Veronica Hernandez-Nolt v. Washington County

In this wrongful discharge case, plaintiff appeals

the trial court’s judgment in favor of plaintiff’s former

employer, defendant Washington County.1 Plaintiff asserts

that the trial court erred when it granted a directed verdict

to the county based on its conclusion that plaintiff was

not fulfilling an important public duty, which is a required

element of a wrongful discharge claim, when she truthfully

complied with a federal auditor’s request for information

about a federal program managed by the county. The

county defends the trial court’s conclusion, and also proffers

an alternative reason for affirming, arguing that we should

affirm the court’s grant of a directed verdict on the basis

that plaintiff failed to present evidence that she was constructively

discharged by the county because of her compliance

with the federal auditor’s requests. We conclude that

we should affirm based on the alternative reason advanced

by defendant, and do not reach plaintiff’s arguments about

a public duty.

Because this case is on appeal from a grant of

directed verdict to the county, we view the evidence in the

light most favorable to the nonmoving party—in this case,

plaintiff—and give that party the benefit of every reasonable

inference that may be drawn from the evidence. Fang

v. Li, 203 Or App 481, 484, 125 P3d 832 (2005). In taking

that review, we do not weigh conflicting evidence or evaluate

credibility. Id. at 185. A directed verdict is appropriate only

if the defendant was entitled to judgment as a matter of law.

Id. With that standard in mind, we recite the relevant facts

as follows.

In December 1999, the county hired plaintiff as an

occupancy specialist and Family Self-Sufficiency (FSS) coordinator

for its Department of Housing Services (HS). Prior

to that time, plaintiff had worked in other departments

at the county for several years. Plaintiff’s direct supervisor

was Adell Potter, and the assistant director of HS was

1 This appeal is the second time this case is before us. We previously reversed

the trial court’s grant of summary judgment to the county based on the statute of

limitations. Hernandez-Nolt v. Washington County, 259 Or App 630, 636, 315 P3d

428 (2013).

Cite as 283 Or App 633 (2017) 635

Henry Alvarez. Plaintiff was the only FSS coordinator at

HS, but she spent only about 10 percent of her time on FSS

matters, working on issues as they came up. Plaintiff testified

that FSS was not a priority for HS and that she worked

on matters that she was told to work on, primarily section 8

housing cases.

In March 2002, HS was scheduled to have a management

review of section 8 and low rent public housing

programs, including FSS, by the federal Department of

Housing and Urban Development (HUD). A management

review is a regular audit used by HUD to check that HS

is managing the federal programs appropriately. Before the

audit, Alvarez told plaintiff and the other occupancy specialists

that they needed to “clean up the files” and was angry

about the state of the files for the FSS program. During the

audit, the federal auditor, Joy McCray, met with plaintiff

and Potter. During that interview, Potter answered several

questions about plaintiff’s job and in doing so, according to

plaintiff, made three knowing misrepresentations: (1) that

the FSS program had a program coordinating committee;

(2) that plaintiff spent 90 percent of her time on FSS and 10

percent on section 8, and (3) that plaintiff did not do housing

inspections. Plaintiff did not correct those misrepresentations

during the meeting, nor did she subsequently discuss

her concerns with Potter. The next day, plaintiff was out

of the office conducting housing inspections. The day after

that, plaintiff worked in the office and McCray asked plaintiff

how she tracked the FSS program contracts. In reply,

plaintiff printed off an Excel spreadsheet report for McCray

that she personally used to track contracts. Plaintiff also

informed McCray that, although Potter had said plaintiff

did not perform inspections, she had been out the day before

doing inspections.

The HUD audit report revealed with respect to

the FSS program that HS did not have a sufficient number

of FSS participants; of the 76 active participants, 36 had

expired FSS contracts; the FSS coordinator had not recorded

into the database 25 new contracts signed in the last five

months; the FSS program case management responsibilities

were not being accomplished; annual statements reflecting

636 Hernandez-Nolt v. Washington County

the status of FSS escrow accounts were not being timely

mailed to participants; and only one FSS coordinator was

identified when HUD had provided funding for two coordinators.

