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Harper v. University of Louisville

Supreme Court of Kentucky

November 1, 2018

LAUREL HARPER AND MICHAEL A. AUGUSTUS APPELLANTS
v.
UNIVERSITY OF LOUISVILLE APPELLEE

          ON REVIEW FROM COURT OF APPEALS CASE NOS. 2014-CA-000668-MR, 2014-CA-000724-MR JEFFERSON CIRCUIT COURT NO. 1 l-CI-005294

          COUNSEL FOR APPELLANTS: Kevin Crosby Burke Jamie Kristin Neal Burke Neal PLLC Michael Augustus

          COUNSEL FOR APPELLEE: Randall Scott Strause Courtney Graham Strause Law Group PLLC

          OPINION

          VENTERS JUSTICE.

         Appellant Laurel Harper brought an action in the Jefferson Circuit Court alleging that she was wrongfully terminated from her employment with Appellee, University of Louisville (the University), in violation of the Kentucky Whistleblower Act (KWA), KRS 61.101-61.103. Following a jury trial, Appellant was awarded damages in the form of back pay and mental anguish, plus interest and attorneys' fees. The trial court denied Harper's claim for front pay. The Court of Appeals reversed the judgment upon its conclusion that the University was entitled to a directed verdict dismissing Harper's entire whistleblower action as unsupported by sufficient evidence.

         We granted discretionary review of that decision. For the reasons stated below, we reverse the Court of Appeals and remand the matter to the Court of Appeals for resolution of issues raised therein, but unresolved.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Harper began her employment at the University's Office of Communications and Marketing (OCM) in 1999. She worked there until February 2011. In 2007, the University began plans for a reorganization and reduction-in-force (RIF) of the OCM. In 2008, Mary Griffith, Senior Associate Vice President in the OCM, became Harper's immediate supervisor, and her duties included responsibility for the OCM reorganization.

         As further discussed below, in 2009 and 2010 Harper expressed several concerns about what she perceived as excessive expenditures, waste, and mismanagement at the OCM. Harper also complained of nepotism based upon Griffith's hiring of her niece and the alleged favoritism Griffith displayed toward her niece in the workplace. Griffith's reorganization of the OCM ultimately led to the elimination of seven positions, including Harper's job as Director of Content Management. The elimination of Harper's position was announced in December 2010. Harper's last day of work was February 3, 2011.

         Harper filed suit against the University alleging age discrimination, sex discrimination, hostile work environment, retaliatory discharge, and violations of the Kentucky Whistleblower Act. Harper's age discrimination, hostile work environment, and retaliatory discharge claims were dismissed on summary judgment prior to trial. The case proceeded to trial on her whistleblower and sexual discrimination claims. The jury rejected Harper's claim of sexual discrimination, but it agreed that her job was eliminated in retaliation for her numerous complaints to University officials about suspected wasteful spending. The jury awarded Harper $226, 409 in back pay and $201, 000 for mental anguish; the trial court entered judgment accordingly.

         The trial court denied the University's post-trial motions and Harper's motion for an award of front pay. The trial court also awarded Harper attorneys' fees in the sum of $131, 362.00 and court costs of $1, 996.19. The Court of Appeals reversed the judgment upon its conclusion that the evidence was insufficient to support the jury's verdict on whistleblower liability.

         II. ANALYSIS

         The primary issue is whether the evidence at trial was sufficient to support the judgment entered upon the jury's verdict. Our role as an appellate court is limited to determining whether the trial court erred in failing to grant the motion for directed verdict. Lewis v. Bledsoe Surface Min. Co., 798 S.W.2d 459, 461 (Ky. 1990). A trial court considering a motion for a directed verdict in a civil action "must consider the evidence in its strongest light in favor of the party against whom the motion was made and must give him the advantage of every fair and reasonable intendment that the evidence can justify." Sutton v. Combs, 419 S.W.2d 775, 777 (Ky. 1967). "On appeal the appellate court considers the evidence in the same light." Id. (citations omitted). "A directed verdict is proper only when there is a complete absence of pleading or proof on a material issue in the action, or there is no disputed issue of fact upon which reasonable men could differ." Id.; see also Fleming v. EOT Gathering, LLC, 509 S.W.3d 18, 21 (Ky. 2017).

         On appellate review, "all evidence which favors the prevailing party must be taken as true and the reviewing court is not at liberty to determine credibility or the weight which should be given to the evidence, these being functions reserved to the trier of fact." Lewis, 798 S.W.2d at 461. "A motion for directed verdict admits the truth of all evidence which is favorable to the party against whom the motion is made." National Collegiate Athletic Ass'n By and Through Bellarmine College v. Hornung, 754 S.W.2d 855, 860 (Ky. 1988).

