Preview:

REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1490 September Term, 1999

SEARS, ROEBUCK AND CO., ET AL.

v. EDWARD L. WHOLEY

Davis, Eyler, Deborah S., Krauser, JJ.

Opinion by Eyler, Deborah S., J.

Filed: August 29, 2001

After Sears, Roebuck and Co. ("Sears"), the appellant, terminated Edward L. Wholey, the appellee, from his position as Security Supervisor at the Sears store in Glen Burnie, Maryland, Wholey sued Sears and Paul Eiseman, a Regional Manager of Asset Protection Services for Sears, for wrongful discharge and

defamation, among other claims. jury, in the Circuit Court for

The case was tried before a Anne Arundel County, which

returned a verdict against Sears on Wholey's wrongful discharge claim, in favor of Sears on the defamation claim, and in favor of Eiseman on both claims. damages. From a judgment entered on that verdict, Sears appeals, presenting five questions for review. presents raise a single legal issue: Four of the questions it Whether, on the facts most The jury awarded Wholey $166,000 in

favorable to Wholey, his termination violated a clear mandate of public policy. For the following reasons, we answer that

question in the negative, and reverse the judgment.

FACTS AND PROCEEDINGS
Wholey was employed by Sears in its Glen Burnie store for 24 years. He began as a security officer in 1972, and within a In 1980, Finally, in

year was promoted to Assistant Security Manager. Wholey again was promoted, to Security Manager. 1994, he became a Security Supervisor.

From 1980 until Sears

terminated

his

employment

in

1996,

Wholey's

work

involved

investigating employee theft. Beginning in 1973, Wholey also worked as a constable for the District Court of Maryland. In 1980, Wholey became a deputy He still

sheriff for the Anne Arundel County Sheriff's Office. was working in that position as of the date of trial.

In 1994, a new store manager was hired at the Glen Burnie Sears. Around March of 1995, Wholey began to notice that the

store manager sometimes would remove items of merchandise from store display areas and put them in his office. Wholey could tell, the items then would "just As far as disappear."

Wholey did not see the store manager remove any of these items from his office or take any of them from the store without paying for them. Wholey suspected, however, that the store

manager was stealing the merchandise. In November 1995, Wholey noticed that the store manager had two pairs of pants, "one or two" sweaters, and a jacket--all Sears merchandise--in his office. tags. The items all bore store price

Wholey checked the store's cash registers to see if the When he found no

store manager had purchased any of the items.

receipts reflecting purchases, Wholey suspected that the store manager was going to steal the items by wearing or carrying them out of the store. He contacted Eiseman, who was responsible for

-2-

security

at

the

Glen

Burnie

Sears,

and

told

him

of

his

suspicions.

Eiseman suggested that Wholey use a van to perform an outside

surveillance on the store manager's office from window.

Wholey did so, but the view from the van was so limited

that Wholey could not tell from his surveillance whether the store manager was removing, or had removed, any of the items of merchandise from his office. Wholey reported to Eiseman that the surveillance from the van was inadequate and asked permission to enter the store manager's office at night to search it. Eiseman granted

permission.

On the night of November 29, 1995, Wholey entered He also searched a opened with his

and searched the store manager's office. locked drawer in the office, which he

fingernail.

Wholey's search revealed some but not all of the He did not He

merchandise that he earlier had seen in the office.

know what had happened to the missing items of merchandise.

acknowledged at trial that these items could have been returned to the display floor. From November 30, 1995 through December 14, 1995, Wholey continued to observe the store manager's movements. During that

time, he did not see the store manager remove any of the items from his office.

-3-

On December 15, 1995, Wholey learned that the store manager had made an inquiry about what time one of the security guards would be coming on shift. that the store manager When he learned that, he suspected was going to remove the items of

merchandise in his office from the store early the next morning and take them without paying for them. Wholey contacted

Eiseman, told him of his suspicions, and requested permission to install cameras in the ceiling of the store manager's office, to observe the store manager's actions. 1 According to Wholey,

Eiseman gave him permission to install the cameras. During the early morning hours of December 16, 1995, Wholey and Darlene Hill, the Security Manager for the Glen Burnie Sears, installed the cameras. Wholey remained at the store. Later that morning, but before the store manager arrived at work, Wholey called Eiseman and reported that the cameras had been installed. During this conversation, Wholey was watching Afterward, Hill went home and

the store's security cameras and noticed Sam Alexander, the District Store Manager and Eiseman's superior, enter the store. Wholey asked Eiseman whether he had told Alexander about the installation of the cameras in the store manager's office.

1

The cameras in question did not record sounds. -4-

Eiseman

replied

that

he

had

not.

Eiseman

then

ended

the

conversation with Wholey and called Alexander. Sometime in the next two hours, Eiseman made a return call to Wholey and told him not to use the cameras in the store manager's office and to disable them. Eiseman explained that he

had told Alexander and Thomas Peake, Sears's Human Resources Manger for the Northeast Region, about the cameras and they had ordered that the cameras not be used, because the store manager "deserve[d] more respect." Wholey complied with Eiseman's

directive and disabled and removed the cameras. his investigation of the store manager.

