Margaret MacGlashan v. Abs Lincs Ky, Inc. D/B/A Cumberland Hall Hospital

RENDERED: DECEMBER 18, 2014
TO BE PUBLISHED
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2014-SC-000098-CL
IN RE:
MARGARET MACGLASHAN
UNITED STATES DISTRICT COURT
V. WESTERN DISTRICT OF KENTUCKY, PADUCAH DIVISION
CIVIL ACTION NO. 5:13-CV-00135-TBR
ABS LINCS KY, INC.
D/B/A CUMBERLAND HALL HOSPITAL
OPINION OF THE COURT BY JUSTICE VENTERS
CERTIFYING THE LAW
Pursuant to CR 76.37(1), this Court granted the certification request of
The United States District Court for the Western District of Kentucky to answer
the following question of Kentucky law:
Can a plaintiff who alleges that her employment was wrongfully
terminated in violation of Kentucky Revised Statute 216B.165
assert a claim for the recovery of front pay, along with other
damages she may have sustained, by reason of her discharge?
For the reasons stated below, we conclude that the answer is "yes."
I. FACTUAL AND STATUTORY BACKGROUND
Because the case comes to this Court upon a Certification Order
requested by the United States District Court, we review the question
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presented upon a limited but adequate factual record. According to the
Certification Order, Margaret Macglashan alleges in her suit in the federal
district court that she had been employed by ABS LINCS, KY., doing business
as Cumberland Hall Hospital, and that she was fired because she was
"preparing to report a clear medication error" to an appropriate hospital
regulatory authority pursuant to KRS Chapter 216B.
KRS Chapter 216B broadly covers the regulation of health care facilities
and services in Kentucky. KRS 216B.165(1) requires hospital employees to
report circumstances in which "patient safety" or "quality of care" is "in
jeopardy." KRS 216B.165(3) provides a kind of whistle-blower protection for
health facility workers. It prohibits a health care facility or service from
retaliating against an employee who reports any deficiencies of the facility or
service pursuant to KRS 216B.165(1). However, KRS Chapter 216B does not
prescribe any specific civil remedies for the whistle-blowing employee who
suffers retaliation for making such a report. For remedies, one must look to
the generic provisions of KRS 446.070 which states: "A person injured by the
violation of any statute may recover from the offender such damages as he
sustained by reason of the violation, although a penalty or forfeiture is imposed
for such violation."
II. ANALYSIS: FRONT PAY, KRS 216B.165(3), AND KRS 446.070
In the parlance of wrongful termination of employment litigation, "front
pay" is "money awarded for lost compensation during the period between
judgment and reinstatement or in lieu of reinstatement." Pollard v. E.I. du Pont
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de Nemours & Co., 532 U.S. 843, 846 (2001). See also Brooks v. Lexington-
Fayette Urban County. Hous. Auth., 132 S.W.3d 790, 806 (Ky. 2004). As
opposed to front pay, "back pay" or "lost wages" includes the damages incurred
from the date of the wrongful termination until the date the matter is
adjudicated. Front pay is awarded for compensation lost during the period
between the date of the adjudication and the reinstatement of employment, or
where reinstatement is not an appropriate remedy, 1 the date of re-employment
by another employer in lieu of reinstatement. Thus, front pay is just as much
of a "damage sustained" as back pay; the principal difference between the two
is that back pay represents lost wages incurred before the trial and front pay
represents a reasonable estimate of damages that will accrue after the trial.
See Dollar Gen. Partners v. Upchurch, 214 S.W.3d 910, 918 (Ky. App. 2006).
"The purpose of front pay is limited to compensating the employee for wages
lost as a result of the wrongful termination." Id. at 921.
The issue essentially boils down to whether front pay fits within the
statutory language of KRS 446.070 permitting a plaintiff to recover "such
damages as he sustained by reason of the violation." The answer is obvious —
"lost compensation during the period between judgment and reinstatement or
in lieu of reinstatement" is a "damage[] sustained by reason of the violation." A
loss of income extending after the date of the adjudication is a type of injury
Reinstatement may not be an appropriate remedy in some cases because the
whistleblower litigation may have so damaged the relationship between the
whistleblower and other employees of the establishment that a congenial ongoing work
atmosphere may be impractical.
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that one might reasonably be expected to suffer as a result of a wrongful
discharge in violation of KRS 216B.165(3).
An employee acting under the protection of KRS 216B.165(3) could not
be made whole without front pay, since the measure of his or her damages
would necessarily include those wages lost between the time of the judgment
and the time of reinstatement (or some remuneration that reasonably
compensates the employee in lieu of reinstatement). If not for the wrongful
reprisal by the employer, the employee would have collected her wages during
that time frame and, therefore, the wrongful loss of those wages is
compensable as damages in a civil action because the loss represents a
"damage[] sustained by reason of the violation." If, as noted in Pollard, front
pay is "compensation for wages lost," it is obviously a monetary damage
foreseeably suffered by one who was wrongfully fired.
