March 26, 2015
COMMUNITY CARE CENTER OF ABERDEEN
MARY ARNETTA BARRENTINE
COURT FROM WHICH APPEALED: MONROE COUNTY CIRCUIT COURT. DATE OF JUDGMENT: 03/13/2014. TRIAL JUDGE: HON. JAMES SETH ANDREW POUNDS.
AFFIRMED AND REMANDED.
FOR APPELLANT: JOHN L. MAXEY, II, S. MARK WANN, KELLY HOLLINGSWORTH STRINGER.
FOR APPELLEE: JIM WAIDE, RON L. WOODRUFF.
BEFORE DICKINSON AND RANDOLPH, P.JJ., AND LAMAR, J. WALLER, C.J., RANDOLPH, P.J., LAMAR, KITCHENS, PIERCE, KING AND COLEMAN, JJ., CONCUR. CHANDLER, J., NOT PARTICIPATING.
NATURE OF THE CASE: CIVIL - OTHER
¶1. A nursing home employee filed a wrongful-discharge suit more than a year after she claims she was fired for reporting suspected patient abuse. Although wrongful-discharge suits in Mississippi generally must be based upon written employment contracts, she claims her suit falls under the public-policy exceptions this Court announced in McArn v. Allied Bruce-Terminix Co., Inc. The issue presented is whether--as she argues--her wrongful-discharge suit is governed bye the general three-year statute of limitations governing torts, or--as the nursing home argues--it is governed by the one-year statute of limitations applicable to unwritten employment contracts. The trial court held McArn wrongful-discharge claims are tort actions, subject to the general three-year statute of limitations. We agree.
FACTS AND PROCEDURAL HISTORY
¶2. On November 15, 2012, Mary Barrentine sued Community Care Center of Aberdeen " for discharge in violation of public policy," alleging she was wrongfully discharged from her nursing position on April 29, 2011, after she reported suspected nursing-home patient abuse to the State Ombudsman and Community Care Center's corporate compliance officer. Community Care Center responded with a motion for summary judgment, arguing that Barrentine's claims were based upon an unwritten employment contract and, thus, barred by Section 15-1-29's one-year statute of limitations. Barrentine opposed the motion, arguing that her suit sounded in tort and was governed by Section 15-1-49's three-year statute of limitations.
¶3. The trial court denied Community Care Center's motion for summary judgment, finding " that the statute of limitations for a cause of action of wrongful discharge in violation of Mississippi's [public] policy is three (3) years." Because this is an issue of first impression, we granted Community Care Center's Petition for Permission to File Interlocutory Appeal.
¶4. We review a trial court's denial of a motion for summary judgment de novo, because the " [a]pplication of a statute
of limitation is a question of law to which a de novo standard . . . applies." 
A. McArn Wrongful Discharge in Violation of Public Policy Claims
¶5. Mississippi rigidly follows the common law employment-at-will principle, that is, " a contract for employment for an indefinite period may be terminated at the will of either party, whether the discharge is for any reason or no reason at all."  But in McArn, this Court created two independent tort actions based on " a narrow public policy exception to the employment at will doctrine." 
¶6. In McArn, a former termite-control employee sued Terminix for wrongful discharge after he allegedly was fired for telling the State Department of Agriculture and other customers that their homes and businesses had not been properly treated. We held that " an employee who refuses to participate in an illegal act . . . shall not be barred by the common law rule of employment at will from bringing an action in tort for damages against his employer."  We also held that " an employee who is discharged for reporting illegal acts of his employer to the employer or anyone else is not barred by the employment at will doctrine from bringing action in tort for damages against his employer."  We described these torts as " public policy exceptions to the age old common law rule of employment at will," and we held that " [t]hese exceptions apply even where there is 'privately made law' governing the relationship, where the illegal activity either declined by the employee or reported by him affects third parties among the general public, though they are not parties to the lawsuit." 
