This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
Two employees of the Hubbard Museum, a nonprofit corporation, were terminated after the museum decided to exclude three valuable artworks from a proposed gift to the state. The employees had raised concerns about the ethical implications of removing the artworks and one of them informed a state official about the deaccessioning of the pieces. The state ultimately declined the gift, and the employees alleged they were fired in retaliation for their actions, which they claimed were protected by public policy encouraging the reporting of fraud.
Procedural History
- District Court, Lincoln County: Granted summary judgment in favor of the Defendant, finding that the Plaintiffs failed to establish their claims for retaliatory discharge.
Parties' Submissions
- Plaintiffs-Appellants: Argued that their terminations were retaliatory and violated public policy, as they were fired for reporting what they believed to be fraudulent conduct by the Defendant to the state. They relied on the public policy exception to at-will employment established in Garrity v. Overland Sheepskin Co..
- Defendant-Appellee: Contended that the Plaintiffs lacked probable cause to believe that any fraud had occurred and that their actions were not protected under public policy. The Defendant argued that the Plaintiffs’ disclosures were premature and unrelated to any wrongdoing.
Legal Issues
- Did the Plaintiffs have probable cause to believe that the Defendant engaged in fraudulent conduct, thereby making their actions protected under public policy?
- Does public policy encourage the Plaintiffs’ actions in reporting the deaccessioning of the artworks during preliminary negotiations that did not result in an agreement?
Disposition
- The Court of Appeals affirmed the district court’s decision to grant summary judgment in favor of the Defendant.
Reasons
Per Cynthia A. Fry, Chief Judge (Bustamante and Garcia JJ. concurring):
The Court found that the Plaintiffs failed to establish a prima facie case of retaliatory discharge. It concluded that the Defendant’s actions did not constitute wrongdoing, as the exclusion of the artworks was disclosed to the state during preliminary negotiations, and no agreement was ever finalized. The Plaintiffs’ disclosures were deemed premature and not encouraged by public policy. The Court emphasized that retaliatory discharge is a narrow exception to at-will employment and should not be unduly broadened. The absence of any evidence of fraud or wrongdoing by the Defendant rendered the Plaintiffs’ claims unsustainable.