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Luisa Chavez-Lavagnino v. Motivation Education Training, 12-1058 (2014)

Court: Court of Appeals for the Eighth Circuit Number: 12-1058 Visitors: 43
Filed: Aug. 25, 2014
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals For the Eighth Circuit _ No. 12-1058 _ Luisa Chavez-Lavagnino and Debra Yanez, lllllllllllllllllllll Plaintiffs - Appellees, v. Motivation Education Training, Inc., and Amy Cerna, also known as Amy Cerna-Espinoza, lllllllllllllllllllll Defendants - Appellants. _ Appeal from United States District Court for the District of Minnesota - Minneapolis _ Submitted: March 5, 2014 Filed: August 25, 2014 _ Before RILEY, Chief Judge, COLLOTON and GRUENDER, Circuit Judges. _ C
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                 United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 12-1058
                         ___________________________

                    Luisa Chavez-Lavagnino and Debra Yanez,

                       lllllllllllllllllllll Plaintiffs - Appellees,

                                            v.

                   Motivation Education Training, Inc., and
                 Amy Cerna, also known as Amy Cerna-Espinoza,

                     lllllllllllllllllllll Defendants - Appellants.
                                       ____________

                     Appeal from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                             Submitted: March 5, 2014
                              Filed: August 25, 2014
                                  ____________

Before RILEY, Chief Judge, COLLOTON and GRUENDER, Circuit Judges.
                              ____________

COLLOTON, Circuit Judge.

      Luisa Chavez-Lavagnino and Debra Yanez alleged that their employer,
Motivation Education Training, Inc. (“MET”), and their supervisor, Amy Cerna,
terminated them in violation of Minnesota law for refusing to participate in MET’s
attempts to defraud the federal government. The case proceeded to trial, and the jury
found in favor of Chavez-Lavagnino and Yanez (the “employees”), awarding them
damages. MET and Cerna (the “defendants”) appeal from the district court’s denial
of their motion for judgment as a matter of law. We affirm in part, reverse in part,
and vacate and remand in part.

                                          I.

       Because we are reviewing the denial of the defendants’ motion for judgment
as a matter of law, we recite the facts in the light most favorable to the employees.
MET is a non-profit corporation that provides services and training to migrant and
seasonal farm workers. Much of MET’s funding comes from federal grants
distributed pursuant to the National Farmworker Jobs Program. Before MET may use
Program funds to assist a farmworker, federal law requires MET to ensure that the
worker satisfies certain eligibility requirements. See 29 U.S.C. § 2912. For example,
a recipient must be in the country legally, he must work primarily in agriculture, and
his income must not exceed a certain threshold. To confirm that a worker seeking
benefits is eligible to receive them, MET requires the worker to complete an
application and provide MET with certain documents. After MET assists a worker,
it creates a so-called follow-up note on him. The follow-up note documents how the
worker fared in the job market after receiving training or other services from MET.
MET submits the information in the follow-up notes to the Department of Labor
when it applies for renewal of its federal grants.

       Chavez-Lavagnino began working at MET’s office in Rochester, Minnesota,
in September 2008. In December, Chavez-Lavagnino’s supervisor, Cerna, ordered
her to forge a worker’s signature, because the worker failed to sign his application.
Chavez-Lavagnino refused. She explained to Cerna that breaking the law could
jeopardize her immigration status and cause her to lose custody of her daughter.
Cerna responded, “I can see that you are not willing to go an extra mile for your job.”
After that incident, Cerna treated Chavez-Lavagnino differently. Cerna began to
ignore Chavez-Lavagnino’s questions about the job, and she began verbally abusing

                                         -2-
Chavez-Lavagnino by calling her “stupid,” disparaging her physical appearance, and
mocking her ability to speak English.

      In January 2009, Cerna ordered Chavez-Lavagnino to begin forging follow-up
notes. Cerna explained that forging the follow-up notes would allow MET to
demonstrate that its clients were performing well and strengthen its next application
for grant money. Chavez-Lavagnino complied until late March or early April.
Chavez-Lavagnino then told Cerna she would no longer falsify the notes, because
doing so was illegal. MET fired Chavez-Lavagnino on May 1, 2009.

