One Court of Justice

The plaintiff was employed by the city of Burton as the chief of police from 2002 until 2007, when the mayor of Burton did not reappoint him.  Plaintiff brought a retaliation claim against the city and the mayor in his individual capacity under the Whistleblowers’ Protection Act (WPA), which protects an employee against an employer’s retaliatory employment actions, when the employee engaged in protected activity.  Plaintiff claimed that the mayor’s decision not to reappoint him was because Plaintiff made repeated complaints that the refusal to pay his previously accumulated unused sick and personal leave time would violate a city ordinance.  After the jury returned a verdict in favor of plaintiff, the trial court denied the defendants’ motion for judgment notwithstanding the verdict (JNOV).  The Michigan Supreme Court, in Whitman v. City of Burton, determined that the Court of Appeals erred when it reversed the trial court’s denial of defendants’ motion for JNOV.  The Court of Appeals, in a split published opinion, held that as a matter of law, plaintiff’s claim was not actionable under the WPA because he did not act with a desire to inform the public on matters of public concern, but instead acted to advance his own financial interests.  The Michigan Supreme Court interpreted the plain language of the WPA, MCL 15.362 in particular, and concluded that nothing in the statutory language addresses an employee’s motivation, nor does it mandate that an employee’s primary motivation be a desire to inform the public of matters of public concern.  Further, the Michigan Supreme Court held that to the extent its decision in Shallal v. Catholic Social Servs of Wayne Co, 455 Mich 604; 566 N.W.2d 571 (1997) has been interpreted to mandate specific motive requirements, it is disavowed.  The Michigan Supreme Court remanded the case to the Court of Appeals for consideration of all remaining issues, including whether the causation element of MCL 15.362 has been met.

In Badeen v. Par, Inc., plaintiffs failed to file their motion for class certification within 91 days of the complaint in which they first made class allegations.  But the motion was filed with 91 of plaintiffs’ amended complaint.  The trial court denied the motion as untimely and struck the class allegations.  The Court of Appeals disagreed, holding that the 91-day clock runs from the most recently filed complaint.  Under that standard, the motion was timely.

However, the Court of Appeals affirmed the trial court’s dismissal of the lawsuit on the merits.  At issue in the lawsuit was lenders’ practice of hiring middlemen to handle collection on automobile loans.  The middleman would then hire plaintiffs (and similarly situated persons) to perform the actual repossession of the automobiles.  Plaintiffs complained that this lowered their compensation and was in violation of the Occupational Code, suing both the middlemen and the lenders.  The trial court granted summary disposition in favor of defendants because there was no violation of the Occupational Code.  The Court of Appeals agreed.  Because the middlemen were not actually engaged in the collection of the delinquent loans, they did not need to be licensed collection agencies under the Occupational Code.

In a technically-unanimous opinion, the Michigan Supreme Court reversed the Court of Appeals and remanded a Whistleblowers’ Protection Act (WPA) case for reinstatement of a trial verdict for plaintiff.  It was technically unanimous since Justice Zahra did not participate because he was on the Court of Appeals’ panel that reversed the trial court’s denial of summary disposition to defendants, and Justice McCormack did not participate, presumably since argument occurred before her tenure began.

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Governor Snyder has exercised his constitutional authority to ask the Michigan Supreme Court to issue an advisory opinion regarding the constitutionality of Michigan’s new right-to-work legislation.  That legislation, set to take effect on March 27, 2013, prevents employers from requiring employees to join a union as a condition of employment.  If the Michigan Supreme Court accepts the request, the Snyder administration will have succeeded in significantly reducing the time it takes to resolve constitutional challenges to the legislation. 

The advisory-opinion request identifies four questions of statewide importance:

1. Whether the right-to-work legislation applying to public employers “interferes with the authority of the Civil Service Commission” and therefore “is not lawfully binding on the classified state civil service”?
2. If the right-to-work legislation is not binding on the classified civil service, does the legislation violate the Michigan and federal constitutional requirements of equal protection of the law because the legislation does not apply to state classified employees but does apply to other employees?
3. Does the legislation violate equal protection of the law because it does not apply to all employees in public or private sector bargaining units?
4. Does the right-to-work legislation applicable to public employers violate the Michigan Constitution’s prohibition on changing the purpose of a law after its original passage by either house of the Michigan legislature? 

Governor Snyder’s request indicates that an advisory opinion is necessary because the State’s collective-bargaining agreements expire on December 31, 2013.  Contract negotiations are likely to start this summer.  Governor Snyder is asking that the Court issue an advisory opinion before negotiations begin so that all parties know whether the right-to-work legislation will apply to all state employees.

In Cuddington v United Health Services, Inc, a former United Health Services (“UHS”) employee claimed that he had been fired for seeking medical treatment for a work-related injury.  The Court of Appeals held that employees have a right under the Worker’s Disability Compensation Act (“WDCA”) to seek medical treatment and need not file a workers’ compensation claim before bringing an action to enforce that right. Read more »

In Wurtz v. Beecher Metropolitan District, the Court of Appeals held that failure to renew an employment contract could constitute an “adverse employment action” under the Whistleblower Protection Act (WPA).  The WPA allows an employee to bring an action against his employer or former employer if he was engaged in a “protected activity,” suffers an adverse employment action of dismissal or discrimination, and can show a causal connection between the activity and the adverse employment action.  In this case, the plaintiff was employed under a contract for ten years, during which he repeatedly reported board members’ illegal conduct to the government.  At the end of the contract period, the board voted not to extend the contract.  The Court interpreted the WPA by analogy to the Michigan Civil Rights Act (CRA) and refused to hold that non-renewal of a contract was never an adverse employment action.  Rather, non-renewal may qualify under the WPA in certain circumstances, which must be evaluated by the court on a case-by-case basis.  Because a genuine and material issue remained as to when the employer decided to not renew, and because it was improper to resolve the employer’s motive for not renewing on summary disposition, the Court of Appeals reversed and remanded for further proceedings.

