Ericka M. Rickman v. Premera Blue Cross

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
C»3 CO
ERICKA M. RICKMAN
DIVISION ONE c/> •'-•;
£0 n"
Appellant,
i
No. 70766-3-I
v.
PREMERA BLUE CROSS, UNPUBLISHED OPINION
Respondent. ) FILED: September 2,2014
Dwyer, J. — Ericka Rickman was terminated from her position as director
of Ucentris Insured Solutions—a subsidiary of Premera Blue Cross—in the wake
of two events, both of which occurred around six weeks prior to her termination.
One event was triggered by an anonymous e-mail complaint, wherein an
independent contractor for Ucentris reported a conflict of interest involving
Rickman and her son, who also worked as an independent contractor for
Ucentris. The other event occurred when Rickman expressed concern to her
supervisor that a Premera business proposal could violate HIPAA.1 Following an
internal investigation of Rickman in response to the anonymous complaint,
Rickman was terminated from her position. She then filed suit against Premera,
alleging that she had been unlawfully discharged in violation of public policy.
1 Health Insurance Portability and Accountability Act of 1996. Pub. L. No. 104-191, 110
Stat. 1936.
No. 70766-3-1/2
She now appeals from an adverse grant of summary judgment, contending that
the trial court erred in concluding that she failed to satisfy her burden as to the
"jeopardy" and "absence of justification" elements of her cause of action.
Because the trial court correctly ruled as to the "jeopardy" element, we affirm
without considering its treatment of the "absence of justification" element.
I
Rickman served as director of Ucentris from August 2004 until November
2009, when her employment was terminated. Ucentris—a subsidiary of
Premera—sells health, life, and risk management products to individuals and
small businesses. As an organization, Premera is focused on identifying and
preventing any actual, potential, or perceived conflicts of interest involving its
employees. It has in place a number of policies and guidelines relating to
conflicts of interest that it expects all of its employees—including those of its
subsidiaries—to follow. These include a code of conduct, a conflict of interest
questionnaire policy, and a conflict of interest and disclosure questionnaire.
Pertinent language contained within these policies and guidelines is reproduced
below:
• Conflict of interest may occur if your outside activities or
personal interests influence or appear to influence your job
performance or the decisions you make in the course of your job
responsibilities.
• It is each individual's responsibility to not only avoid obvious
conflicts, but to also avoid the appearance of a conflict of
interest.... To manage potential conflicts Premera relies on
you to fully disclose any relationships that may have the
potential of being misinterpreted by others.
• "Conflict of Interest" refers to a situation in which activities,
-2-
No. 70766-3-1/3
interactions, or offers of grants or other monetary compensation
from outside entities influence, or may appear to influence, an
associate's job performance or the decisions that he/she makes
in the course of his/her job responsibilities.
• A conflict of interest may take many forms, but usually arises
when an associate might be able to use his or her position: to
influence Premera business decisions in ways that give an
improper advantage to themselves, a family member, or another
person; or to obtain for themselves, a family member, or other
person a financial benefit unrelated to the compensation they
receive for the work they perform at Premera.
(Emphasis added.)
When employees are hired, and annually thereafter, they complete the
conflict of interest disclosure questionnaire, which poses questions relating to
potential conflicts, including the following:
• During the past 12 months, have you or has any family member
received any fee, commission, gift, or other compensation due
to the sale of a health care service agreement or insurance
policy by or on behalf of [Premera or any of its subsidiaries]?
• During the past 12 months, have you or has any family member
received any fee, commission, gift, or other compensation
arising from [a]. . . purchase . . . [or] sale .. . made by or for. ..
[Premera or any of its subsidiaries]?
Ucentris hires independent contractors to sell its insurance products.
Some of these agents are called "captive agents," meaning that they can sell
insurance products offered only by Premera and its subsidiaries. Rickman's son,
Taylor Vidor, worked as a "captive agent." Rickman stated that she told her first
supervisor at Ucentris—Steve Melton, now deceased—about Vidor and was told
that she did not need to disclose the potential conflict of interest because Vidor
was not an employee. Rickman also stated that she disclosed her relationship
with Vidor to Jessica Johnson, an employee in the human resources department
No. 70766-3-1/4
at Premera. Rickman had no specific discussions with anyone in Premera's
compliance and ethics department about her relationship with Vidor. Her final
supervisor, Rick Grover, was unaware that her son was a Ucentris "captive
agent."