He discontinued

Throughout the time he was investigating the store manager, Wholey never saw the store manager commit the crime of theft (or any other crime). Also, at no time during the investigation did

Wholey act in his capacity as a deputy sheriff for the Anne Arundel County Sheriff's Department. On February 6, 1996, Wholey was terminated from his

employment by Sears.

Eiseman met with him that day and told him

that Alexander and Peake had not approved of his handling of the investigation of the store manager (particularly, the When

installation of cameras in the store manager's office).

Eiseman asked Wholey to resign, Wholey refused, and then was fired. Seven months later, Wholey brought this suit against

-5-

Sears and Eiseman, in the Circuit Court for Anne Arundel County.2

Sears maintained that it terminated Wholey's employment because he mishandled security problems that occurred at the Glen Burnie store during a severe blizzard in January 1996. Wholey took the position that that was a pretext, and that the true reason for his firing was in retaliation for his

investigating suspected theft by the store manager.

In the

posture in which this appeal presents itself, we shall assume that Sears discharged Wholey for his handling of the

investigation of the store manager, as Wholey contended, and not for any alleged actions or inactions by him during the January 1996 blizzard. With respect to the wrongful discharge claim, Sears filed a motion to dismiss, which was denied, and then a motion for summary judgment, which also was denied. argued that, assuming the facts as In both motions, it and as later

alleged

testified by Wholey in deposition, Wholey's termination from employment did not violate a clear mandate of public policy, and thus was not actionable. See Adler v. American Standard Corp.,

As originally filed, Wholey's complaint stated claims for wrongful discharge, defamation, and breach of contract against both defendants. The circuit court granted motions to dismiss the breach of contract claims. Its ruling in that regard is not an issue in this appeal. -6-

2

291 Md. 31 (1981) ("Adle r I ").

Sears advocated that position

again during trial, when it moved for judgment at the close of Wholey's case and again at the close of the entire case. Each time Sears raised this issue, Wholey responded by arguing that the public policy of Maryland favors the investigation and prosecution of crimes and that when Sears terminated him for investigating suspected theft by the store manager, it did so in contravention of that clear mandate of public policy. The trial court agreed with Wholey on the public policy issue. After denying Sears's motions for judgment, it

instructed the jury as follows, over Sears's objection: [I]n order to recover for wrongful discharge, [Wholey] must show, one, an at-will employment relationship; two, that he was terminated by the employer and that the discharge was contrary to a clear mandate of public policy. . . . Now, there is a clear public policy in Maryland favoring the investigation and prosecution of criminal offenses. If you find that the motivation of [Sears] in firing [Wholey] was in retaliation to [Wholey's] investigatory activities, then that motivation would contravene the stated public policy of Maryland. You must also find that [Wholey's] investigatory activities were lawful and in accordance with the stated procedures set forth by [Sears]. Within ten days after entry of judgment, Sears filed a motion for judgment notwithstanding the verdict, again asserting that Wholey's discharge did not violate a clear mandate of public policy. Sears also filed a motion for a new trial, in -7-

which it argued that the jury had failed to consider the issue of mitigation of damages. on July 12, 1999. Sears then noted a timely appeal. The circuit court denied both motions

DISCUSSION
Sears contends that with respect to Wholey's wrongful

discharge claim, the circuit court erred in denying its motions to dismiss, for summary judgment, for judgment, and for judgment notwithstanding the verdict, and in instructing the jury,

because on the version of the facts most favorable to Wholey, his termination from employment did not violate a clear mandate of public policy, as a matter of law. Sears argues that there

is no clear mandate of public policy favoring the investigation of suspected criminal activity in Maryland; therefore, Wholey's claim was without legal foundation. In pressing this argument,

Sears relies primarily upon the decision of the United States Court of Appeals for the Fourth Circuit in Adler v. American Standard Corporation, 830 F.2d 1303 (4th Cir. 1987) ("Adler III").3

3

The questions presented by Sears in its brief are: 1. Whether the trial court erred in denying Appellant's Motion for Summary Judgment. 2. Whether the trial court erred in denying Appellant's Motion for Judgment and Motion for (continued...) -8-

Wholey counters that the circuit court properly concluded, as a matter of law, that in Maryland there is a clear mandate of public policy in favor of investigating criminal activity.

Therefore, its denial of Sears's motions and its instruction to the jury were not in error. In advancing his argument, Wholey

relies primarily upon the Court of Appeals's favorable reference to Palmateer v. International Harvester, 421 N.E.2d 876 (Ill. 1981), in Adler I, 291 Md. at 39. Wholey was an at-will employee of Sears: He did not have

an employment contract and was hired for an indefinite term. See Samuels v. Tschechtelin, 135 Md. App. 483, 525 (2000)

(citing Hrehorovich v. Harbor Hosp. Ctr., 93 Md. App. 772, 790 (1992); Shapiro v. Massengill, 105 Md. App. 743, 754 (1995)). Ordinarily, an at-will employee may be discharged by his

employer for any reason or for no reason.

