Del. SC: Employee not wrongfully terminated under whistleblower law

By Jessica M. Karmasek | Jul 10, 2012


DOVER, Del. (Legal Newsline) - The Delaware Supreme Court last week upheld a ruling in favor of a university against a former employee who claimed she was wrongfully terminated under the state's whistleblower law.

Plaintiff Stephanie Smith appealed from the New Castle County Superior Court's award of summary judgment in favor of defendant Delaware State University.

In its Thursday ruling, the state's high court said the superior court "properly" granted summary judgment based on the facts alleged.

Also, because Smith's defamation claim is governed by New York law, it is barred by New York's one-year statute of limitations, the Court ruled.

As a manager in DSU's Department of Public Safety, Smith reported to DPS Chief James Overton.

In 2006, Belinda Baker was hired for the position of captain at DSU. At the time, Smith believed Baker was hired because she was a long-time friend of Overton's.

Although Baker was hired in 2006, she was not certified as a police officer under the Delaware Council of Police Training, or COPT, program until nearly three years later, in April 2009.

Under COPT regulations, a person must be certified before carrying a firearm and wearing a badge as a police officer.

However, in October 2006, Baker asked Smith to issue her a handgun so that she could qualify at the range.

When Smith asked Overton about the request, he ordered her to issue Baker a handgun notwithstanding her lack of certification.

Smith complained to Overton, and then to COPT administrator Major Harry Downes, that Baker had been permitted to carry a firearm without first receiving the necessary certification.

Smith later testified that her relationship with Baker and Overton deteriorated after she protested Baker receiving a weapon.

In January 2007, Smith went on medical leave for reasons unrelated to her employment.

Smith alleges that prior to going on leave she had a phone conversation with Overton during which he said he would make her life "hell or "miserable" if she returned to work.

Smith submitted her resignation on Feb. 28, 2007, to be effective March 9, 2007.

On March 6, 2007, she asked Overton if she could continue work with the same department as an independent consultant.

At his request, she worked an additional two weeks after March 9.

In a later application for unemployment benefits, Smith stated: "I left as a result of my superior placing me in a very compromising position. His wife worked on campus and began to spread untrue rumors about a fictitious relationship between myself and her husband (my boss). This began in September (actually before this)..."

Smith alleged this, and not anything related to Baker, was the source of her problems with Overton.

In 2008, Smith applied for a job with the New York City Department of Corrections, or NYDOC. In a reference form, DSU represented to her prospective employer that she was subject to discipline.

Smith alleges that her start date with NYDOC was delayed by nine months because of the erroneous reference.

She subsequently filed a complaint in the superior court alleging a violation of the Delaware's whistleblower law, breach of the covenant of good faith and fair dealing, and common law defamation in connection with the employment reference.

The lower court granted summary judgment in favor of DSU on all three claims, and denied Smith's motion for reargument.

The state Supreme Court, in its 16-page opinion, pointed to the law's constructive discharge doctrine.

"Under the constructive discharge doctrine, an employee's reasonable decision to resign because of unendurable working conditions is assimilated to a formal discharge for remedial purposes," Justice Henry duPont Ridgely explained.

To prevail, the employee must show "working conditions so intolerable that a reasonable person would have felt compelled to resign." A mere hostile work environment, without more, is insufficient, the Court said.

"Although the constructive discharge doctrine may provide grounds for a Whistleblower Act claim, the superior court properly held that Smith failed to offer sufficient evidence of a constructive discharge in this case," Ridgely wrote.

"To survive a motion for summary judgment, the plaintiff must present sufficient evidence from
which a rational trier of fact could find in her favor.

"Moreover, Smith's conduct after submitting her resignation letter is inconsistent with the gravamen of her complaint -- that intolerable conditions forced her to resign."

The Court said Smith's application for unemployment benefits also belies any factual account that would support her Whistleblower Act claim.

"In her application, Smith alleged that the worsening work conditions -- Overton's change of working style without consulting Smith and his reversal of a sanction that he ordered her to impose -- resulted from rumors that she and Overton were in a romantic relationship," Ridgely wrote. "She did not tie the working conditions to anything relating to Baker."

As for Smith's defamation claim, the Court said DSU was correct in holding that New York law governs it.

"Here, publication occurred in New York, where the NYDOC received the negative employment reference from DSU," Ridgely wrote.

Under New York law, the limitations period for a claim of libel begins to run on the date of publication.

"Here, the copy of the reference form produced indicates that NYDOC received the publication in September 2008. Plaintiff's counsel also wrote to DSU's counsel regarding the negative reference form on Dec. 4, 2008, indicating that NYDOC had received it prior to that date," Ridgely noted.

"Smith filed her complaint alleging defamation on Dec. 8, 2009. Thus, Smith's filing of the defamation claim was untimely."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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