However, the only corrective action required by

HUD was that HS review all FSS participant files and handle

expired contracts and the respective escrow account as

outlined in the corrective action report.

Following the audit, in early April 2002, Potter met

with plaintiff and told her that the situation was serious

and that plaintiff’s case load would be reduced and that she

would receive help so that the FSS program issues could be

addressed. To do that, some of plaintiff’s caseload had to be

shifted to other staff, which was addressed at the weekly

staff meeting. Plaintiff believed that there was resentment

from the staff about the shifting of plaintiff’s case load and

that Alvarez was “mean” at the meeting. After the meeting,

plaintiff was upset and told Alvarez that he could not speak

to the staff as he did and said that she had given the federal

auditor the report of the FSS contracts. That same day

a series of closed door meetings occurred between Alvarez

and staff members, ending with plaintiff being called in to

talk to Alvarez and Potter. At that time, Alvarez suggested

that plaintiff stay home the next day because she was visibly

upset, which upset plaintiff enough that she began to cry

because she believed she was being required to stay home.

During her day at home, plaintiff wrote a letter to

Alvarez and Potter “to express my concerns about the work

environment as a result of the recent HUD Audit.” In that

letter, plaintiff requested “specific goals to be set and tasks

outlined” to perform her job and prioritize cleanup of the

FSS files. Plaintiff also expressed that the work environment

had “deteriorated” and was “hostile and threatening

at times” and that she felt that Potter had attempted to use

her during the audit to “confirm and corroborate materially

inaccurate information to the auditor.” Specifically, she noted

that Potter had told the auditor that plaintiff provided counseling

and follow-up to FSS participants. She also expressed

that she believed Alvarez was directing comments to her at

the staff meeting when he said something to the effect of not

being able to work with people he did not trust. Plaintiff did

Cite as 283 Or App 633 (2017) 637

not deliver the letter to Alvarez and Potter until two weeks

later, after the work environment failed to improve.

To follow up on plaintiff’s letter, the county’s human

resources department conducted an investigation that

included a series of interviews with HS staff, and an initial

interview with plaintiff, after which plaintiff refused to further

participate in the investigation. After that investigation,

human resources determined that no one at HS gave

intentionally false or misleading information to the federal

auditors and that the work environment was not hostile

toward plaintiff or other staff.

In June 2002, plaintiff attended FSS program

training and earned her certificate. However, Potter did

not allow plaintiff to attend a regional FSS housing meeting

that occurred after the training because plaintiff was

needed in the office. Plaintiff testified that this made her

feel “bad” and that she took it as harassment by Potter.

In August 2002, plaintiff received her overdue

employee evaluation for 2001. Although the review said that

plaintiff met expectations, Potter included a cover letter to

plaintiff that explained that the evaluation, which covered

2001, did not reflect Potter’s current concerns and that a

work plan was being developed to assist plaintiff in improving

her ability to manage a full caseload. Because of the

cover letter, plaintiff did not concur with the evaluation.

Plaintiff believed that her reduced caseload, which occurred

so that she could focus on FSS, was improperly being used

against her to create a performance issue.

Around the same time, Irma Rafaei became plaintiff’s

new direct supervisor. Rafaei would continually badger

plaintiff about cleaning up the FSS files, and, one day, stood

at plaintiff’s cubicle for hours pushing plaintiff through

the entry of information from several files, which plaintiff

called “pure harassment.” Following that incident, plaintiff

wrote another complaint letter addressed to Susan Wilson,

the director of HS, about Rafaei’s conduct and alleging that

“management’s demands continue to promote a hostile work

environment which [sic] unfair and unacceptable and outrageous.”

A week after delivering that letter, Wilson, Alvarez,

638 Hernandez-Nolt v. Washington County

Potter, and Rafaei met with plaintiff. At that meeting,

Wilson explained the chain of command and informed plaintiff

that Rafaei had been giving her one-on-one training. In

August 2002, plaintiff’s attorney also sent the county a tort

claim notice based on the alleged retaliatory conduct plaintiff

was experiencing.