        Yanez began working at MET in June 2008. Yanez claims that during her time
at MET, Cerna instructed her to forge signatures, shred tax forms, falsify follow-up
notes, and register applicants whom Yanez knew to be in the country illegally.
Initially, Yanez complied, and she forged signatures on roughly seventy-five
applications so that the clients could receive Program funds. When Cerna next
ordered Yanez to forge signatures, however, Yanez refused. Cerna responded: “You
are not willing to go above and beyond the call of duty for your job.” Despite her
refusal to forge signatures, Yanez shredded tax forms, falsified follow-up notes, and
qualified applicants whom she knew to be ineligible until October 2008. In mid-
October, Yanez told Cerna that she would no longer break the law. Cerna responded,
“I guess you are not willing to go above and beyond the call of duty.” After that
conversation, Cerna reassigned much of Yanez’s work to other employees.

      On Wednesday, December 10, 2008, Yanez went home from work early
because she felt sick. The next morning, she received a voicemail from one of her
coworkers, Maria Davila, advising Yanez that she was fired for abandoning her post.
Davila testified that Cerna had instructed her to place the call and to tell Yanez that
she was fired. Yanez went to the office to collect her belongings on Friday. While
Yanez was packing, she spoke with Cerna on the phone. Cerna explained that her



                                         -3-
firing had been a mistake and told Yanez that she was welcome to resume her job.
Yanez told Cerna she would think about the offer, but decided not to return to MET.

       The employees initiated this action in Minnesota state court against MET and
Cerna, alleging that the defendants fired them in retaliation for their refusals to follow
Cerna’s illegal orders, in violation of Minnesota’s Whistleblower Act, Minn. Stat.
§ 181.932 subd. 1(3), and Minnesota common law. MET and Cerna removed the case
to federal court on the basis of diversity jurisdiction. The district court dismissed the
statutory claim against Cerna, but the statutory claim against MET and the common
law claims against both defendants were tried to a jury.

       The jury found in favor of the employees, awarding each employee the amount
she sought in lost wages: $53,183.42 for Chavez-Lavagnino, and $35,241.67 for
Yanez. After trial, the district court awarded the employees pre-judgment interest and
attorney’s fees, and denied the defendants’ motion for judgment as a matter of law.
We remanded the case after the defendants’ first attempt to appeal the judgment,
because Cerna’s citizenship was not clear from the record, so we could not determine
whether the district court properly exercised jurisdiction under 28 U.S.C. § 1332. See
Chavez-Lavagnino v. Motivation Educ. Training, Inc., 
714 F.3d 1055
(8th Cir. 2013).
The parties supplemented the record in the district court, and it is now clear that
diversity jurisdiction was proper. We review the district court’s denial of a motion
for judgment as a matter of law de novo, viewing the evidence in the light most
favorable to the verdict. S. Wine & Spirits of Nev. v. Mountain Valley Spring Co.,
646 F.3d 526
, 533 (8th Cir. 2011).

                                           II.

      The defendants’ principal argument on appeal is that the employees failed to
prove a violation of either Minnesota’s Whistleblower Act or the common law. The
elements of the employees’ statutory claims are similar but not identical to the

                                           -4-
elements of their common law claims. See Nelson v. Productive Alts., Inc., 
715 N.W.2d 452
, 455 n.3 (Minn. 2006) (recognizing that the common law cause of action
for wrongful discharge “may well be largely duplicative of the cause of action
available under the Whistleblower Act”). The statute provides that an employer
“shall not discharge . . . [or] otherwise discriminate against” an employee because
“the employee refuses an employer’s order to perform an action that the employee has
an objective basis in fact to believe violates any state or federal law . . . and the
employee informs the employer that the order is being refused for that reason.” Minn.
Stat. § 181.932, subd. 1(3). Under Minnesota common law, “an employee may bring
an action for wrongful discharge if that employee is discharged for refusing to
participate in an activity that the employee, in good faith, believes violates any state
or federal law.” 
Nelson, 715 N.W.2d at 455
(internal quotation omitted).

                                          A.

      The defendants first contend that the employees did not engage in protected
conduct, because they failed to prove that Cerna’s orders required them to break the
law. Under the statute, the employees must have had an “objective basis in fact” to
believe that the orders were illegal, Minn. Stat. § 181.932, subd. 1(3), and under the
common law they must have held that belief “in good faith.” 
Nelson, 715 N.W.2d at 455
.