In 2008, Vidor was promoted from a "captive agent" to a "subject matter
expert" (SME). Although subordinates of Rickman recommended that Vidor be
promoted, Rickman approved their recommendation. When Vidor's co-SME
stepped down, Rickman approved an increase in Vidor's "override"—his
commission—from five to ten percent, which was twice the percentage "override"
of other SMEs. Vidor did, however, take over the workload of his former co-
SME.
On September 11, 2009, Premera's compliance department received an
anonymous e-mail complaint from an individual who later identified himself as
Steven Lopez—a Ucentris "captive agent" at the time. Lopez reported his
concern that a conflict of interest existed given that Rickman's son worked with
Ucentris. Among other complaints, Lopez reported that Rickman had placed
Vidor in an elevated position as a SME; that Vidor reported on the daily activities
of other "captive agents" directly to Rickman; that Vidor sat in on productivity
reviews of "captive agents"; that Vidor had input on which "captive agents"
received leads and which did not; and that the general feeling in the office was
that being friends with Vidor would curry favor with Rickman. Lopez requested
that the matter be investigated and initially requested anonymity, claiming that he
feared retaliation by Rickman.
-4-
No. 70766-3-1/5
Following Lopez's anonymous complaint, Premera launched an
investigation, which was conducted by Nancy Ferrara. When Rickman was
interviewed by Ferrara, Rickman denied that her relationship with Vidor created a
conflict of interest and stated that their relationship was known throughout
Ucentris. She indicated that her first supervisor, Melton, had known about the
relationship and she stated that she had told a former Premera human resources
representative named Jessica Johnson about her relationship with Vidor, but that
Johnson "never got back to her and eventually left Premera." According to
Ferrara, "Human resources did not have any record that Ms. Rickman had
contacted Ms. Johnson."
Lopez and another "captive agent," Mark Stryzewski, reported that
Rickman had told them that she was concerned about Premera finding out about
her relationship with Vidor and had instructed them not to tell anyone outside of
Ucentris about their relationship. Although Rickman claimed that she did not
have any oversight role with the "captive agents," Stryzewski stated that it was
his perception that Rickman did, in fact, have the ultimate authority to make
important decisions regarding "captive agents." Other "captive agents" shared
the same or similar perceptions of Rickman's authority.
In late October 2009, Ferrara shared the results of her investigation with
Grover, including her recommendation that Rickman be dismissed. Among other
things, Ferrara concluded that Rickman
exhibited poor judgment and a lack of integrity by, among other
things, not reporting her relationship with Mr. Vidor to Compliance
or Human Resources at any point during her employment
No. 70766-3-1/6
(especially when she approved of his SME designation and the
doubling of his override); making decisions that allowed at least a
perception of favoritism toward her son; seemingly condoning
familial relationships within Ucentris without Compliance's
involvement, which created an environment of at least perceived
favoritism; failing to be forthcoming with me during the
investigation; speculating about who the complainant was; and
authorizing the termination of Ms. Lopez's captive agent contract
under the circumstances.[2]
Grover agreed with Ferrara's recommendation and terminated Rickman's
employment on November 3, 2009.
Prior to the termination, and around the time that Lopez lodged his
anonymous complaint, Rickman had expressed concern to Grover that a
potential change in Premera's business practice could violate health insurance
privacy laws. Rickman learned that Pacific Benefits Trust, a large association
underwritten by Premera, was likely merging with Washington Grocers Trust,
which was underwritten by a different company. Rickman confirmed this
information with the director of Premera's "Small Business Group," Robin
Hilleary. When Rickman told Hilleary that a Ucentris "captive agent" had a client
who, in light of the merger, wanted the agent to look for other non-Premera
insurance for his business, Hilleary told Rickman that Premera did not want
agents to look outside Premera for insurance for their clients. Hilleary also told
Rickman that Premera planned to use Ucentris agents to transfer the
membership of preferred groups of the merged associations into associations
that were underwritten by Premera. Rickman believed that this approach would
2 Following Lopez's anonymous complaint, Rickman approved the recommendation to
terminate Ucentris's contract with Lopez's wife who was also a "captive agent."
No. 70766-3-1/7
constitute an illegal form of "risk bucketing"—that is, separating riskier policy
holders from less risky ones and putting them into separate "buckets" for
underwriting—because doing so would require disclosure of private policyholder
information.
