Judicial Rulings

Illinois Supreme Court

Retaliatory discharge v. employee at will

DECIDING what is "clearly mandated public policy" divided the Supreme Court in two October 18 opinions involving retaliatory discharge of employees. The court said it recognizes a cause of action for retaliatory discharge only when firing the employee is in violation of a clearly mandated public policy that "strike[s] at the heart of a citizen's social rights, duties, and responsibilities."

In David N. Price v. Carmack Datsun (109 Ill. 2d 65), Price was injured in an automobile accident and compiled more than $7,000 in medical expenses. He was covered under a company health insurance policy. Dealership President Donald Carmack asked Price not to file a claim with the insurance company. When Price said he intended to do so, he was fired. Price argued that there is a public policy against discharge of employees who file health insurance claims. Carmack countered that filing a health insurance claim is founded on a private contractual right and is not a matter supported by public policy.

Price alleged that filing the claim was the reason he was discharged. A Vermilion County circuit court jury agreed, awarding him about $8,300 in compensatory and punitive damages. The appellate court reversed that decision, ruling that Price had not stated a cause of action for retaliatory discharge.

In the court's opinion, Justice Daniel P. Ward wrote that the accepted general rule is that in an employment-at-will arrangement, which Price had, there is" no limitation on the right of an employer to discharge an employee. The exception is for retaliatory discharge. "The matter here," the court decided, "is one of private and individual grievance rather than one affecting our society."

In his dissent, Justice Seymour Simon said the matter does affect our society. "As part of our public policy we encourage employers to provide health insurance plans for their employees so that in case of illness or injury they will not become destitute or public charges," Simon wrote. He said that most employees regard employer-provided health insurance as part of compensation, so that discharging an employee for filing a claim is similar to discharging an employee because he refuses to work for less than the minimum wage.

"This strikes at the heart of an employee's social rights," he wrote, also calling the decision an "unconstitutional abuse of economic power in derogation of public policy" that authorizes "abusive exercise of power to discharge employees."

In William E. Wheeler et al v. Caterpillar Tractor Co. (108 Ill. 2nd 502), Wheeler, a radiographer in the company's X-ray department, was told that Caterpillar would be installing a unit that used live radioactive cobalt and he would be expected to operate it. Wheeler asked to be transferred because he said that the cobalt unit was not properly operated and could cause serious and permanent injury. He said he did not have enough training to operate the unit and that operations were being conducted in violation of Nuclear Regulatory Commission (NCR) regulations. Wheeler was fired.

He alleged that his discharge contravened state public policy and resulted from his employer's violation of federally mandated safety codes. His wife, seeking damages, said she was deprived of her husband's services, society, companionship and conjugal relationship. The company said that because the complaint alleged no communication to the appropriate authorities of regulation violations, the controversy was internal and no public policy question was involved.

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A Macon County circuit court ruled for the company and the appellate court affirmed, saying that Wheeler was not attempting to remedy any possible rule violations and therefore clearly mandated public policy was not present. But the Supreme Court, in reversing the lower courts and remanding the case to the circuit court, said control of radioactive materials was preempted by the enactment of the Atomic Energy Act of 1954, and section 210 of the federal Energy Reorganization Act prohibits discharging so-called "whistle blowers."

"The congressional findings and declaration of policy clearly enunciate a public policy which is national in scope," Justice Joseph H. Goldenhersh wrote in the majority opinion. The appellate court had ruled that the question of public policy in this case depended on whether a complaint was filed with the NRC. But the Supreme Court ruled that federal legislation and regulations declared public policy and the existence of that public policy did not depend on whether Wheeler had complained to the NRC. The court made no ruling on punitive damages.

Justice Thomas J. Moran and Howard C. Ryan dissented. Moran wrote that the U.S. secretary of labor enforces section 210, not state courts. "I find no justification for extending the tort of retaliatory discharge to cases where, as here, existing remedies adequately protect the employee's interest in earning a livelihood and the public's interest in safety," Moran wrote. "I do not think that this court should intrude into an area already regulated by a comprehensive federal statute." Justice Ben Miller did not take part in the case. 

Marc D. A llan

Illinois laws stop at the border

ILLINOIS laws regulate sales of liquor by Illinois tavernkeepers in Illinois to Illinois patrons, but these statutes do not extend to Wisconsin bar owners, the Supreme Court ruled October 18 in a widely publicized drunk-driving case. The decision in Irene Silva Wimmer v. Lawrence Koenigseder (108 Ill. 2d 435) stemmed from a 1982 Lake County circuit court case in which two Illinois teenagers, a 19-year-old man and a 17-year-old girl, who had been drinking in Wisconsin were involved in an automobile accident in McHenry County, Ill.. The girl, Judith Ann Silva, was killed.

