Mary Beth Vancleave v. Reelfoot Bank ( 2009 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
April 23, 2009 Session
MARY BETH VANCLEAVE,
v.
REELFOOT BANK
Appeal from the Circuit Court for Weakley County
No. 3943 W. Michael Maloan, Chancellor
No. W2008-01559-COA-R3-CV - Filed October 30, 2009
This is a retaliatory discharge case. The plaintiff was employed by the defendant bank. The plaintiff
was asked by a customer to open an account in a manner that the plaintiff believed was illegal. The
plaintiff refused to do so, and shortly afterward was terminated by the bank. The plaintiff employee
filed suit against the bank, asserting claims of common law and statutory retaliatory discharge. After
discovery, the bank filed a motion for summary judgment. The trial court granted summary
judgment in favor of the bank, finding that the plaintiff failed to state a claim under either theory
because the purported violation of the various statutes and regulations cited by the plaintiff employee
did not implicate an important public policy or an illegal activity affecting the public health, safety
or welfare. The trial court also found the plaintiff employee, in refusing to open the requested
account, had no intent to further the public good, but sought only to protect the bank. The plaintiff
employee appeals. We reverse, finding that some of the statutory provisions at issue implicate
important public policy and can constitute the basis for a retaliatory discharge claim, and that intent
to further the public good is not a required element.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed and
Remanded
HOLLY M. KIRBY , J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and
DAVID R. FARMER , J., joined.
Ann Buntin Steiner, Nashville, Tennessee, for the Plaintiff/Appellant Mary Beth VanCleave
David W. White, Kansas City, Missouri, and James M. Glasgow, Jr., Union City, Tennessee, for
Defendant/Appellee Reelfoot Bank
OPINION
FACTS AND PROCEEDINGS BELOW
Plaintiff/Appellant Mary Beth VanCleave (“VanCleave”) was employed for some fourteen
years by the Defendant/Appellee Reelfoot Bank (“Bank”) in Weakley County, Tennessee.1 She was
an Assistant Vice President at the Bank, and her responsibilities included opening accounts for
customers. In late October 2002, VanCleave was promoted to personal banker; in this new position,
she retained responsibilities for opening new customer accounts.
On Friday November 1, 2002, a longtime customer of the Bank, James Lynch (“Lynch”),
approached VanCleave about opening another account with the Bank. VanCleave was aware that
Lynch had overdue loans from the Bank and on earlier occasions, executions had been issued against
his prior accounts at the Bank. VanCleave did not personally know Lynch, but had a perception that
he was untrustworthy. At Lynch’s meeting with VanCleave, Lynch had a check for over $31,000
payable to his employer, Stan Gammons (“Gammons”). Lynch told VanCleave that the check was
his (Lynch’s) money, not Gammons’. Lynch wanted the check deposited into a new account opened
in Gammons’ name with Gammons’ social security number. However, Lynch wanted no checks
written on the account to be payable without his (Lynch’s) signature. From several training seminars
VanCleave had attended, she believed that opening an account in the manner described by Lynch
would violate various banking laws and regulations.
Consequently, VanCleave told Lynch that she could only open the account for him if he
(Lynch) would sign an account signature card and also provide the Bank his driver’s license number.
Lynch refused, emphasizing that he did not want his name on the account. Lynch indicated to
VanCleave that her immediate supervisor, Bank Vice President Larry Elgin (“Elgin”), had already
told him that the account could be set up in the manner he requested. VanCleave responded by
telling Lynch that Elgin may not be clear on Bank deposit policy. She refused to open the account
for Lynch under these conditions. Apparently unhappy with VanCleave’s refusal, Lynch left the
Bank.
Shortly afterward, Lynch apparently contacted Elgin to complain about VanCleave’s refusal
to open the account. After talking to Lynch, Elgin went to see VanCleave and directed her to have
Lynch and Gammons return to the Bank to open the requested account. VanCleave told Elgin that
she would call Lynch and Gammons, but that the account would have to be opened in the proper
manner and Lynch would have to sign a signature card and provide identification. Angered, Elgin
walked out.