       The Minnesota Supreme Court has not interpreted the phrase “objective basis
in fact” or elaborated on what “good faith” requires in the context of a common law
claim for retaliatory discharge. The term “good faith” appears in the portion of the
Act that protects employees who report illegal conduct. Minn. Stat. § 181.932,
subd. 1(1). A report is protected where, assuming the facts reported by the employee
are true, they would “constitute a violation of law.” Kratzer v. Welsh Cos., 
771 N.W.2d 14
, 22 (Minn. 2009) (internal quotation omitted). We need not decide
precisely what an “objective basis in fact” or “good faith” requires in this context,

                                          -5-
however, because the employees’ claims pass muster under any plausible
interpretation of those terms.

       At trial, the employees testified that they refused Cerna’s orders to forge
signatures, shred tax forms, qualify ineligible workers, and falsify follow-up notes.
The most natural inference from the evidence was that Cerna ordered the employees
to take those actions so that MET could disburse Program funds to ineligible workers,
falsely report to the government that MET was helping those workers succeed, and
in turn receive more grant money when MET next applied. Such orders, if executed,
would have violated 18 U.S.C. §§ 1001(a) and 1002, which prohibit making false
representations to and defrauding the federal government. There was thus sufficient
evidence to support the jury’s conclusion that the employees refused to engage in
illegal activity.

                                         B.

       The defendants next argue that Yanez’s discharge was not actionable under the
Act or the common law, because Cerna offered Yanez her job back shortly after
Yanez was fired. The parties agree that the Act and the common law contain a
materiality requirement akin to that of Title VII. They further agree that we should
look to cases construing Title VII to determine whether Yanez’s firing was a
sufficiently material adverse employment action.

       According to the defendants, an employee may state a claim under the Act and
the common law only if she suffers an “ultimate employment decision”—that is, a
decision effecting a demotion or a reduction of salary or benefits. See Leiendecker
v. Asian Women United of Minn., 
731 N.W.2d 836
, 841-42 & n.1 (Minn. Ct. App.
2007) (internal quotation omitted). The defendants maintain that because Cerna
attempted to rehire Yanez shortly after she was terminated, the temporary discharge



                                         -6-
did not satisfy this standard. See Keeton v. Flying J, Inc., 
429 F.3d 259
, 263-64 (6th
Cir. 2005); Pennington v. City of Huntsville, 
261 F.3d 1262
, 1267 (11th Cir. 2001).

        Leiendecker drew its “ultimate employment decision” test from this court’s
Title VII 
precedents. 731 N.W.2d at 841-42
& n.1. As the Leiendecker court noted,
however, the Supreme Court of the United States rejected this circuit’s interpretation
of Title VII’s anti-retaliation provision in Burlington Northern & Santa Fe Railway
Co. v. White, 
548 U.S. 53
, 67-68 (2006). Under Burlington, a retaliatory action is
materially adverse if it would likely dissuade a reasonable worker from engaging in
protected 
conduct. 548 U.S. at 68-69
. In Leiendecker, the Minnesota Court of
Appeals nonetheless appeared to apply the test that the Supreme Court had rejected
for federal law, while noting that Burlington left the standard “in doubt.” 
See 731 N.W.2d at 841-42
& n.1. We must determine what rule the Minnesota Supreme Court
is likely to apply. See Badrawi v. Wells Fargo Home Mortg., Inc., 
718 F.3d 756
, 758
(8th Cir. 2013).

       The defendants urge that the Minnesota Supreme Court already declined to
adopt Burlington’s materiality standard in Bahr v. Capella University, 
788 N.W.2d 76
(Minn. 2010). Although the claim in Bahr arose under the Minnesota Human
Rights Act, the Minnesota Supreme Court interprets that statute in light of Title VII,
see 
id. at 83,
so the defendants assert that Bahr controls our analysis of the
employees’ whistleblower claims. In Bahr, however, the court considered only
whether the employee had engaged in statutorily protected conduct. 
Id. at 81.
The
court did not decide whether to apply Burlington’s materiality standard to retaliation
claims.