Although Rickman admittedly did not know the details of the plan and
although she was unable to say that it was, in fact, illegal, Rickman nevertheless
relayed her concerns to Grover, telling him that the plan "had HIPAA written all
over it." She then urged him to "take it up the chain of command to make sure
everything was legal." However, Grover demurred, stating, "Ericka, we don't
always tell everything to [Senior Executive Vice President of Sales and
Marketing] Heyward Donnigan because she's like a dog on a bone when she
finds something out." Rickman responded, "But that's the way I have always
done my business," to which Grover replied, "Well, there's a new Sheriff in town."
Subsequently, Grover forwarded a string of e-mail messages to Rickman.
In Rickman's opinion, these e-mail messages confirmed her concern that
Premera leadership planned on engaging in a form of "risk bucketing" that could
potentially violate health insurance privacy laws. Rickman reiterated her concern
to Grover that the plan was inappropriate and possibly illegal.
Ferrara had no knowledge of Rickman's alleged concern or complaint to
Grover until after Rickman's dismissal when Rickman filed a complaint with the
Equal Employment Opportunity Commission. Additionally, Grover stated that the
type of "risk bucketing" that caused Rickman concern would not have involved
No. 70766-3-1/8
disclosing information protected by HIPAA or UHCIA.3 Nonetheless, Grover
ultimately did not adopt the proposed plan based upon his concerns about the
plan's favoritism toward Ucentris over Premera's other distribution channels.
On December 15, 2010, Rickman filed suit in Snohomish County Superior
Court, alleging that Primera had wrongfully discharged her in violation of public
policy. On April 11, 2013, Primera moved for summary judgment. Thereafter, in
a letter opinion, the trial court granted Premera's motion, ruling that Rickman did
not establish a prima facie case of wrongful discharge in violation of public
policy—a decision which was based on her failure to produce evidence as to the
"jeopardy" and "absence of justification" elements of her claim.
Rickman appeals.
II
Rickman contends that the trial court erred by granting summary judgment
for Premera. This is so, she asserts, because genuine issues of material fact
exist as to the "jeopardy" and the "absence of justification" elements. We
disagree.
"A motion for summary judgment presents a question of law reviewed de
novo." Nat'l Sur. Corp. v. Immunex Corp., 162 Wn. App. 762, 770, 256 P.3d 439(2011), affd, 176 Wn.2d 872, 297 P.3d 688 (2013). Summary judgment is
appropriate if "the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to
3Washington's Uniform Health Care Information Act, ch. 70.02 RCW.
-8-
No. 70766-3-1/9
judgment as a matter of law." CR 56(c). The nonmoving party on summary
judgment "must set forth specific facts showing that there is a genuine issue of
material fact." Dicomes v. State, 113Wn.2d 612, 631, 782 P.2d 1002 (1989).
"Summary judgment is appropriate if in view of all of the evidence, reasonable
persons could reach only one conclusion." Yankee v. APV N. Am., Inc., 164 Wn.
App. 1,8, 262 P.3d 515 (2011).
In her complaint, Rickman claimed that she was wrongfully discharged in
violation of public policy. Thus, in order to survive Premera's summary judgment
motion, Rickman was required to produce evidence that, if proved, would
establish the following four elements: (1) the existence of a clear public policy
("clarity" element);4 (2) that existing means of promoting the public policy were
inadequate such that discouraging Rickman's conduct would jeopardize the
public policy ("jeopardy" element); (3) that her public policy-linked conduct
caused her dismissal ("causation" element);5 and (4) that Premera's justification
for her dismissal was prextexual ("absence of justification" element). See, ejj.,
Korslund v. DvnCorp Tri-Cities Servs.. Inc.. 156Wn.2d 168, 178, 181-82, 125
P.3d 119 (2005). "These elements are conjunctive, meaning that all four
elements must be proved." Cudnev v. ALSCO, Inc.. 172 Wn.2d 524, 529, 259
P.3d 244 (2011). Our Supreme Court has indicated that "the wrongful discharge
4 The trial court ruled that a clear public policy existed in favor of maintaining and
protecting patient privacy interests. Neither party challenges this ruling on appeal.