Subsequently, Gammons opened an account at the Bank, signing the signature card and
providing all of the requisite information. Gammons deposited $26,000 of the $31,000 check into
1
Because this is an appeal from an order for summary judgment, we review and here recite the facts as alleged
by the non-moving party, VanCleave.
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the new account. Immediately thereafter, Gammons wrote a $25,000 check to Lynch. Lynch took
the check to another bank in a different city, opened a new account, and deposited the $25,000 into
the new account.
On Monday November 4, 2002, VanCleave was summoned to the office of the Bank’s branch
manager, Carol Reed (“Reed”), to discuss the incident involving Lynch. Elgin attended the meeting.
Referring to Lynch, Elgin said to VanCleave, “how in the hell do you expect me to get my hands on
his money with you pulling sh_ _ like that?” VanCleave told Elgin that Lynch’s request was against
policy, and said that she was just trying to protect the Bank. Elgin then stood up and left the meeting
abruptly. At this point, Reed informed VanCleave that she had explained to Elgin that VanCleave
was “just trying to protect him,” to which VanCleave added “and the bank.” VanCleave told Reed
that she was just trying to do her job in the manner in which she had been trained.
On the morning of November 6, 2002, Elgin and Reed met with the president of the Bank,
Mike Dickerson, to discuss VanCleave’s conduct. At this meeting, it was decided that VanCleave’s
employment with the Bank would be terminated that day, due at least in part to the incident
involving Lynch. Later that day, Elgin and Reed met with VanCleave and terminated her Bank
employment.
On November 5, 2003, VanCleave filed the instant lawsuit against the Bank, alleging that
she was wrongfully terminated by the Bank for refusing to do an illegal act. The Bank filed an
answer, denying that the termination was wrongful and asserting that she was terminated for
legitimate business reasons. Discovery ensued.
On February 29, 2008, the Bank filed a motion for summary judgment, arguing inter alia that
VanCleave failed to show that the purported banking law violations implicated significant public
policy interests on which to base a claim for retaliatory discharge under either the common law or
Tennessee statutes. After a hearing on June 25, 2008, the trial court granted summary judgment in
favor of the Bank. The trial court stated the issue as whether the “Bank’s conduct . . . violates a clear
public policy or illegal activities which affect public health, safety, and welfare.” It found that the
statutory and regulatory violations alleged by VanCleave “do not rise to the required level of a clear
public policy or illegal activity affecting public health, safety, and welfare.” The trial court also
noted that VanCleave stated in her complaint that her intent was to protect the Bank, not the public.
From this order, VanCleave now appeals.
ISSUES ON APPEAL AND STANDARD OF REVIEW
On appeal, VanCleave raises the following issues for our review:
(1) Whether the trial court erred in finding that purported violation of the regulations
promulgated under the Bank Secrecy Act, the Internal Revenue Code, the U.S.A. Patriot Act,
the Privacy of Consumer Information Act, and purported violation of Tennessee Code
Annotated section 66-3-101 do not rise to the level of a clear public policy or an illegal
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activity affecting public health, safety, and welfare, so as to sustain a retaliatory discharge
action;
(2) Whether the trial court erred in finding that VanCleave was not seeking
to further the public good by refusing to open the account as requested by Lynch;
(3) Whether the trial court erred in declining to rule on the other issues raised
in the Bank’s summary judgment motion.
Summary judgment is appropriate when the moving party demonstrates that there is no
genuine issue of material fact and she is entitled to judgment as a matter of law. Tenn. R. Civ. P.
56.04. “Courts must view the evidence in the light most favorable to the nonmoving party and must
also draw all reasonable inferences in the nonmoving party’s favor.” Staples v. CBL & Assocs.,
Inc., 15 S.W.3d 83, 89 (Tenn. 2000) (citing Robinson v. Omer, 952 S.W.2d 423, 426 (Tenn. 1997);
Byrd v. Hall, 847 S.W.2d 208, 210-11 (Tenn. 1993)). A grant of summary judgment is reviewed
on appeal de novo with no presumption of correctness. Guy v. Mutual of Omaha Ins. Co., 79
S.W.3d 528, 534 (Tenn. 2002) (citing McClung v. Delta Square Ltd. P’ship, 937 S.W.2d 891, 894
(Tenn. 1996); Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995)).