      We think it more likely that the Minnesota Supreme Court would adopt the
Burlington standard and apply it to the employees’ claims. Title VII’s materiality
requirement is a judicial gloss on the meaning of “discrimination.” Washington v. Ill.
Dep’t of Revenue, 
420 F.3d 658
, 661-62 (7th Cir. 2005). Like Title VII’s

                                         -7-
antiretaliation provision, Minnesota’s Whistleblower Act makes it illegal to
“discriminate against” an employee who engages in certain protected activities.
Compare 42 U.S.C. § 2000e–3(a), with Minn. Stat. § 181.932, subd. 1. The
Minnesota Supreme Court frequently interprets Minnesota statutes containing
language similar to Title VII’s in light of the Supreme Court’s interpretation of Title
VII, see, e.g., LaMont v. Indep. Sch. Dist. No. 728, 
814 N.W.2d 14
, 21 (Minn. 2012),
and we see no reason why the Minnesota court would be unlikely to do so here.
Given the substantial similarities between the Act and the common law, see 
Nelson, 715 N.W.2d at 455
n.3, we believe the Minnesota Supreme Court would apply the
same materiality standard to the employees’ common law claims.

       Under Burlington, Yanez presented sufficient evidence to support a finding that
she suffered an adverse employment action. Yanez’s last time sheet shows that MET
classified the hours during which she was fired as “release time.” Yanez accumulated
release time during her employment at MET, and she ordinarily would have been free
to use that time at her discretion, for whatever purpose she chose. T. Tr. 613-14. But
here, Yanez was forced to use her release time in the wake of her termination.
Sapping an employee’s release time, like taking her vacation time, can amount to “an
effective reduction in salary.” 
Washington, 420 F.3d at 662
. The prospect of being
fired temporarily and charged with release time until the firing is rescinded could
likely dissuade a reasonable employee from engaging in protected activity. See
Young-Losee v. Graphic Packaging Int’l, Inc., 
631 F.3d 909
, 913 (8th Cir. 2011)
(“Being fired for making a discrimination complaint—even if rescinded after two
days—might well dissuade a reasonable employee from making a complaint of
harassment.”).

                                          C.

      The defendants maintain that the employees presented insufficient evidence of
causation. They contend that the only evidence tending to establish causation was the

                                         -8-
temporal proximity between the employees’ protected activities and their firings, and
that the gaps between the events were too long to support the jury’s verdict.

       The employees relied on temporal proximity, but that was not their only
evidence on causation. On timing, viewed most favorably to the employees, the
record reflects that each was fired within approximately six weeks of refusing to carry
out an illegal directive. The jury properly could have considered the six-week gaps
as some evidence of a causal relationship between the employees’ refusals and their
firings. See Bennett v. Riceland Foods, Inc., 
721 F.3d 546
, 551-52 (8th Cir. 2013).
In addition, however, both employees testified that Cerna responded to their refusals
by expressing doubts about their commitments to their jobs. After Chavez-Lavagnino
refused to forge signatures, Cerna said “I can see that you are not willing to go an
extra mile for your job.” When Yanez announced her decision to cease all illegal
conduct, Cerna replied “I guess you are not willing to go above and beyond the call
of duty.” The jury could have inferred from Cerna’s statements that she viewed the
employees’ willingness to comply with her illegal orders as an important part of their
jobs. Cerna’s statements, in combination with the relatively short period separating
the protected activities from the firings, were sufficient to support the jury’s verdict.

        The defendants also contend that MET vested only its executive director—not
Cerna—with authority to fire employees, and that there is no evidence the executive
director had a retaliatory motive. Minnesota courts have concluded that the requisite
causal connection is absent “if the employer is not aware of the statutorily protected
activity.” Swanson v. State, No. A08-0553, 
2009 WL 671039
, at *4 (Minn. Ct. App.
Mar. 17, 2009) (unpublished); see also Grothe v. Ramsey Action Programs, Inc., No.
A05-1503, 
2006 WL 1529447
, at *5 (Minn. Ct. App. June 6, 2006) (unpublished).
But even assuming the jury agreed that only MET’s executive director had authority
to fire employees, the executive director is not the only relevant corporate actor. We
have noted in the analogous Title VII context that “an employer may be vicariously
liable for an adverse employment action if one of its agents—other than the ultimate

                                          -9-
decision maker—is motivated by discriminatory animus and intentionally and
proximately causes the action.” 
Bennett, 721 F.3d at 551
; see also Staub v. Proctor
Hosp., 
131 S. Ct. 1186
, 1190-91, 1194 (2011). There is Minnesota authority applying
this so-called cat’s paw theory in the employment-discrimination context, see Alagok
v. State, No. A12-1658, 
2013 WL 1707692
, at *1, *5-6 (Minn. Ct. App. Apr. 22,
2013) (unpublished), and we think it likely that the Minnesota courts would apply the
same analysis under the Whistleblower Act and the common law.

