Kyle K. WALKER, Plaintiff-Appellant, Cross-Respondent,
STATE OF OREGON, by and through the Semi-Independent State Agency, the Oregon Travel Information Council, branded and doing business as the Oregon Travel Experience, Defendant-Respondent, Cross-Appellant.
and submitted April 13, 2018.
County Circuit Court 15CV02202 Mary Mertens James, Judge.
W. Reese argued the cause for appellant-cross-respondent.
Also on the briefs was Garrett Hemann Robertson PC.
G. Fjordbeck, Assistant Attorney General, argued the cause
for respondent-cross-appellant. Also on the briefs were Ellen
F. Rosenblum, Attorney General, and Benjamin Gutman,
Armstrong, Presiding Judge, and Tookey, Judge, and Shorr,
appeals a judgment of the trial court rejecting her statutory
whistleblowing claim under ORS 659A.203. The State of Oregon
cross-appeals, assigning error to the trial court's
denial of its motion for directed verdict on plaintiff's
common-law wrongful-discharge claim. Held: The trial
court erred in denying the state's motion for directed
verdict on plaintiff's common-law wrongful-discharge
claim because there was no evidence from which a jury could
[299 Or.App. 433] find that plaintiff had been discharged for
fulfilling an important public duty. In light of that
disposition, which requires reversal of the judgment for
plaintiff on her common-law wrongful-discharge claim, the
Court of Appeals rejected plaintiff's appeal concerning
her statutory whistleblowing claim, which was dependent in
part on the judgment for plaintiff on the wrongful-discharge
Or.App. 434] ARMSTRONG, P. J.
Kyle Walker brought claims against defendant Oregon Travel
Information Council (the Council), a semi-independent agency
of the State of Oregon, for common-law wrongful discharge and
statutory "whistle-blowing," ORS
659A.203, arising out of her discharge from a
position as the Council's director. The trial court
allowed plaintiffs wrongful-discharge claim to be submitted
to the jury, which awarded plaintiff damages of $1.2 million.
However, the court rejected plaintiffs claim for statutory
whistleblowing, which was tried to the court. Plaintiff
appeals, assigning error to the trial court's rejection
of the statutory claim. The Council cross-appeals, contending
that the trial court erred in allowing the common-law
wrongful-discharge claim to go to the jury. We conclude that
the trial court did not err in rejecting plaintiffs statutory
claim, but we agree with the Council on its cross-appeal that
the trial court erred in submitting the wrongful-discharge
claim to the jury. We therefore reverse the judgment.
Council, together with the Department of Transportation, is
responsible for the placement and permitting of
tourist-oriented signs along state highways. The Council also
manages, maintains, improves, and develops a number of rest
areas around the state that are owned by the Department of
Transportation and the Department of State Parks and
Recreation. ORS 377.805; ORS 377.841. The Council receives
its funding from sign-permit fees and the State Highway Fund,
as allocated to the Council by the Department of
Transportation. ORS 377.841(6).
Or.App. 435] The Council consists of 11 volunteer members,
including the chairperson of the Oregon Transportation
Commission (or designee) and 10 members appointed by the
Governor from the public at large. ORS 377.835(2)
(2013). The Council's bylaws state that a
quorum of six members is required to transact business. The
Council elects officers (a chair, vice-chair, and secretary)
and is supported by a staff of paid employees, including a
director, who serves at the Council's pleasure and is
charged with "administrative control" of the
Council. ORS 377.835(7).
Council is a "semi-independent" agency. ORS
377.835. It is permitted to develop its own personnel rules
and salary-classification system. The Council is required to
adopt a biennial budget, ORS 291.206(1) (relating to rules
guiding state agencies in preparation of budget requests),
but the budget is not subject to review or approval by the
legislature or to future modification by the Emergency Board
or the legislature, and is exempt from state spending
limitations. ORS 377.840(6). However, the Council must file
an annual report with the Governor, the legislature, and the
Legislative Fiscal Officer, ORS 377.838, and the
Council's finances are subject to annual review by the
Secretary of State. ORS 377.840(7).
Council staff is led by the director. At the relevant time,
ORS 377.835(7) (2013) provided:
"The Council shall be under the administrative control
of a director who is appointed by and who holds office at the
pleasure of the Council. The director of the Council may
appoint all subordinate officers and employees of the Council
and may prescribe their duties and fix their compensation.
The director of the Council may delegate to any subordinate
officer or employee any administrative duty [299 Or.App. 436]
function or power imposed upon the Council by or pursuant to
its bylaws, the volunteer Council is the governing body for
the agency and is responsible for establishing its budget.