ANALYSIS
Important Public Policy Concerns
We first address VanCleave’s argument that the trial court erred in determining that violation
of the various regulations and statutes cited in her complaint is not a sufficient basis for a retaliatory
discharge claim in that they do not indicate a clear public policy and violation of them does not
affect the public health, safety or welfare.
In Tennessee, the doctrine of employment-at-will is a “bedrock” of the common law.
Franklin v. Swift Transp. Co., Inc., 210 S.W.3d 521, 527 (Tenn. Ct. App. 2006). Under this
doctrine, the employment of a person employed for an indefinite term may be terminated at any time,
for good cause, bad cause, or no cause at all. Id. (citing Guy, 79 S.W.3d at 534-35).
Retaliatory discharge is “an important, but narrow, exception to the employment-at-will
doctrine” applicable only in limited circumstances. Franklin, 210 S.W.3d at 530 (citing Stein v.
Davidson Hotel, 945 S.W.2d 714, 717 (Tenn. 1997); Chism v. Mid-South Milling Co., Inc., 762
S.W.2d 552, 556 (Tenn. 1988)). In this case, VanCleave asserts a claim for retaliatory discharge
under both the common law and the Tennessee Public Protection Act, codified at Tennessee Code
Annotated section 50-1-304. The elements required to establish both were summarized in Franklin:
To prevail under the Public Protection Act, the plaintiff must establish (1) his status
as an employee of the defendant employer; (2) his refusal to participate in, or remain
silent about, “illegal activities” as defined under the Act; (3) his termination; and (4)
an exclusive causal relationship between his refusal to participate in or remain silent
about illegal activities and his termination. The elements required in order to prove
a common law retaliatory discharge claim are similar; the plaintiff must show (1) that
an employment-at-will relationship existed; (2) that he was discharged; (3) that the
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reason for his discharge was that he attempted to exercise a statutory or constitutional
right, or for any other reason which violates a clear public policy evidenced by an
unambiguous constitutional, statutory, or regulatory provision; and (4) that a
substantial factor in the employer’s decision to discharge him was his exercise of
protected rights or his compliance with clear public policy.
Franklin, 210 S.W.3d at 528 (citations omitted). As in Franklin, VanCleave’s appeal turns
on the final element, similar under the common law and the Public Protection Act.
Under the Public Protection Act, it must be found that the violation by the employer
constitutes an “illegal activity,” defined as “activities that are in violation of the
criminal or civil code of this state or the United States or [a] regulation intended to
protect the public health, safety or welfare.” T.C.A. § 51-1-304(c). Under the
common law, the motivating factor for the discharge must be the employee’s
compliance with “a clear public policy evidenced by an unambiguous constitutional,
statutory, or regulatory provision.” Crews, 78 S.W.3d at 862.
Franklin, 210 S.W.3d at 528. As the trial court below correctly observed, “[u]nder both the Public
Protection Act and the common law, the ‘illegal activity’ or violation by the employer must
implicate important public policy concerns.” Id. at 530. If the statutory or regulatory infraction
relied upon by VanCleave does not implicate fundamental public policy concerns, then her claim
of retaliatory discharge fails. See id. at 533.
We look, then, at the statutes and regulations that VanCleave asserts in her amended
complaint would have been violated had the account been opened in the manner Lynch requested.