        Ample testimony demonstrated Cerna’s role in Chavez-Lavagnino’s firing.
Cerna testified that she had “constant contact” with her supervisor, that she
specifically recommended Chavez-Lavagnino’s termination to him, and that he
passed along the recommendation to the executive director. That supervisor in turn
testified that the executive director followed his recommendations “[a] lot of times,
but not always.” Even if the executive director did not know of Chavez-Lavagnino’s
refusal to violate the law, the evidence was sufficient for the jury to find that Cerna
proximately caused her termination, and that Cerna was motivated by a desire to
retaliate against her.

       As for Yanez, the jury reasonably could have determined that MET was bound
by Cerna’s communication to Yanez that she was fired, because Cerna had at least
apparent authority to effect Yanez’s termination. Apparent authority exists when a
principal holds out a person as having authority to act on the principal’s behalf, and
a third party—on the basis of the principal’s manifestations—reasonably believes the
person to have that authority. See Powell v. MVE Holdings, Inc., 
626 N.W.2d 451
,
457 (Minn. 2001). The Minnesota courts have looked to the Restatement (Third) of
Agency to guide their analysis of issues relating to agents. See Graff v. Robert M.
Swendra Agency, Inc., 
800 N.W.2d 112
, 117 n.4 (Minn. 2011); see also Cascades
Dev. of Minn., LLC v. West Bend Mut. Ins. Co., No. A12-2184, 
2013 WL 2928150
,
at *4 (Minn. Ct. App. June 17, 2013) (unpublished) (discussing apparent authority
and citing Graff as authorizing Minnesota courts to consider the Restatement (Third)

                                         -10-
of Agency as persuasive authority). The Restatement explains that “[a]pparent
authority in an organizational setting may . . . arise from the fact that a person
occupies a type of position that customarily carries specific authority although the
organization has withheld such authority from that agent.” Restatement (Third) of
Agency § 3.03 cmt. c (2006). So too, “[a] circumstance that lends weight to an
appearance of authority is the fact that an organization has placed an agent in charge
of a geographically distinct unit or branch or of a specific function or activity.” 
Id. § 3.03
cmt. d.

       Cerna testified that she was “in charge of the region which was Minnesota and
North Dakota,” and that the executive director relied significantly on her to manage
the offices within her region. Cerna was intimately involved in Yanez’s hiring: She
accepted Yanez’s application; she had several conversations with Yanez about the
position and Yanez’s qualifications; and she communicated to Yanez that she was
hired. Under these circumstances, a jury could find that a reasonable employee in
Yanez’s position would believe that Cerna had authority to terminate her
employment. MET was therefore bound by Cerna’s exercise of her apparent
authority, and Cerna’s knowledge of Yanez’s refusal to violate the law was sufficient
to demonstrate causation under the Whistleblower Act and the common law. The
defendants contend that Yanez did not press an argument of apparent authority in the
district court, but Yanez argued at trial that MET acted through Cerna as its agent,
T. Tr. 768-71, and the defendants recognized that apparent authority was raised in
response to their motion for judgment as a matter of law, see R. Doc. 139, at 8, so
there were opportunities to address the point. In any event, this court may affirm the
judgment on any ground supported by the record, “even if the issue was not pleaded,
tried, or otherwise referred to in the proceedings below.” Brown v. St. Louis Police
Dep’t, 
691 F.2d 393
, 396 (8th Cir. 1982).




                                         -11-
                                         III.

      The defendants argue that even if the verdict was supported by sufficient
evidence, only employers—not supervisors—can commit the tort of wrongful
discharge, so the judgment against Cerna must be reversed. The Minnesota Supreme
Court has not addressed whether a supervisor may be liable for wrongful discharge,
and the question has divided other courts that have considered it.