6Although the trial court did not address the "causation" element in its ruling, on appeal
Premera avers that we may also affirm the trial court's grant of summary judgment based on
Rickman's failure to produce evidence necessary to create genuine issues of material fact as to
the "causation" element. Because we affirm the trial court's ruling based on the "jeopardy"
element, we need not address Premera's averment.
No. 70766-3-1/10
tort is narrow and should be 'applied cautiously.'" Danny v. Laidlaw Transit
Servs.. Inc.. 165 Wn.2d 200, 208, 193 P.3d 128 (2008) (quoting Sedlacek v.
Hillis. 145 Wn.2d 379, 390, 36 P.3d 1014 (2001)); accord Weiss v. Lonnquist.
173 Wn. App. 344, 352, 293 P.3d 1264, review denied, 178 Wn.2d 1025 (2013).
Rickman makes two arguments in support of her contention that the trial
court erred with respect to the "jeopardy" element. First, that it erred by
concluding that no issues of material fact existed as to whether discouraging her
conduct would jeopardize the public policy in favor of maintaining and protecting
patient privacy interests. Second, that it erred by concluding that adequate
alternative means of promoting this policy existed. Neither argument is
persuasive.
"The jeopardy element sets up a relatively high bar." Weiss, 173 Wn. App.
at 352. Not only is the plaintiff required to "show that she engaged in particular
conduct and the conduct directly relates to the public policy or was necessary for
the effective enforcement of the public policy," she "must prove that discouraging
the conduct that she engaged in would jeopardize the public policy." Weiss. 173
Wn. App. at 352. "This burden requires a plaintiff to argue that other means for
promoting the policy ... are inadequate.'" Piel v. City of Federal Way. 177
Wn.2d 604, 611, 306 P.3d 879 (2013) (alteration in original) (internal quotation
marks omitted) (quoting Gardner v. Loomis Armored. Inc.. 128 Wn.2d 931, 945,
913 P.2d 377 (1996)). "If there are other adequate means available, the public
policy is not in jeopardy and a private cause of action need not be recognized."
Weiss, 173 Wn. App. at 352; see also Cudnev. 172 Wn.2d at 530 (explaining that
-10-
No. 70766-3-1/11
application of a "strict adequacy standard" produces "only a narrow exception to
the underlying doctrine of at-will employment"). Although inquiry as to the
"jeopardy" element is generally factual in nature, "the question whether adequate
alternative means for promoting the public policy exist may present a question of
law." Korslund. 156 Wn.2d at 182.
Rickman argues first that the trial court erred by concluding that no issues
of material fact existed as to whether discouraging her conduct would jeopardize
the public policy in favor of maintaining and protecting patient privacy interests.
This is so, she asserts, because it improperly relied on the Supreme Court's
decision in Dicomes to reach its conclusion. However, Rickman's efforts to
distinguish Dicomes are unavailing.
The particular language from Dicomes that the trial court relied upon and
with which Rickman takes issue is as follows:
In determining whether retaliatory discharge for employee
whistleblowing activity states a tort claim for wrongful discharge
under the public policy exception, courts generally examine the
degree of alleged employer wrongdoing, together with the
reasonableness of the manner in which the employee reported, or
attempted to remedy, the alleged misconduct.
113Wn.2dat619.
The whistleblowing activity in Dicomes occurred after a violation of the
law; however, nothing in that decision limits its application to instances in which
whistleblowing postdates a violation. Moreover, Rickman offers no persuasive
reason for cabining the application of Dicomes to its facts. Indeed, where an
employee reports concern with potential employeractivity—as Rickman did
-11 -
No. 70766-3-1/12
here—a trial court may examine the record to approximate the degree of
wrongdoing, if any, that would have taken place in the event that the employer
had engaged in the activity. Similarly, a trial court may examine the
reasonableness of the manner in which the employee reported the potential
misconduct or attempted to remedy it. It was proper for the trial court to apply
the standard in Dicomes to the facts in this case.6
Turning to the trial court's application of Dicomes. there was no error. The
trial court was persuaded by the fact that Premera did not implement the "risk
bucketing" plan and by Rickman's failure to apprise herself of the details of the
plan in order to determine whether it was, in fact, illegal. After examining the trial
court record and the parties' briefs, we cannot conclude that the manner in which
Rickman reported her concerns was reasonable, or that Premera—had it actually
implemented the "risk bucketing" plan—would have engaged in any degree of
wrongdoing. Rickman's ignorance of the plan's details and legality, coupled with
her failure to make meaningful inquiries, gainsays her position that she reported
her concerns in a reasonable manner. Moreover, she adduced no evidence that
the abandoned "risk bucketing" plan would have been illegal, relying only on her
statement to Grover that the plan "had HIPAA written all over it." Guesswork and
intuition do not meet the high bar set by the "jeopardy" element. No genuine
6Contrary to Rickman's intimation, our Supreme Court's decision in Cudnev, wherein it
analyzes Hubbard v. Spokane County, 146 Wn.2d 699, 50 P.3d 602 (2002), does not
categorically bar a grantof summary judgment against a plaintiff who raises concerns before a
violation of the law occurs. Although Cudnev and Hubbard empower courts to protect a plaintiff
who raises concerns before wrongful activity occurs, they do not immunize that plaintiff from an
adverse grant of summary judgment. Instead, courts must apply the standard in Dicomes to
determine whether summary judgment should be granted.