¶7. In Willard v. Parcelsus Health Care Corp., (Willard I), this Court again recognized " [t]he exception to the employment-at-will doctrine sounds in tort, and we recognize, as the majority of jurisdictions do, that a party is entitled to pursue all remedies available in tort, including punitive damages."  In Willard I, community hospital employees sued the hospital's parent company for wrongful discharge after they allegedly were fired for reporting illegal activities of another hospital employee.
¶8. We now must address an unfortunate ambiguity created in Willard II, wherein this Court remarked that " [t]he basis of the action in this case is breach of the employment contract."  We explained that
[r]etaliatory discharge, found by this Court to be an independent tort in Willard I, is but another form of tortious breach of contract. Describing retaliatory discharge as an independent tort does not mean that the underlying cause
of action is not one for breach of contract.
¶9. The Court in Willard II--citing two Michigan state cases and a Northern District of Indiana case--stated that " several courts have found that an action for retaliatory discharge is a contract action."  This was an erroneous conclusion.
¶10. The Supreme Court of Michigan in Phillips v. Butterball Farms Co., Inc.--a case cited approvingly by this Court in Willard II--actually held that a claim for retaliatory discharge of an employee who files a workers' compensation claim is grounded in tort law. In fact, the court specifically rejected the defendant's argument that such a claim was based on contract and held that " [t]he duty not to retaliate against an employee for filing a workers' compensation claim arises independently from the employment contract." 
¶11. The Michigan Supreme Court's decision in Phillips undermined the Michigan Court of Appeals' holding in Mourad v. Automobile Club Insurance Association, that retaliatory demotion is based on a breach of a just-cause contract. Mourad was the other Michigan case cited approvingly by this Court in Willard II.
¶12. Today, we clear up the ambiguity by affirming our decision in McArn that claims of wrongful discharge in violation of public policy are independent tort actions. Our holding today is in concert with the majority view in this country.
¶13. Because McArn wrongful-discharge claims are independent tort actions, we must necessarily reject Community Care Center's argument that such claims are based on an unwritten employment contract. They are not. As stated by one legal authority, " [c]ourts holding that a cause of action for wrongful discharge in violation of public policy sounds in tort recognize that the duties breached by the employers in the cases were not part of any contract between the employee and the employer but were duties imposed by law outside the contract." 
¶14. A McArn claim alleging wrongful discharge in violation of public policy is based on an employer's duty not to thwart the public interest by terminating employees for speaking the truth. Having found that McArn claims are tort-based actions, we next analyze which statute of limitations applies to such claims.
B. Applicable Statute of Limitations
¶15. We have considered which statute of limitations applies in other employment-related disputes. For instance, in Avery, Shanks & Waltman, Inc. v. Giordano-Kirby Insurance Agency, Inc., a pre-McArn case, this Court overruled a trial court's dismissal of a claim by one corporation against another under Section 15-1-29's one-year statute of limitations for
breach of oral employment contracts. This Court held that the trial court erred in dismissing the action under the one-year statute of limitations, because " [t]his was not a suit by employees to obtain reinstatement, or damages for wrongful termination of employment." 
¶16. Relying on Avery, Shanks & Waltman, Inc., the United States Court of Appeals for the Fifth Circuit found in White v. United Parcel Service that this Court had " implicitly recognized" that Section 15-1-29 " applied to a 'suit by employees to obtain reinstatement, or damages for wrongful termination of employment.'"  However, the issue in White concerned only whether the one-year statute of limitations in Section 15-1-29 applied to 42 U.S.C. Section 1981 employment-discrimination claims. The Fifth Circuit concluded that the statute of limitations governing claims for breach of an unwritten employment contract should apply over the then six-year catch-all statute of limitations in Section 15-1-49. However, the United States Supreme Court ultimately overruled White and held that state statutes of limitations governing personal injury actions were more appropriate for Section 1981 employment-discrimination claims.