These include verbatim:
(1) Financial Recordkeeping and Reporting Act of Currency and Foreign
Transactions Act of 1970, 31 U.S.C. 1051 et seq. or 12 U.S.C.A. 1951 et. seq. (The
Bank Secrecy Act) and the implementing regulations of this Act specifically 31 CFR
Part 103 (103.34 (a)(1)(ii) and 37 Federal Register 13279 (1972))
(2) The Internal Revenue Code of 1986, 26 U.S.C. 6109 and the governing
regulations (301.6109-1(b) and (c) and Section 6109 of the Internal Revenue Code
of 1986 (26 U.S.C. 6109) and its implementing regulations - Reg. Sec. 301.6109-1(b)
(3) The U.S.A. Patriot Act and the implementing regulations specifically Title
31 Section 103.121 C.F.R. implementing section 32 of the U.S.A. Patriot Act and
section 326 of the U.S.A. Patriot Act and the Anti-Money Laundering (AML)
provisions - Section 352 of the U.S.A. Patriot Act;
(4) The Privacy of Consumer Information, 12 CFR 216, Regulation P/Privacy
of Consumer Financial Information; and
(5) Tenn. Code Ann. §66-3-101 et. seq.
The Court ascertains public policy “from the constitution and the laws, and the course of
administration and decision.” Stein v. Davidson Hotel Co., 945 S.W.2d 714, 717 (Tenn. 1997)
(quoting Watson v. Cleveland Chair Co., 789 S.W.2d 538, 540 (Tenn. 1989)). Thus, we examine
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the statutes and regulations cited in VanCleave’s amended complaint to determine whether they
evidence a clear expression of an important public policy.
We look first at 31 C.F.R. § 103.34, a federal regulation promulgated pursuant to 31 U.S.C.
§ 5318, a provision of the federal Bank Secrecy Act of 1970. 31 C.F.R. § 103.34 (2009) (authority);
James E. Eldridge, The Bank Secrecy Act; Privacy, Comity, and the Politics of Contraband, 11 N.C.
J. INT ’L L. & COM . REG . 667, 671 n.23 (1986). Subsection (a)(1) of 31 C.F.R. § 103.34 mandates
that “a bank shall . . . secure and maintain a record of the taxpayer identification number of the
customer involved.” 31 C.F.R. § 103.34(a)(1) (2009). While making a reasonable effort to secure
the identifying information and maintaining a list of persons from whom it could not secure such
information was apparently sufficient to bring a bank into compliance with this requirement,2 we
must also consider subsection (b) of the same regulation. Id. Subsection (b) requires each bank to
retain an original or copy of “[e]ach document granting signature authority . . . including any
notations, if such are normally made, of specific identifying information verifying the identity of the
signer (such as a driver’s license number or credit card number).” 31 C.F.R. § 103.34(b)(1) (2009)
(emphasis added). The appellate record indicates that acquiring this information was the Bank’s
standard procedure. Thus, for purposes of summary judgment, a trier of fact could reasonably
conclude that this regulation would have been violated had the account been opened in the manner
Lynch requested.
Do these federal regulations evidence an important public policy? Prior to enacting the Bank
Secrecy Act, Congress conducted extensive hearings on the relationship between criminal activity
and secrecy in banks. Eldridge, supra, at 669-70. Testimony from several government agencies
detailed the connection between secrecy and “crimes of tax evasion, federal securities fraud, and the
laundering of ‘dirty’ (illegal) profits into ‘clean’ (legal) money.” Id. at 670. The Bank Secrecy Act
was enacted “[i]n response to the public outcry over this reported criminal activity and as a means
of providing federal law investigators with an effective investigative tool.” Id. at 672. This public
policy was codified in 31 U.S.C. § 5311: “It is the purpose of this subchapter (except section 5315)
to require certain reports or records where they have a high degree of usefulness in criminal, tax, or
regulatory investigations or proceedings.” 31 U.S.C. § 5311 (2006).
We considered whether regulations evidenced important public policy in Franklin v. Swift
Transp. Co., Inc., 210 S.W.3d 521 (Tenn. Ct. App. 2006). In Franklin, the truck driver plaintiff
based his claim of retaliatory discharge on his refusal to drive his employer’s truck with a
photocopied “cab card” instead of the original cab card, pursuant to Tennessee Department of
Transportation regulations that required that the original cab card be carried in the cab of the vehicle.
