The Michigan Supreme Court recently declined to review, and thus affirmed, a Michigan Court of Appeals’ (“COA”) decision in which the COA held that Michigan law allows a cause of action for wrongful termination in violation of public policy under MCL 333.20176a(1)(a) of the Public Health Code, which prohibits discharge of employees reporting malpractice by health professionals. Although the Michigan Supreme Court originally granted the defendant’s application for leave to appeal, the court subsequently vacated and denied the application after being presented with the parties’ briefs and oral arguments. The decision is now binding in Michigan and confirms employers cannot lawfully terminate employees in retaliation for reporting alleged malpractice. A copy of the Michigan Court of Appeals decision can be found here.

Background

The plaintiff, an at-will employee, was employed as a licensed practical nurse by the defendant, a municipal heath facility (“Facility”). The plaintiff filed a report with the Facility’s peer review committee describing a negligent co-worker, whose actions he believed directly led to the death of a patient. Shortly thereafter, the plaintiff was terminated. The plaintiff sued the Facility alleging wrongful discharge in violation of public policy claiming he was retaliated against after filing a report.

In response, the Facility requested the case be dismissed and moved for summary disposition arguing that the plaintiff had not identified: (i) any public policy on which his claim was grounded; or (ii) any law or policy under which his claim could survive. The trial court denied the motion and issued an opinion stating that “Michigan law recognizes a cause of action for wrongful termination in violation of the public policy exhibited by MCL 333.20176a.” The matter proceeded to trial, and the jury reached a verdict in favor of the plaintiff. The Facility filed an appeal with the COA.

Analysis

On appeal, the Facility argued that the trial court erred by failing to properly analyze and apply Michigan law in denying the Facility’s motion for summary disposition. Specifically, the Facility argued that it could lawfully terminate the plaintiff because he was an at-will employee and he did not meet one of the three public policy exceptions to the Michigan at-will employment doctrine. The Michigan Supreme Court previously affirmed three public policy exceptions to the employment at-will doctrine that are: (1) explicit legislative statements prohibiting the discharge, discipline or other adverse treatment of employees who act in accordance with a statutory right or duty; (2) where the alleged reason for the discharge was the failure or refusal of the employee to violate a law in the course or employment; and (3) where the reason for the discharge was the employee’s exercise of a right conferred by a well-established legislative enactment.¹ The COA disagreed with the Facility and found that the plaintiff’s claim fell within both the first and third public policy exceptions to the employment at-will doctrine.

Although the first exception had only been applied by Michigan courts to the Whistleblowers’ Protection Act (“WPA”) and the Michigan Civil Rights Act, the COA found that MCL 333.20176a contains an explicit legislative statement prohibiting discharge or discipline of an employee for specified conduct. Thus, the COA held that the plaintiff’s right to report alleged acts of malpractice under MCL 333.20176a is consistent with, and implicit in, the purposes of the Public Health Code and its statutory regulations governing health care professionals.

Regarding the third exception, the COA acknowledged that the exception had only been applied in the termination of an employee in retaliation for filing a workers’ compensation claim. However, the COA determined that the policy of the workers’ compensation statutes and the statute on which the plaintiff relied (MCL 333.20176a) shared the same underlying purpose. Specifically, both statutes were enacted to promote the welfare of the people of Michigan as each concerns health and safety. Since the statutory basis for the plaintiff’s claim could support a public policy-based wrongful discharge claim, the COA held that the trial court did not err by denying the Facility’s motion for summary disposition.

The Facility also unsuccessfully argued that the plaintiff’s exclusive remedy was under the WPA. The COA held that because the plaintiff’s report was not based on a violation of the Public Health Code, but rather on alleged malpractice that does not require proof of a violation of the Public Health Code, the WPA was not the plaintiff’s exclusive remedy. Thus, the COA held that the WPA did not apply and the plaintiff’s discharge in violation of public policy claim was valid.

Practical Takeaways

All employers are familiar with the employment at-will doctrine. However, employers should be reminded that exceptions to this doctrine are not exclusively based in statutory provisions but are also found in public policy exceptions. The decision makes clear that certain acts, such as reporting professional malpractice, may be considered so violative of public policy that they will serve as exceptions to the general rule of employment at-will.