¶17. And in Michael S. Fawer v. Evans, this Court--in answering a certified question from the Fifth Circuit--found that Section 15-1-29's one-year statute of limitations did not apply to a contract dispute between an attorney and his former client. The Court held that " [t]he phrase 'actions on unwritten contracts of employment' in [Section 15-1-29], applies only to traditional employer-employee situations."  So " an attorney's action against his client for fees for professional legal services rendered by the attorney to the client on open account pursuant to an unwritten agreement is subject to the three-year limitations period . . . not the one-year limitation period . . . ." 
¶18. The Court of Appeals, at times, has held that the Section 15-1-29's one-year statute of limitations applies to McArn wrongful-discharge claims, and at other times, has held that the Section 15-1-49's three-year statute of limitations applies. Both the northern and southern federal district courts consistently have applied
the one-year statute of limitations in Section 15-1-29.
¶19. The parties have argued that this Court's opinions in Sloan v. Taylor Machinery Co., and Bobbitt v. Orchard, Ltd., are relevant to determining the applicable statute of limitations. However, those cases address only whether an employee handbook can form the basis of a written employment contract. That issue is not before us.
¶20. So, to summarize our holdings, in Avery, Shanks & Waltman, Inc., this Court tacitly acknowledged that Section 15-1-29 applied to suits " to obtain reinstatement, or damages for wrongful termination of employment."  And the Fifth Circuit recognized this in White. Finally, in Michael S. Fawer, we held that the one-year statute of limitations applies to " traditional employer-employee situations."  With these principles in mind, we now will attempt to reconcile our cases.
¶21. Although we said in Avery, Shanks & Waltman, Inc. that a claim based on wrongful termination was governed by the one-year statute of limitations in Section 15-1-29, we had not yet decided McArn. When we decided Avery, Shanks & Waltman, Inc., Mississippi employees had no action for wrongful discharge in violation of public policy. The only action available to them was a claim for breach of contract. But, as we explained above, McArn claims have nothing to do with the existence of a contractual relationship. So our holding in Avery, Shanks & Waltman, Inc. does not control our analysis. And, as we recognized in Michael S. Fawer, Section 15-1-29 applies only to traditional employment disputes. While McArn wrongful-discharge claims may be related to employment disputes, the employer's duty is based on matters external to the employment dispute. Thus, Michael S. Fawer does not control our analysis.
¶22. Both Avery, Shanks & Waltman, Inc. and Michael S. Fawer are instructive as to what sorts of claims should be subject to Section 15-1-29's one-year statute of limitations. For instance, a claim by an at-will employee--with no written employment contract--for verbally promised vacation days would be governed by Section 15-1-29. Such a claim would be based on the employer's alleged unwritten agreement. Likewise, an at-will employee's claim for the failure to give a promised performance or holiday bonus would fall within Section 15-1-29's purview.
¶23. But an independent tort action against an employer for wrongful discharge in violation of public policy has no relationship to the employment agreement
and cannot be subject to the statute of limitations in Section 15-1-29.
¶24. Because McArn claims are independent tort actions and are not based on any employment contract, they are not subject to Section 15-1-29's one-year statute of limitations. Section 15-1-49 provides that " [a]ll actions for which no other period of limitation is prescribed shall be commenced within three (3) years next after the cause of such action accrued, and not after." While we have not previously stated that this is the statute of limitations that applies to McArn claims, we do so today. Any language inconsistent with our holding today found in our previous decisions and decisions from the Court of Appeals is now overruled.
¶25. McArn wrongful-discharge claims are subject to Section 15-1-49's three-year statute of limitations. We affirm the trial court's denial of Community Care Center's motion for summary judgment, and we remand this case to the trial court for further proceedings consistent with this opinion.
¶26. AFFIRMED AND REMANDED.
WALLER, C.J., RANDOLPH, P.J., LAMAR, KITCHENS, PIERCE, KING AND COLEMAN, JJ., CONCUR. CHANDLER, J., NOT PARTICIPATING.