Franklin, 210 S.W.3d at 532. We found that this was a “de minimus regulatory violation,” and that
the subject regulation was “one of the many regulations that impose ‘requirements whose fulfillment
2
We note that acquiring and maintaining this identifying information became mandatory with the enactment
of the Patriot Act, see 31 U.S.C. § 5318(l) (2006); however, the pertinent Patriot Act provisions did not become effective
until October 1, 2003, almost a year after the termination of VanCleave’s employment with the Bank. See Customer
Identification Programs for Banks, Savings Associations, Credit Unions and Certain Non-Federally Regulated Banks,
68 Fed. Reg. 25090, 25092 (May 9, 2003). Therefore, the Patriot Act provisions will not be considered in connection
with VanCleave’s claim .
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does not implicate fundamental public policy concerns.’ ” Id. at 532-33 (quoting DeSoto v. Yellow
Freight Sys., Inc., 957 F.2d 655, 659 (9th Cir. 1992)).
In this appeal, the Bank argues that the Bank Secrecy Act regulations at issue fall in the same
category, providing “protection for the bank itself and not the public at large.” The Bank likens the
facts in this case to those in Collins v. AmSouth Bank, 241 S.W.3d 879 (Tenn. Ct. App. 2007), cited
by the trial court below. In Collins, the plaintiff bank employee refused her supervisor’s directive
to place cash into the night deposit drop box on Friday for use by the substitute bank teller on
Saturday. Id. at 881-82. After an argument between the plaintiff and her supervisor, the plaintiff’s
employment was terminated by the defendant bank. The plaintiff sued the bank, claiming she was
discharged in retaliation for her refusal to place the cash into the night deposit drop box. The
plaintiff asserted that doing so would have violated federal banking regulations and bank policy. Id.
at 882. The trial court granted summary judgment in favor of the bank, and the plaintiff appealed.
Id. at 883.
The appellate court in Collins found that the plaintiff could not prove that she was discharged
for refusing to participate in an illegal activity because she could not show that placing the cash in
the night deposit drop box was illegal or violated bank policy. Id. at 885-86. Finding that the
plaintiff’s discharge resulted from a simpler dispute over “workplace procedures,” the Collins court
affirmed the grant of summary judgment in favor of the bank. Id.
In this appeal, the Bank argues that, like Collins, VanCleave’s discharge involved only an
argument over “workplace procedures.” We must respectfully disagree. The Bank Secrecy Act and
the regulations promulgated thereunder, including 31 C.F.R. § 103.34, were apparently intended by
Congress to aid investigations of criminal, tax, and regulatory violations, including criminal acts
such as money laundering and tax evasion. This involves weighty public concerns on the same order
of gravity as protecting consumers from insurance fraud, see Guy v. Mutual of Omaha Ins. Co., 79
S.W.3d 528, 537-38 (Tenn. 2002), and preventing the unauthorized practice of law, see Crews v.
Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 864-65 (Tenn. 2002). Therefore, we must respectfully
disagree with the trial court’s conclusion that the Bank Secrecy Act regulations cited in VanCleave’s
amended complaint do not implicate “a clear public policy or illegal activity affecting public health,
safety, and welfare.” This holding makes it unnecessary for us to address the other statutes and
regulations cited in VanCleave’s amended complaint.
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Plaintiff’s Subjective Intent
In its order granting summary judgment in favor of the Bank, the trial court also notes that
“VanCleave clearly states her intent was to protect the Bank and/or E[l]gin, not the public,” in an
apparent reference to VanCleave’s conversation with Reed. It is unclear whether the trial court
based its grant of summary judgment in part on VanCleave’s subjective intent, in effect holding that
she was required to show that her refusal to participate in alleged illegal activities was motivated by
a desire to protect the public, as opposed to protecting Elgin, the Bank, or herself.
