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Greissman v. Rawlings and Associates, PLLC

Supreme Court of Kentucky

April 18, 2019



          COUNSEL FOR APPELLANT: Alton D. Priddy David Lindsay Leightty Alison M. Messex PRIDDY, CUTLER, NAAKE & MEADE, PLLC

          COUNSEL FOR APPELLEE: Jordan White Mitzi Denise Wyrick WYATT, TARRANT & COMBS, LLP



         Absent an employment contract, Kentucky adheres to the doctrine of employment-at-will by which an employer may terminate an employee's employment for any or no reason. An exception to this rule exists when the termination violates public policy as expressed by the employee's exercise of a constitutional or statutory right, which may give rise to an action for wrongful termination. In this case, Carol Greissman, a licensed attorney in Kentucky, was terminated by Rawlings and Associates, PLLC (hereinafter, "Rawlings & Associates") for refusing to sign an agreement providing, inter alia, for nonsolicitation of Rawlings & Associates' customers or clients following cessation of employment. Greissman's refusal was based on her belief that the provision violated a Rule of Professional Conduct prohibiting non-competition agreements between lawyers and law firms. SCR[1] 3.130, Rule 5.6. The primary issue we must resolve in this case is whether the Court of Appeals erred in opining that the Rules of the Kentucky Supreme Court do not establish public policy which in turn may form a basis for a wrongful termination claim. We hold that the Court of Appeals erred in holding that Greissman's complaint should have been dismissed for failure to state a claim, but nonetheless affirm on other grounds. The Oldham Circuit Court properly granted summary judgment in favor of Rawlings 85 Associates since the agreement at issue contained a savings clause which excepted the solicitation of legal work from coverage "to the extent necessary to comply with rules of professional responsibility applicable to attorneys." Thus, we agree with the circuit court that the agreement furnished to Greissman for signature did not violate SCR 3.130, Rule 5.6 as a matter of law.

         I. Factual and Procedural Background.

         Rawlings & Associates, a law firm that practices in the area of health care subrogation, employed Greissman as a subrogation analyst from June 1997 through September 21, 2011, when it terminated her employment.[2] The event that led to termination of her employment was that Rawlings & Associates presented Greissman, as well as to its other employees, an agreement that included a covenant not to solicit, contact, interfere with, or attempt to divert any of Rawlings & Associates' customers or potential customers after ceasing employment with Rawlings & Associates.[3] The version of the agreement presented to the attorneys was the same as the non-attorney version, except in the attorney version the non-solicitation paragraph was preceded by a "savings clause" exempting the solicitation of legal work from coverage under the non-solicitation clause. The agreements were distributed to all Rawlings Group employees, who were given time to review and sign. After consulting with her personal attorney, Greissman refused to sign the attorney version of the agreement, due to her belief that its terms violated SCR 3.310, Rule 5.6, which prohibits an attorney from agreeing to restrict his or her practice after leaving an employer, with limited exceptions. Rawlings & Associates thereafter terminated Greissman's employment.

         Greissman filed suit against Rawlings 85 Associates alleging she had been wrongfully terminated in violation of public policy and sought damages and restoration of her former position. In lieu of an answer, Rawlings 85 Associates filed a motion to dismiss on grounds that SCR 3.130, Rule 5.6 was not a public policy embodied in a statutory or constitutional provision and therefore, under Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky. 1985), Greissman's complaint failed to state a claim upon which relief could be granted. The circuit court denied Rawlings 86 Associates' motion to dismiss and held that an obligatory Rule of Professional Conduct, as established by the Kentucky Supreme Court, falls within the public policy exception for purposes of a wrongful termination claim and that Greissman's cause of action could proceed.

         Rawlings 86 Associates filed an answer to Greissman's complaint and discovery ensued. Greissman filed a motion for partial summary judgment on the issue of liability, arguing that the savings clause in the agreement did not cure the violation of the Rules and that her good faith, reasonable belief that a violation occurred was enough to save her wrongful termination claim; she did not need to prove an actual violation. In turn, Rawlings 8s Associates sought dismissal of Greissman's complaint on summary judgment grounds, asserting that the savings clause in the non-solicitation section removed the agreement from the purview of SCR 3.130, Rule 5.6 since the agreement only restricted disclosure of confidential information and the solicitation of non-legal business; it did not restrict an attorney's ability to practice law. Rawlings & Associates also argued that no public policy exception exists upon which Greissman could base her claim for wrongful termination since she failed to allege a constitutional or statutory violation.

         The circuit court, while recognizing Greissman's claim as cognizable, nonetheless held that the agreement did not violate the Rules of Professional Conduct since the savings clause would have protected Greissman from any violation of the Rules had she signed it. Furthermore, the circuit court determined that Greissman's belief that the agreement violated the Rules of Professional Conduct was insufficient to rescue her wrongful termination claim. Accordingly, the circuit court denied Greissman's motion for partial summary judgment and granted summary judgment in favor of Rawlings & Associates.

         Greissman appealed that decision and Rawlings 85 Associates cross-appealed from the circuit court's earlier order denying its motion to dismiss. The Court of Appeals upheld the circuit court's ultimate decision dismissing Greissman's complaint, but ruled that SCR 3.310, Rule 5.6 did not provide the public policy to support Greissman's wrongful termination claim and thus the circuit court should have granted Rawlings 86 Associates' motion to dismiss. Greissman petitioned this Court for discretionary review, which we granted.

         II. Standard of Review.

         We review a circuit court's ruling on a motion to dismiss and a motion for summary judgment de novo, owing no deference to the circuit court on a question of law. Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010); Blackstone Mining Co. v. Travelers Ins. Co., 351 S.W.3d 193, 198 (Ky. 2010).

         III. ...

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