In this case, Irene Silva Wimmer, as special administrator of Judith Silva's estate, sued the owners of two Trevor, Wis., bars where the teens had been drinking. She claimed that the tavernkeepers were negligent in serving Koenigseder and Silva and that the alcohol they bought at the bars caused the accident. The bar owners filed motions to dismiss the case for lack of jurisdiction, claiming they are Wisconsin residents and have no jurisdictional contacts with Illinois. The circuit court granted the motion to dismiss the case, but the appellate court reversed that ruling.

"It would be a complete waste of judicial resources to permit this proceeding to continue by ruling that there is a long-arm jurisdiction if it is clear, as the defendants argue before this court, that neither statutes nor the common law in Wisconsin or Illinois would permit recovery," Justice Seymour Simon wrote as the Supreme Court began to tear down the plaintiff's case. The court was not asked to rule on Koenigseder's status and therefore did not.

The court found that the tavernkeepers had breached no duty under either Illinois or Wisconsin statutory or common law by the allegedly negligent or improper sale of alcohol to Koenigseder. "Wisconsin has no dramshop statute; therefore no statutory duty is owed by Wisconsin tavernkeepers to their patrons," the court said. "Nor does Wisconsin recognize any common law action in tort against a dispenser of alcoholic beverages for serving an intoxicated customer who then injures a third party." The court said the bar owners owed no duty under Illinois law because no tort was committed in Illinois by the bar owners. A previous case, Graham v. General U.S. Grant Post No. 2665 VFW, only applies to sale of alcohol in Illinois by Illinois tavernkeepers that results in accidents in Illinois, the court said.

Wimmer's attorneys argued that a 1984 case, Sorensen v. Jarvis, changed the law. In that case, a third party injured by an intoxicated minor was allowed to sue a tavernkeeper for negligent sale of liquor to a person whom the tavernkeeper knew or should have known was a minor. But, the court said, Koenigseder was not a minor under Wisconsin law and the Sorensen case cannot be applied to events that occurred before September 1, 1984.

Marc D. Allan

U.S. 7th Circuit

USEPA cannot make up rules in the middle of game

THE U.S. Environmental Protection Agency (USEPA) may not make policy changes without explaining why, the U.S. Seventh Circuit Court of Appeals ruled November 4. The court decided that the agency used arbitrary and capricious standards to prevent the Illinois EPA (IEPA) from upgrading the air pollution status of Kane and DuPage counties.

The USEPA "is entitled to change its policy, but it must do so on the basis of a reasoned analysis," Judge Richard F. Cudahy wrote in Illinois State Chamber of Commerce and Illinois Environmental Protection Agency v. United States Environmental Protection Agency. The case stems from a 1983 USEPA decision to deny "attainment" status to Kane and DuPage counties, which would indicate that these areas met federal ozone standards. Neighboring Will and McHenry counties were granted attainment ratings earlier that year.

The USEPA "did not claim that the counties had failed to meet the ozone standard; instead, [it] pointed to the ozone problem in the larger Chicago [nonattainment] suburban area," the court wrote in a 2-1 decision remanding the issue to the USEPA for reconsideration. The opinion stated that under this theory, southeastern Wisconsin would be considered a nonattainment region if Chicago businesses caused Wisconsin ozone. Senior Circuit Judge Wilbur F. Pell Jr. sided with Cudahy.

The IEPA argued that its federal counterpart either based its nonattainment status for the two counties on air pollution monitored in other areas or it is trying to designate the Chicago area entirely under nonattainment status. By doing the first, USEPA would be violating the statute that authorizes use of only local air quality data to determine the area's status. If USEPA was trying to change the designated attainment area borders, "it is doing something it may not do," the state said. No pollution violations were found in Kane or DuPage counties. "If [US]EPA changed its policy, it did not say so; and neither did it explain how its justification of its most recent action could be made consistent with its earlier actions if no change in policy was involved," the decision stated.

The Illinois State Chamber of Commerce hailed the decision as a major victory "that will prevent any further regulatory burdens on businesses" in those counties.

Judge John L. Coffey dissented, writing that USEPA was within its rights in refusing attainment status to two of Chicago's "collar counties." Redesignating Will and McHenry counties was consistent with federal policy that counties with populations of less than 200,000 people were not considered part of the urban nonattainment area. In contrast, Coffey wrote, Kane and DuPage counties both have populations of more than 200,000 and "both are sources of ozone precursors that contribute to the ozone in the Chicago urban area.'"

MarcD. Allan

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