In the summary judgment order, the trial court quoted extensively from Collins v. AmSouth
Bank, 241 S.W.3d 879 (Tenn. Ct. App. 2007), including the statement in Collins that persons
asserting either a statutory or common law whistleblowing claim “must prove that their efforts to
bring to light an illegal or unsafe practice furthered an important public policy interest, rather than
simply their personal interest.” Collins, 241 S.W.3d at 885 (citations omitted). In support of this
statement of the law, the Collins court cites Guy v. Mutual of Omaha Ins. Co., 79 S.W.3d 528(Tenn. 2002), in which the Supreme Court stated the following:
To be clear, under both the statute and the common law, the plaintiff must assert that
his or her whistleblowing activity “serves a public purpose [that] should be protected.
So long as employees’ actions are not merely private or proprietary, but instead seek
to further the public good, the decision to expose illegal or unsafe practices should
be encouraged.”
Id. at 537 n.4 (quoting Wagner v. City of Globe, 722 P.2d 250, 257 (Ariz. 1986)) (emphasis added
by Guy Court). Subsequent cases have cited these statements in Guy and Collins, but none have
found the employee’s subjective intent to be determinative. See McDonough v. Memphis
Radiological Prof’l Corp., No. 04-2697-STA-tmp, 2009 WL 2179538, at *10-11 (W.D. Tenn. July
22, 2009); Treadaway v. Big Red Powersports, LLC, 611 F. Supp. 2d 768, 783-84 (E.D. Tenn. 2009);
Dishmon v. Wal-Mart Stores, Inc., No. 2:07-cv-0079, 2009 WL 396749, at *4-5, 9 (M.D. Tenn.
Feb. 17, 2009); Moray v. Novartis Pharm. Corp., No. 3:07-cv-1223, 2009 WL 82471, at *9-10
(M.D. Tenn. Jan. 9, 2009) aff’d, No. 09-5132, 2009 WL 2778086 (6th Cir. Sept. 3, 2009); Sanders
v. Henry County, No. W2008-01832-COA-R3-CV, 2009 WL 1065916, at *7-8 (Tenn. Ct. App. Apr.
21, 2009), perm. app. denied Oct. 19, 2009; Williams v. Columbia Hous. Auth., No. M2007-01379-
COA-R3-CV, 2008 WL 4426880, at *4-6 (Tenn. Ct. App. Sept. 30, 2008).
To the extent that the statement in Guy, paraphrased in Collins, may be interpreted as
requiring a plaintiff in a retaliatory discharge case to show subjective intent to further the public
good, some clarification is in order. As discussed in Gossett v. Tractor Supply Co., No. M2007-
02530-COA-R3-CV, 2009 WL 528924 (Tenn. Ct. App. Mar. 2, 2009), perm. app. granted Aug. 17,
2009, the term “retaliatory discharge” includes both (1) discharge in retaliation for refusing to
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remain silent about illegal activities, usually referred to as “whistleblowing,” and (2) discharge in
retaliation for refusing to participate in illegal activities.3 The claims are similar but distinct.4
For both types of retaliatory discharge, the plaintiff must show that he was employed by the
defendant and that he was discharged. Franklin, 210 S.W.3d at 528. In a whistleblowing claim,
the plaintiff must show that he refused to remain silent about his employer’s illegal activities, and
the requisite causal relationship between his refusal to remain silent and his discharge.5 Id. In a
refusal-to-participate claim, the plaintiff must show that he refused to participate in illegal activities
and the requisite causal relationship6 between his refusal to participate and his discharge.7 For both
types of claims, the illegal activities must implicate important public policy concerns evidenced by
an unambiguous constitutional, statutory, or regulatory provision. Id. at 528, 532 (citing Crews, 78
S.W.3d at 862; Guy, 79 S.W.3d at 538).