In dissent, Judge Kirsten Frank Kelly argued that no adverse employment action occurred in this case.  The WPA requires an employment relationship at the time of the dismissal or discrimination.  Because the plaintiff’s employment had already terminated under the terms of the contract, he was no longer an employee and thus the failure to extend the contract could not constitute an adverse employment action.  Judge Kelly also asserted that it was erroneous to compare the CRA and the WPA, as the CRA expressly applies to pre-employment conduct while the WPA does not.  Thus, she would have affirmed the trial court’s grant of summary judgment. 

Although sheriffs have the authority to appoint deputies and also have the ability to revoke those appointments at any time, the Veterans Preference Act (VPA) limits that authority when it comes to firing deputies who are honorably discharged veterans.  The Michigan Court of Appeals held in Leelanau County Sheriff v. Kiessel, that under the VPA, honorably discharged veterans serving in public departments may only be discharged for cause and must be given a hearing regarding the discharge.  The court noted, however, that the legislature must respect the sheriff’s discretion in determining the manner in which he delegates authority to deputies.  Thus, the sheriff cannot be compelled to reinstate the deputy’s law enforcement powers.

A person can be judicially estopped from pursuing a sexual harassment claim based on her failure to include the lawsuit as a potential asset in a Chapter 13 bankruptcy proceeding.  In Spohn v. Van Dyke Public Schools, the plaintiff was allegedly sexually harassed from September through December 2008.  She contacted an attorney about the potential sexual harassment claim in January of 2009.  Meanwhile, the plaintiff filed her Chapter 13 bankruptcy plan in December 2008, but did not disclose the potential lawsuit as an asset.  The defendant argued that the plaintiff should be judicially estopped from bringing her claim because she failed to disclose it to the bankruptcy court.  Judicial estoppel prevents a person who has successfully asserted a position in one proceeding from asserting an inconsistent position in a subsequent proceeding.  In this case the plaintiff assumed a position that was contrary to the one she asserted under oath in her bankruptcy proceedings by failing to disclose her sexual harassment claim.  Moreover, the plaintiff was successful in asserting her position because the bankruptcy court adopted her bankruptcy plan.  Lastly, the plaintiff’s omission did not result from mistake or inadvertence.  The plaintiff knew about her potential sexual harassment claim at least one month before her plan was filed, she had a motive to conceal claim, and there was evidence of bad faith because she never made any attempt to amend her bankruptcy plan.  Accordingly, judicial estoppel barred the plaintiff’s sexual harassment claim. 

The Supreme Court granted three applications for leave of significance on March 23, 2012.  The first raises the issue of whether courts may examine a public body’s stated budgetary motive in defending a whistleblower claim, or if separation of powers principle prevents looking into that motive as an alleged pretext.  See Debano-Griffin v. Lake County and Lake County Bd. of Commissioners.  The underlying Court of Appeals opinion may be found here.

The next grant of leave was in Admire v. Auto-Owners Ins. Co., being closely watched on issues of coverage for transportation costs and other issues involving no-fault benefits.  The Court invited amici who have participated thus far to continue through merits briefing.  Those groups include the Michigan Insurance Coalition, the Auto Club Insurance Association, and the Coalition Protecting Auto No-Fault.

The Court also agreed to hear a dispute between Lyon Charter Township (Oakland County) and McDonald’s in a very brief order found here.   The underlying Court of Appeals opinion was published at 292 Mich App 660, and reversed a condemnation award for McDonald’s based on an intangible property interest in a condo unit in a commercial development.  In the case, McDonald’s did receive compensation for a sewer easement taken by the Township but also sought “loss of market advantage” damages.  Judges O’Connell, Saad, and Beckering decided that case, with Judge Beckering concurring in the majority opinion.  Our original post on this can be found here.

The Court also issued five other miscellaneous orders, including one dismissal by stipulation and an extension of time in a  Judicial Tenure Commission case.

In a per curiam decision, the Court of Appeals concluded that the unions representing Central Michigan University’s office professional employees had standing to challenge the University’s “Political Candidacy of Employees” policy in a declaratory judgment action seeking a determination that the policy violated the State’s Political Activities by Public Employee’s Act.  In International Union v. Central Michigan University Trustees, the Court determined that, even though no employee had yet attempted to become a candidate for office – and thus subject to the Policy’s provisions regarding non-interference with their job-functions, there was an actual controversy based upon the Union’s allegations that the Policy violated the Act.  Thus, the court reasoned that allowing this action to go forward on that basis is consistent with the purpose of a declaratory judgment.  Even though the Union had standing, the Court rejected its substantive arguments.  Broadly, the Act prohibits restriction of off-duty political acitivity by a public employee.  In this case, the Court found that because the Policy did not try to regulate off-duty political activity, but instead only regulates an employee’s work to ensure that work is not negatively impacted by the candidacy.  Thus, the Court of Appeals affirmed the trial court’s denial of declaratory and injunctive relief.  Additionally, the Court of Appeals found that the Union lacked standing to challenge the University’s draft procedures to implement its policy on the grounds that those procedures were still drafts and had not been adopted by the University.