         Harper argues that the jury verdict should be reinstated because the Court of Appeals erred in its conclusion that the evidence at trial did not sufficiently establish that Harper's disclosures were protected by the whistleblower act; she argues that the Court of Appeals failed to give sufficient deference to the trial court's decision denying a directed verdict. We begin our analysis with a general review of the Kentucky Whistleblower Act. We then examine the seven instances in which Harper contends she made disclosures that qualified for KWA protection.

         A. The Kentucky Whistleblower Act.

         The Kentucky Whistleblower Act (KWA) serves the remedial purpose of protecting "employees who possess knowledge of wrongdoing that is concealed or not publicly known, and who step forward to help uncover and disclose that information." Davidson v. Com., Dep't. of Military Affairs, 152 S.W.3d 247, 255 (Ky. App. 2004) (quoting Meuwissen v. Dep't. of Interior, 234 F.3d 9, 13 (Fed. Cir. 2000)). Because the KWA serves the public purpose of identifying governmental wrongdoing, it must "be liberally construed to serve that purpose." Workforce Dev. Cabinet v. Gaines, 276 S.W.3d 789, 793 (Ky. 2008). KRS 61.102(1) sets forth the essential elements of a whistleblower violation:

No employer shall subject to reprisal, or directly or indirectly use, or threaten to use, any official authority or influence, in any manner whatsoever, which tends to discourage, restrain, depress, dissuade, deter, prevent, interfere with, coerce, or discriminate against any employee who in good faith reports, discloses, divulges, or otherwise brings to the attention of the Kentucky Legislative Ethics Commission, the Attorney General, the Auditor of Public Accounts, the Executive Branch Ethics Commission, the General Assembly of the Commonwealth of Kentucky or any of its members or employees, the Legislative Research Commission or any of its committees, members or employees, the judiciary or any member or employee of the judiciary, any law enforcement agency or its employees, or any other appropriate body or authority, any facts or information relative to an actual or suspected violation of any law, statute, executive order, administrative regulation, mandate, rule, or ordinance of the United States, the Commonwealth of Kentucky, or any of its political subdivisions, or any facts or information relative to actual or suspected mismanagement, waste, fraud, abuse of authority, or a substantial and specific danger to public health or safety. No employer shall require any employee to give notice prior to making such a report, disclosure, or divulgence.

         There is no question in this case that Harper qualifies as an "employee" and that the University of Louisville is an "employer" under the statute. Pursuant to KRS 61.103(1)(a), "'Disclosure'" means a person acting on his own behalf, or on behalf of another, who reported or is about to report, either verbally or in writing, any matter set forth in KRS 61.102."

         KRS 61.103(3) contains a burden-shifting provision which provides that if the KWA plaintiff shows by a preponderance of evidence that the disclosure was a "contributing factor in the [adverse] personnel action," the "burden of proof shall be on the agency to prove by clear and convincing evidence that the disclosure was not a material fact in the personnel action." "Contributing factor" means

any factor which, alone or in connection with other factors, tends to affect in any way the outcome of a decision. It shall be, presumed there existed a "contributing factor" if the official taking the action knew or had constructive knowledge of the disclosure and acted within a limited period of time so that a reasonable person would conclude the disclosure was a factor in the personnel action.

KRS 61.103(1)(b).

         Because the federal and Kentucky whistleblower legislation is similar, we have routinely looked to the federal courts' interpretation of the corresponding federal whistleblower statute as persuasive authority. Dep't. of Agric. v. Vinson, 30 S.W.3d 162, 169 (Ky. 2000); Davidson, 152 S.W.3d at 255; Gaines, 276 S.W.3d 789.

         Several additional essential principles have evolved defining the reach of the whistleblower statute which we apply in our discussion below. First, the "disclosure" of information which is public information or otherwise already widely known within the organization cannot qualify as a whistleblower disclosure. The statute protects the whistleblower who exposes information not generally known. Moss v. Kentucky State University, 465 S.W.3d 457 (Ky. App. 2014).

         Second, complaints by an employee directly to her supervisor concerning the supervisor's own wrongful conduct generally cannot qualify as a whistleblower disclosure. Pennyrile Allied Community Services, Inc. v. Rogers, 459 S.W.3d 339, 345 (Ky. 2015).

         Third, the disclosure must be made to one of the specific qualifying authorities identified within the statute, or to "any other appropriate body or authority." "The list of entities in KRS 61.102(1) is not limited to those with investigatory authority. Instead, the list encompasses those who may have authority to remedy or report perceived misconduct in a particular situation." Gaines, 276 S.W.3d at 793. "[A]ny other appropriate body or authority" means

any public body or authority with the power to remedy or report the perceived misconduct. This interpretation serves the goals of liberally construing the Whistleblower Act in favor of its remedial purpose, and of giving words their plain meaning. Generally, the most obvious public body with the power to remedy perceived ...

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