The Supreme Court’s decision in Guy involved a whistleblowing claim, in which an
insurance agent alleged that he was discharged for reporting illegal conduct to the Tennessee
Department of Commerce and Insurance. Guy, 79 S.W.3d at 532-33. To the extent that the
statement in Guy, relied on in Collins, can be read as requiring that the plaintiff’s reporting of the
3
The Tennessee Public Protection Act is sometimes informally referred to as the “Whistleblower Act.” Collins,
241 S.W.3d at 884. The language of the Act, however, explicitly encompasses both types of retaliatory discharge. See
T.C.A. § 50-1-304(b) (2008). Claims for both types of retaliatory discharge are recognized under the common law as
well. See, e.g., Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 865 (Tenn. 2002) (common law claim for
whistleblowing); Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 825 (Tenn. 1994) (common law claim of
retaliatory discharge for refusing to participate in illegal activities).
4
In Gossett, we held that reporting illegal activity is not an essential element of a claim of retaliatory discharge
for refusal to participate. Gossett, 2009 WL 528924, at *6-14. We rejected dicta in Collins v. AmSouth Bank, 241
S.W.3d 879, 885 (Tenn. Ct. App. 2007) to the extent that it could be interpreted to require reporting of the alleged illegal
activity in a claim of retaliatory discharge for refusal to participate. Gossett, 2009 WL 528924, at *14.
5
Under the Tennessee Public Protection Act, the plaintiff must show an exclusive causal relationship.
Franklin, 210 S.W.3d at 528. Under the common law, the plaintiff need only show that his refusal to remain silent was
a substantial factor in the employer’s decision to discharge him. Id. (citing Crews, 78 S.W.3d at 862).
6
Again, the Tennessee Public Protection Act requires an exclusive causal relationship while the common law
requires only that the refusal to participate be a substantial factor in the decision to discharge. Franklin, 210 S.W.3d
at 528.
7
The elements of a common law claim are stated more broadly, i.e., the plaintiff “attempted to exercise a
statutory or constitutional right, or for any other reason which violates a clear public policy,” and that a substantial factor
in the decision to discharge was the plaintiff’s “exercise of protected rights or his compliance with clear public policy.”
Franklin, 210 S.W.3d at 528. Most common law retaliatory discharge claims break down into either a whistleblowing
claim or a refusal-to-participate claim. However, common law retaliatory discharge claims can involve other public
policy reasons, such as jury service, filing a worker’s compensation claim, or rescuing someone from imminent death
or serious harm. See Anderson v. Standard Register Co., 857 S.W.2d 555 (Tenn. 1993) (worker’s compensation claim);
Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992) (jury service); Little v. Eastgate of Jackson, LLC, No.
W2006-01846-COA-R9-CV, 2007 WL 1202431 (Tenn. Ct. App. Apr. 24, 2007) (rescuing someone from physical
assault).
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illegal activity be motivated by a desire to further the public good, such a statement of the law would
be limited to a whistleblowing claim.8
Likewise, the statement in Collins cited by the trial court below was made in the context of
a discussion of the requirements of a whistleblowing claim.9 Collins, 241 S.W.3d at 885 (referring
to “[p]ersons asserting . . . a . . . whistleblowing claim.”). Moreover, insofar as the statement in
Collins can conceivably be read as indicating that a plaintiff must show that he had a subjective
intent to further the public good,10 such a statement is unnecessary to the holding in Collins and
would be considered dicta. Id. at 885-86 (holding that the plaintiff failed to show a whistleblowing
claim because she failed to present any proof that she reported or attempted to report the alleged
illegal activity).