The bylaws state that the Council has exclusive authority to
determine the employment status and compensation of the
director, who serves at the pleasure of the Council. The
director, in turn, has the authority to appoint all
subordinate officers and employees and may prescribe their
duties and compensation, within the Council's salary
guidelines. The director may contract with state agencies but
may not, without prior approval of the Council, authorize an
expenditure of funds in excess of $25,000. ORS 377.838.
the Council's bylaws, the executive committee consists of
three elected officers and one other member of the Council.
The executive committee is charged with serving as a resource
to the director and staff on all matters that relate to the
administration of the organization and making recommendations
to the Council. The executive committee is also required to
conduct an annual evaluation of the director. Under the
bylaws, the finance committee consists of one executive
committee member and a minimum of two other council members
and is charged with coordinating with staff to review planned
budgets and financial reporting.
it is largely dispositive of the issues raised on appeal, we
first address the Council's contention raised on
cross-appeal that the trial court erred in allowing
plaintiffs wrongful-discharge claim to be submitted to the
jury. We summarize the undisputed facts from the record.
Council hired plaintiff as the Council's director in
December 2012. The offer of employment stated:
[299 Or.App. 437] "Beginning on December 10, 2012, you
will serve as the CEO/Executive Director of Oregon Travel
Experience. Pursuant to ORS 182.468, this position is an
unclassified executive service position in which you serve at
the pleasure of the Oregon Information Council in an 'at
will' status, with no property interest to this position.
"This is an appointment to a semi-independent agency.
Your gross salary will be paid monthly at $9,585.33 per month
($115,000 annually). Benefits include three weeks paid
vacation, accrued upon execution of this letter for the first
year; vacation will accrue monthly in subsequent years. You
will also receive a comprehensive package of state benefits,
including full coverage health insurance for you and your
family for medical, dental and vision paid by the agency,
excepting adjustable fees that are dependent on your
responses to the PEBB annual [renewal] questionnaire. PEBB
requires employees to contribute 5% toward the cost of health
and dental coverage.
"The executive committee will conduct a performance
review six months after hire; any compensation adjustments
will be made at the first anniversary of your hire."
audit by the Secretary of State the previous year had
directed the Council to develop an employee classification
and salary structure, and plaintiff hired a human resources
director to begin that process. As a semi-independent agency,
the Council was exempt from the personnel policies of the
State of Oregon. The Council expressed to plaintiff its
concern that the current salary structure was "top
heavy" and its desire to stay within its existing
budget. The Council chair told plaintiff that, although the
Department of Administrative Services (DAS)
"Hay" system could be a resource for the
employee handbook and for mapping out positions and salary
ranges, salaries should be kept within the budget that had
been adopted by the Council, with plaintiffs salary at the
top. Almost immediately, conflicts arose between plaintiff
and the Council's executive committee over the salary
recognized that her own salary would be the
"keystone" for the Council's personnel
compensation plan. [299 Or.App. 438] At her six-month review
in June 2013, plaintiff presented the Council with an
analysis comparing her salary to that of directors of other
semi-independent agencies. Plaintiff requested that,
beginning on plaintiffs one-year service date, the Council
establish a director salary aligned with a DAS management
salary range 7-PEMH of $9,955 per month. Plaintiff also
requested a 5 percent ($2,875) retroactive raise to
compensate her for human resources work that she had assumed
during her first six months of employment before the hiring
of a human resources director.
also sought an increase in her sick-leave benefit. Because
she had had only 8.5 days of sick leave available during the
first few months of employment, plaintiff stated that she had
been required to use vacation time for treatment related to
an on-the-job injury. She requested an additional sick-leave
"bank" of 40 hours to offset the loss of vacation
time and for an anticipated medical procedure before the end
of the year.
Council did not approve the additional retroactive pay and
told plaintiff that an adjustment to her salary would be
considered as a part of her year-end review. In its review of
plaintiffs performance, the Council's executive committee
expressed concern over plaintiffs resistance to the executive
committee's "changes in process," her level of
communication with the Council and the executive committee,
her attempts to "over-manage" the executive
committee, and her "over-focus on total compensation
(salary and benefits)." The Council extended plaintiffs
probationary period for an additional six months.
30, 2013, the Council adopted its proposed budget for the
2013-2015 biennium. The budget included a 1.5 percent
cost-of-living increase for employees. The Council directed
plaintiff to present a salary structure to the Council that
was within the Council's existing budget and to seek
Council approval for any classification or pay decisions that
affected the budget. Plaintiff agreed to come back to the
Council before implementing a new salary structure.
and the human resources director continued to analyze
employee positions, including plaintiffs position, [299
Or.App. 439] under the Hay classification system used by DAS
and to develop a compensation plan that aligned with DAS
salaries. The plan, which the human resources director shared
with the Council in December 2013, classified plaintiffs
position as a "Principal Executive Manager ...