The argument proffered against allowing an award of front pay is based
upon a flawed syllogism. First, the Hospital points out that our decision in
Pari-Mutuel Clerks' Union of Kentucky, Local 541, SEIU, AFL-CIO v. Kentucky
Jockey Club, 551 S.W.2d 801, 802 (Ky. 1977) holds that KRS 446.070 does not
provide a right of reinstatement for wrongful termination because
reinstatement is an equitable remedy rather than a kind of "damage[]
sustained." Next, it cites to our holding in Brooks that "front pay either
supplements the equitable remedy of reinstatement or acts as a substitute for
it." 132 S.W.3d at 806, (citing to Pollard, 532 U.S. at 846). From these two
propositions, the Hospital reasons that because reinstatement is not included
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among the "damages" allowed under KRS 446.070, and because front pay is an
equitable remedy that substitutes for reinstatement, then, ergo, front pay
cannot be awarded under KRS 446.070. The flaw in that reasoning is its
supposition that a "substitute for reinstatement" is the same thing as
reinstatement; it is not.
Historically, equitable remedies (injunctive relief, specific performance,
reinstatement, etc.) arose almost always as substitutes for common law
monetary damages in situations where monetary damages were inadequate,
impossible to provide, or were otherwise unavailable. Referring to front pay as
a kind of equitable remedy, however, does not alter the practical and functional
reality that it is an award of monetary damages - to recompense a loss
"sustained by reason of the [statutory] violation." Although in a different
context, in Aetna Cas. & Sur. Co. v. Commonwealth, Justice Scott wrote
"regardless of whether the claim can be characterized as legal or equitable in
nature," the word "damages" covers "any claim . . . which requires the
expenditure of money regardless of whether the claim can be characterized as
legal or equitable in nature." 179 S.W.3d 830, 838 (Ky. 2005). This is the
conception of the word "damages" that was incorporated into KRS 446.070. In
Pari-Mutuel Clerks' Union, we held that reinstatement was excluded from KRS
446.070, not because reinstatement was an equitable remedy, but because the
act of reinstatement is not a kind of "damage[]" that the victim of a wrongful act
can "sustain." Conversely, a victim can sustain monetary losses if she is not
immediately reinstated following the adjudication, and because that monetary
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damage is a "damage sustained," the whistleblower is entitled to recover that
loss under KRS 446.070.
The Kentucky Court of Appeals reached the same conclusion in Ferry v.
Cundiff Steel Erectors, Inc. when it construed the language of KRS 342.197, "to
recover the actual damages sustained by him," to include front pay in lieu of
reinstatement:
[W]e are convinced that once [the employer] obtained an order
prohibiting reinstatement, it was incumbent upon the trial judge to
consider an award of front pay as a substitute for the equitable
remedy of reinstatement provided for in KRS 342.197. Because it
appears from the trial judge's order that she was of the opinion
that front pay did not fall within the purview of that statute, we are
convinced that the case must be remanded for re-consideration in
light of our determination that it is an appropriate element of
damage for workers claiming retaliatory discharge[.]
218 S.W.3d 390, 392-93 (Ky. App. 2006). 2
We are further convinced that considerations of justice weigh strongly in
favor of this interpretation. Without the full range of compensatory relief,
health care workers would be left in the precarious "Catch-22" situation of
being bound by statute to report health care deficiencies, but at the same time
denied the possibility of being fully compensated if they suffer reprisals for
doing so.
2 We note that in an unpublished opinion, Highlands Hosp. Corp. v. Castle,
2007-CA-002432-MR, 2010 WL 2787906 (Ky. App. July 16, 2010), a panel of the
Court of Appeals concluded that as an "equitable remedy" front pay was not available
as a damage sustained by reason of a wrongful termination. To the extent that it is
necessary to overrule an unpublished opinion, Highlands Hosp. Corp. v. Castle is
overruled.
III. CONCLUSION
In summary, we hold that pursuant to the general remedial provisions of
KRS 446.070, an employee covered by KRS 216B.165 who suffers reprisal in
violation of KRS 216B.165(3) may recover front pay as an element of
compensable damages. The law is hereby certified to The United States District
Court for the Western District of Kentucky.
All sitting. All concur.
COUNSEL FOR MARGARET MACGLASHAN:
James Michael Bolus, Jr.
Bolus Law Offices
Brian Butler
Dawthorne & Butler
COUNSEL FOR ABS LINCS KY, INC. D/B/A CUMBERLAND HALL HOSPITAL:
Michael D. Risley
Demetrius O'Dell Holloway
Sties 86 Harbison, PLLC
COUNSEL FOR U.S. DISTRICT COURT, WESTERN DISTRICT OF KENTUCKY:
Vanessa Lynn Armstrong
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