In the case at bar, VanCleave asserts no whistleblowing claims; rather, she asserts that she
was discharged for refusing to open an account in a manner that was contrary to applicable statutes
and regulations, i.e., retaliatory discharge for refusal to participate in illegal activities. In such a
case, it would be anomalous to hold that the plaintiff must show that, in refusing to participate in
the alleged illegal activity, she was motivated by an intent to protect the public as opposed to
protecting herself or her employer. The Bank has cited no case in which a plaintiff was required to
demonstrate such a subjective intent. Indeed, retaliatory discharge claims involving refusal-to-
participate often acknowledge that the plaintiff refused the employer’s demand that he participate
in the alleged illegal activity out of concern that the plaintiff himself could be penalized for doing
so. See, e.g., Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 824-25 (Tenn. 1994) (noting
that violation of regulations promulgated under the Tennessee Motor Carriers Act may expose
employee drivers to criminal penalties); Franklin, 210 S.W.3d at 529-30 (operating defendant
8
Even in the context of a whistleblowing claim, this statement in a footnote in Guy was unnecessary to the
Court’s ultimate holding and thus must be considered dicta. Guy, 79 S.W.3d at 538 (holding that the lack of an explicit
statutory duty to report the illegal activity was not fatal to the plaintiff’s retaliatory discharge claim). Requiring that
the plaintiff show subjective intent to further the public good, even for a whistleblowing claim, would appear to be
problematic. A whistleblowing claim could arise from a plaintiff’s mandatory duty to report illegal activity, where the
plaintiff was motivated only by a desire to perform his mandated duty and thus keep himself out of trouble. See, e.g.,
Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852 (Tenn. 2002). Crews involved a permissive duty to report illegal
conduct, but the Court referenced circumstances in which a plaintiff may have a mandatory duty to report illegal
conduct. Id. at 865 n.6.
9
Collins did not involve a whistleblowing claim; the plaintiff in Collins was a bank employee who was
discharged after she refused to deposit cash into a night deposit box, and she alleged that doing so would have been a
violation of federal banking regulations. Collins, 241 S.W.3d at 882. The Collins court discussed the requirements of
a whistleblowing claim only to explain that the plaintiff failed to present proof of either a refusal-to-participate claim
or a whistleblowing claim. See id. at 885-86. Unfortunately, the analysis in Collins discusses the two types of
retaliatory discharge claims together and does not adequately distinguish between them.
10
It is more likely that the statement in Collins was intended to indicate that the reporting must further the
public good, as opposed to furthering the plaintiff’s private interest. For example, see Sanders v. Henry County, No.
W2008-01832-COA-R3-CV, 2009 WL 1065916 (Tenn. Ct. App. Apr. 21, 2009), in which the plaintiff reported the
viewing of pornographic materials on the employer county’s computer. The Sanders court held that the viewing of
pornographic images on the employer’s computer, while odious and offensive to the plaintiff, did not constitute “illegal
activities.” Id. at *6-8.
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employer’s truck with a photocopy of the cab card may expose plaintiff employee to fines, penalties
and delay on the road); Wilkerson v. Standard Knitting Mills, Inc., 1989 WL 120298, at *1, 7
(Tenn. Ct. App. Oct. 11, 1989) perm. app. granted Feb. 26, 1990 (Sanders, P.J., dissenting)
(following employer’s instruction to avoid sending employees to outside medical treatment would
result in criminal liability for violation of OSHA). It is sufficient that the plaintiff show that the
alleged illegal activity implicates important public policy concerns; in a refusal-to-participate
retaliatory discharge claim, she need not show a subjective intent to further the public good.
Therefore, VanCleave’s statement that she refused to open the bank account in the manner Lynch
requested in order to protect either Elgin or the Bank is not fatal to her claim of retaliatory discharge.
CONCLUSION
We find that VanCleave has demonstrated that the Bank Secrecy Act and its attendant
regulations, allegedly violated by opening an account as Lynch requested, evidence clear public
policy and implicate important public policy interests.11 It is not necessary for us to address the other
statutes and regulations that VanCleave asserts would have been violated by opening the account as
Lynch asked. We also hold that VanCleave need not show that her refusal to open the account as
requested was motivated by a desire to further the public good, as opposed to protecting the Bank,
Elgin or herself. Under these circumstances, we must hold that the trial court erred in granting the
Bank’s motion for summary judgment. This holding pretermits all other issues raised on appeal.
The decision of the trial court is reversed and the cause is remanded for further proceedings
consistent with this opinion. The costs of this appeal are taxed to the Appellee Reelfoot Bank, for
which execution may issue if necessary.
___________________________________
HOLLY M. KIRBY, JUDGE
11
The trial court did not reach the issue of whether opening the account in the manner requested by Lynch
would actually violate the regulations promulgated pursuant to the Bank Secrecy Act, and we likewise do not reach that
issue.
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