       We believe the Minnesota Supreme Court is likely to hold that a supervisor
cannot be individually liable for the tort of wrongful discharge. The rationale of the
courts taking that view is likely to be more persuasive: Because the tort requires the
existence of an employer-employee relationship, an agent “cannot commit the tort of
wrongful discharge . . .; rather, he or she can only be the agent by which an employer
commits that tort.” Miklosy v. Regents of Univ. of Cal., 
188 P.3d 629
, 644 (Cal.
2008). “Logically speaking, only ‘the employer’ has the power to hire or fire an
employee.” Buckner v. Atl. Plant Maint., Inc., 
694 N.E.2d 565
, 569 (Ill. 1998).
Individual liability for supervisors is not necessary to deter unlawful conduct by
employees who induce a wrongful discharge, because the employer will be liable for
discharge, and “it is likely that the employer itself will act to ‘deter’ that agent or
employee from repeating such conduct.” 
Id. at 601.
Courts in several jurisdictions
apply this rule. Johnson v. Lone Wolf Wireline, Inc., No. 2:12CV1087, 
2013 WL 1899920
, at *4-5 (D. Utah May 7, 2013) (applying Utah law); Hooper v. North
Carolina, 
379 F. Supp. 2d 804
, 814-15 (M.D.N.C. 2005) (applying North Carolina
law); Rebarchek v. Farmers Coop. Elevator, 
35 P.3d 892
, 903-04 (Kan. 2001);
Schram v. Albertson’s, Inc., 
934 P.2d 483
, 490-91 (Or. Ct. App. 1997); Physio GP,
Inc. v. Naifeh, 
306 S.W.3d 886
, 888-89 (Tex. App. 2010).

       The employees note that as a general matter, an agent “‘is subject to liability
to a third party harmed by the agent’s tortious conduct,’ even when the agent’s
conduct may also subject the principal to liability.” Graff v. Robert M. Swendra

                                         -12-
Agency, Inc., 
800 N.W.2d 112
, 117 n.4 (Minn. 2011) (quoting Restatement (Third)
of Agency § 7.01 (2006)). Some courts allowing supervisor liability reason that “[i]n
a wrongful discharge case, the tortious act is not the discharge itself; rather, the
discharge becomes tortious by virtue of the wrongful reasons behind it.” VanBuren
v. Grubb, 
733 S.E.2d 919
, 923 (Va. 2012). That wrongful intent, the argument goes,
“is the undesirable, injurious act prohibited by the tort,” and a supervisor should be
held liable to the extent that she shares it. Jasper v. H. Nizam, Inc., 
764 N.W.2d 751
,
776 (Iowa 2009). We do not think the Minnesota court would be convinced. Unless
the employer has authorized the firing, the agent is without power to destroy the
employment relationship, and there can thus be no discharge, wrongful or otherwise.
See 
Miklosy, 188 P.3d at 645
& n.8. The supervisor has no independent capacity to
commit the tort, so the general rule about agent liability reflected in Graff has no
application here.

      For these reasons, we conclude that the judgment against Cerna must be
reversed.

                                         IV.

      Finally, the defendants contend that the district court erred by granting the
employees’ motion for pre-judgment interest and attorney’s fees. They argue that the
motion for pre-judgment interest was untimely and that the district court’s award of
$95,106.00 in attorney’s fees was excessive.

       A post-judgment motion for pre-judgment interest is a motion under Federal
Rule of Civil Procedure 59(e), even where, as here, the prevailing party is entitled to
such interest as a matter of right. Osterneck v. Ernst & Whinney, 
489 U.S. 169
, 175-
76 & n.3 (1989); Crowe v. Bolduc, 
365 F.3d 86
, 92-93 (1st Cir. 2004). Under Rule
59(e), a party must file a motion to alter or amend a judgment within twenty-eight
days after the entry of judgment. Fed. R. Civ. P. 59(e). The district court entered its

                                         -13-
judgment on May 19, 2011, and the employees did not file their motion seeking
interest until June 21. The motion for pre-judgment interest was therefore untimely,
and it should have been rejected. Reyher v. Champion Int’l Corp., 
975 F.2d 483
, 489
(8th Cir. 1992).

       The employees sought $105,673.33 in attorney’s fees. The district court
determined that the hourly rate used by the employees to calculate their fees was
reasonable and noted that the case had been “highly contested,” but nonetheless
awarded the employees only 90 percent of the amount requested, $95,106.00, because
it found that the request contained some excessive charges. The defendants contend
that the court should have further reduced the award, because the employees did not
prevail on every claim originally raised in their complaint. They also contend that the
employees’ attorneys were grossly inefficient and billed time spent performing
unnecessary tasks.