12
No. 70766-3-1/13
issues of material fact exist as to whether discouraging Rickman's conduct would
jeopardize the public policy of maintaining and protecting patient privacy
interests.
Rickman next argues that the trial court erred by concluding that adequate
alternative means of promoting the public policy existed. This is so, she asserts,
because (1) no Washington authority holds that an internal reporting system can
constitute an adequate means of promoting a public policy; (2) her method of
reporting was more effective than Premera's internal reporting system; and (3)
the complaint mechanisms within HIPAA and UHCIA are only available for actual
rather than potential noncompliance. We disagree.
The "strict adequacy" standard requires available adequate alternative
means of promoting the public policy; however, contrary to Rickman's first
assertion, there is no indication that available alternative means must carry the
force of law in order to be adequate. Nevertheless, Rickman argues that a
private internal reporting system cannot be adequate, reasoning that if it were
otherwise, then "an employer could simply escape liability by creating a
complaint mechanism, regardless of whether it subsequently terminated an
employee for taking action that promoted the public policy by preventing a law
violation." Rickman reasons that were we to determine that Premera's internal
reporting system constituted an adequate alternative means of promoting the
public policy, she would be left without a private remedy against Premera,
despite the fact that she was responsible for preventing a law violation. It follows
from this, she urges, that an alternative means is only adequate if it exposes the
-13-
No. 70766-3-1/14
employer to liability. However, even assuming—without deciding—that Rickman
did, in fact, prevent a law violation, "[t]he Supreme Court has repeatedly
emphasized that it does not matterwhether or not the alternative means of
enforcing the public policy grants a particular aggrieved employee any private
remedy." Weiss. 173 Wn. App. at 359. The effect of the Supreme Court's
unswerving approach is that the question of whether an alternative means is
adequate is answered not by reference to the terminated employee's potential
recourse against the employer, but by determining whether the alternative means
promotes the public policy at issue. Focusing on whether the public policy is
promoted ensures that the wrongful discharge in violation of public policy cause
of action exists as "only a narrow exception to the underlying doctrine of at-will
employment." Cudnev. 172 Wn.2d at 530. Were we to embrace Rickman's
reasoning, we would impermissibly broaden the narrow exception drawn by the
Supreme Court.
Nevertheless, Rickman asserts that direct reporting was a superior
method to utilizing Premera's internal reporting system. Not only is her assertion
speculative, it fails to address the applicable standard, which is concerned not
with winnowing down the available alternatives until only the best one remains
but, rather, with establishing a baseline above which any available alternative is
considered adequate. Rickman had to present evidence tending to show that
anonymous electronic or telephonic reporting was an inadequate alternative
means of promoting the public policy at issue. Yet, she failed to offer any
evidence impugning the evidence in the record of Premera's robust internal
-14-
No. 70766-3-1/15
reporting system. Given the existence of Premera's internal reporting system,
which—as evidenced, in part, by the prompt investigation following Lopez's
complaint against Rickman—appears, on this record, to be functioning
effectively, we conclude that the system provided an available adequate
alternative means by which Rickman could have reported her concerns, thereby
promoting the public policy in favor of maintaining and protecting patient privacy
interests. Therefore, without deciding whether HIPAA or UHCIA provided
available adequate alternative means, we conclude that the trial court did not err
in its ruling with respect to the "jeopardy" element.
We affirm the superior court's grant of summary judgment in favor of
Premera.
We concur:
"fc&MUfl PjT
15