Bagwell v. Peninsula

Reg'l Med. Ctr., 106 Md. App. 470, 494-95 (citations omitted). The tort of wrongful discharge is a narrow exception to this well-established principle. The elements of the tort are: "(1)

3

(...continued) Judgment Notwithstanding the Verdict. 3. Whether the trial court erred in its instructions to the jury. 4. Whether the trial court erred in denying Appellant's Motion to Dismiss the Complaint. 5. Whether the trial court abused its discretion in denying Appellant's Motion for New Trial. -9-

that

the

employee

was

discharged;

(2)

that

the

dismissal

violated some clear mandate of public policy; and (3) that there is a nexus between the defendant and the decision to fire the employee." Shapiro, 105 Md. App. at 764 (citing Leese v.

Baltimore County, 64 Md. App. 442, 468 (1985)).

A public policy

must be clearly mandated to serve as a basis for a wrongful discharge action because that "limits judicial forays into the wilderness of discerning 'public policy' without clear direction from a legislature or regulatory source." Milton v. IIT

Research Inst. , 138 F.3d 519, 523 (4th Cir. 1998); see also Gaskins v. Marshall Craft Assocs., 110 Md. App. 705, 715 (1996) (citation omitted). "When a plaintiff fails to demonstrate that

his or her grievance is anything more than a private dispute regarding the employer's execution of normal management

operating procedures, there is no cause of action for [wrongful] discharge." Lee v. Denro, 91 Md. Ap. 822, 833 (1992).

"`Legislative enactments, prior judicial decisions, [and] administrative regulations' are `the chief sources of public policy.'" Bleich v. Florence Crittenton Servs. of Baltimore ,

Inc., 98 Md. App. 123, 134 (1993) (quoting Lee, 91 Md. App. at 830 (citation omitted). mandate of public policy While it is possible that a clear may exist in the absence of a

constitutional, statutory, or regulatory pronouncement, -10-

this

possibility

"should

be

accepted

as

the

basis

of

judicial

determination, if at all, only with the upmost circumspection.'" Townsend v. L.W.M. Mgmt., Inc., 64 Md. App. 55, 61-62 (1985) (quoting Patton v. United States, 281 U.S. 276, 306 (1930)); see also Bagwell , 106 Md. App. at 495-96 ("[R]ecognition of an otherwise undeclared public policy as a basis for judicial

decision involves the application of a very nebulous concept to the facts of the case, a practice which should be employed sparingly, if at all." (citations and internal quotation marks omitted)); Lee, 91 Md. App. at 831 (noting that, although

"Maryland appellate courts have decided several cases involving [wrongful] discharge claims since Adler, they have never found such a claim to be stated absent a discharge which violates a public policy set forth in the constitution, a statute, or the common law") (citations omitted). The Court of Appeals first recognized the tort of wrongful discharge in Adler I, supra, 291 Md. 31, in which it was

responding to two certified questions posed by the United States District Court for the District of Maryland. facts of Adler I are as follows. The pertinent

Three years after Gerald F.

Adler was hired by American Standard, he was appointed acting president of one of its subsidiary companies. Adler discovered

that the outgoing president of the subsidiary, Bernard Greene, -11-

had been using a company account to pay kickbacks to clients and had been altering company records to cover up the scheme. Adler

reported this information to two of his superiors and told them that he planned to disclose it to high company officials at an upcoming meeting. The night before the meeting, Adler's

superiors fired him.

Soon afterwards, Greene was reappointed

president of the subsidiary company. Adler sued American Standard for wrongful discharge,

alleging, inter alia, that he had been discharged to prevent his disclosure of a number of "improper and possibly illegal

practices," by Greene and American Standard.

(These practices

included attempts to treat capital expenditures as expenses; payment of commercial bribes; falsification of corporate sales and income data and alteration of commercial documents to

support the falsified information; misuse of corporate funds by officers for their personal benefit; manipulation of work-inprogress inventory information; and alteration of forecasts in connection with intra-corporate financial reporting.) 291 Md. at 33. Adler I,

The district court certified two questions to

the Court of Appeals: (1) Is a cause of action for "[wrongful] discharge" recognized under the substantive law of the State of Maryland? [and]

-12-

(2) Do the allegations [by Adler], if taken as true, state a cause of action for "[wrongful] discharge" under the substantive law of the State of Maryland? Id. at 32. After surveying decisions of courts that had considered the cause of action for wrongful discharge, discussing those

decisions adopting the tort, and examining the violations of public policy that other courts had ruled sufficient to make the discharge of an at-will employee actionable, the Court of It

Appeals responded affirmatively to the first question.

answered the second question in the negative, however, saying that Adler's allegations were not sufficient to state a cause of action for wrongful discharge. Adler had argued, inter alia ,

that Greene's conduct violated Md. Code (1957, 1976 Repl. Vol.) art. 27

Download Sears v. Wholey.pdf

Maryland Law