       The Whistleblower Act authorizes an award of reasonable attorney’s fees,
Minn. Stat. § 181.935(a), and we review the district court’s decision regarding what
constitutes a reasonable fee for abuse of discretion. Gen. Mills Operations, LLC v.
Five Star Custom Foods, Ltd., 
703 F.3d 1104
, 1112 (8th Cir. 2013). In the posture
that the matter was considered by the district court, we see no abuse of discretion.
The employees prevailed on their claims for lost wages. The district court reasonably
determined that the employees’ level of success, in combination with the length and
intensity of the litigation, justified awarding the employees most, but not all, of their
requested fees. In this opinion, however, we reverse the judgment against Cerna.
Although the district court commented that “the verdict would remain the same”
regardless of Cerna’s individual liability, R. Doc. 149, at 10, we cannot be sure that
the award of attorney’s fees would have been unaffected. Therefore, we vacate the
award and remand for further consideration of the application for attorney’s fees.

                                   *       *       *

                                          -14-
      For the foregoing reasons we affirm the judgment against MET, reverse the
judgment against Cerna and the award of pre-judgment interest, vacate the award of
attorney’s fees, and remand for further consideration of the application for attorney’s
fees.

RILEY, Chief Judge, concurring in part and dissenting in part.

      Part III’s prediction about Minnesota law does not convince me, and I
respectfully dissent from that portion of the court’s opinion.

       Quoting a California case, the court writes without qualification that “an agent
cannot commit the tort of wrongful discharge.” Ante at 12 (internal quotation
omitted). That premise is far from well established. See, e.g., VanBuren v. Grubb,
733 S.E.2d 919
, 922-23 (Va. 2012) (joining the District of Columbia and the states
of Arizona, Iowa, New Jersey, Pennsylvania, and West Virginia in holding an
employer’s supervisory agent may commit the tort of wrongful discharge). Yet Part
III predicts Minnesota would follow California.

      Like the Minnesota resident district judge in this case, I disagree. Under
Minnesota law, “[a] wrongful discharge claim sounds in tort.” Abraham v. Cnty. of
Hennepin, 
639 N.W.2d 342
, 352 (Minn. 2002). Based on Graff v. Robert M.
Swendra Agency, Inc., 
800 N.W.2d 112
, 117 n.4 (Minn. 2011), I believe the
Minnesota Supreme Court would generally agree with the Supreme Courts of Iowa
and Virginia:

      In a wrongful discharge case, the tortious act is not the discharge itself;
      rather, the discharge becomes tortious by virtue of the wrongful reasons
      behind it. Where those tortious reasons arise from the unlawful actions
      of the actor effecting the discharge, he or she should share in
      liability. . . . Limiting liability to the employer would follow a contract
      construct. Wrongful discharge, however, is an action sounding in tort.


                                         -15-
      While there are components of a contractual relationship, wrongful
      discharge remains a tort and tort principles must apply.

VanBuren, 733 S.E.2d at 923
(citing Jasper v. H. Nizam, Inc., 
764 N.W.2d 751
, 776
(Iowa 2009)).

      Part III of the court’s opinion rejects the VanBuren/Jasper approach because
“the agent is without power to destroy the employment relationship” without
employer authorization and “has no independent capacity to commit the tort” of
wrongful discharge. Ante at 13. That reasoning is unpersuasive. “The tort of
wrongful discharge does not impose liability for the discharge from employment, but
the wrongful reasons motivating the discharge.” 
Jasper, 764 N.W.2d at 776
.

       Here, the jury found Amy Cerna personally liable because her own motives and
conduct were illegal. That Cerna was acting as her employer’s agent and that her
employer, if held liable, “likely . . . will act to deter [Cerna] from repeating such
conduct,” ante at 12 (quotation omitted), does not shield Cerna from liability for her
own wrongful conduct because—according to well-established agency rules
recognized under Minnesota law—“employers and employees are deemed to be
jointly liable and jointly suable for the employee’s wrongful act,” 
VanBuren, 733 S.E.2d at 923
(internal quotation omitted). See 
Graff, 800 N.W.2d at 117
n.4 (the
Minnesota Supreme Court citing for authority and quoting Restatement (Third) of
Agency § 7.01 & cmt. b (2006) for the proposition “that an agent generally ‘is subject
to liability to a third party harmed by the agent’s tortious conduct,’ even when the
agent’s conduct may also subject the principal to liability”).

      Following Minnesota precedent and hornbook agency and tort law, I would
affirm the jury’s verdict.
                        ______________________________



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Source:  CourtListener

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