Michigan Whistleblower’s Act, particularly in the context of 'constructive discharge' and the 'about to report' clause. It emphasizes that while an employee's subjective belief of an illegal act is considered, the employer must have objective notice of a threat to report to a public body for the 'about to report' protection to apply. The court’s detailed analysis of what constitutes a 'material fact' in summary judgment motions for each element highlights the challenges employees face in proving retaliation and provides guidance on the type of evidence necessary to move beyond summary judgment. The ruling also underscores the critical importance of timing in whistleblower cases, limiting the period during which alleged retaliatory acts can be considered.