In September 2002, plaintiff was taken off of the

FSS files and was given a full section 8 housing caseload.

Plaintiff saw this as a demotion, even though it did not

affect her classification or pay and did not result in any

formal discipline. Because she was removed from the FSS

program and placed on a work plan, plaintiff “had a severe

meltdown.” From October 2002 to March 2003, plaintiff saw

a psychologist because of her work stress, as well as other

life stressors she was experiencing. Plaintiff did not testify

about, or provide other evidence of, the work conditions she

experienced at HS after she was taken off the FSS program.

In April 2003, plaintiff transferred to the county’s

Department of Aging and Veterans’ Services (DAVS) to get

away from the work environment at HS. Her position at

DAVS was a promotion and included increased pay. To take

the position, plaintiff was required to go on a probationary

status. After four months at DAVS, in August 2003, plaintiff

was terminated from probationary status, after receiving

reprimands for taking extended breaks that were not authorized

and counseling on work performance, and reinstated

to her former position with HS. She was directed to report

to work at HS starting September 3, 2003.

Instead of returning to HS, plaintiff obtained

approval for 12 weeks of Family and Medical Leave Act

(FMLA) leave due to her stress and anxiety. When her FMLA

leave expired on December 23, 2003, plaintiff did not report

for work. As a result, Alvarez sent her a letter in January

2004 informing her that she was absent without authorization

and that, pursuant to county policy, she was considered

to have voluntarily resigned her position. Plaintiff was asked

to provide information about any unavoidable situation that

prevented her from obtaining authorization for her absence,

which would except her from the voluntary resignation rule.

After receiving the letter, plaintiff did not attempt to contact

Cite as 283 Or App 633 (2017) 639

Alvarez and did not return to work at HS. When the county

did not hear from plaintiff, the county’s counsel confirmed

with plaintiff’s counsel that plaintiff would not be returning

to work. After that confirmation, Alvarez sent plaintiff

a final resignation notice that notified plaintiff that her voluntary

resignation was effective December 23, 2003.

Plaintiff admitted that while she was on FMLA

leave she was not experiencing intolerable working conditions,

that nothing that occurred at HS related to her

working conditions at DAVS, and that she did not find out

what her working conditions would be if she returned to

HS. She also did not attempt to apply to work in a different

department at the county after her termination from DAVS.

However, plaintiff testified that she knew she could not go

back to work at HS because Alvarez and Potter were still at

HS and she could not work for them.

Plaintiff filed a wrongful discharge claim against the

county, alleging that the county constructively discharged

her through retaliatory harassment after she refused to

participate in Potter’s material misrepresentations to the

federal auditor. The case went to trial, and, at the close of

plaintiff’s case, the county moved for a directed verdict. The

county argued that it was entitled to a directed verdict for

either of two reasons: (1) plaintiff failed to show that she was

exercising a job-related right or fulfilling an important public

duty when she refused to participate in Potter’s misrepresentations

to the federal auditor; and (2) plaintiff failed to

show that the county constructively discharged her because

of her exercise of the alleged job-related right or public duty.

The trial court granted a directed verdict for the county

based on its conclusion that plaintiff failed to present evidence

that she was exercising a job-related right or fulfilling

an important public duty. The court did not address the

county’s second ground for a directed verdict.

On appeal, plaintiff argues that she was fulfilling

an important public duty, as embodied in federal law

making it a crime to make material misrepresentations to

a federal officer, when she truthfully complied with the federal

auditor’s requests about HS’s management of the FSS

program. The county defends the trial court’s reasoning

640 Hernandez-Nolt v. Washington County

for granting the directed verdict and also asserts that we

should affirm the trial court’s grant of a directed verdict on

the ground that the trial court did not address below—that

plaintiff failed to demonstrate that she was constructively

discharged by the county for fulfilling the important public

duty as alleged by plaintiff.2 For the reasons set out below,

we agree with the county that we should affirm the trial

court because plaintiff failed to present evidence that she

was constructively discharged because she complied with

the auditor’s requests during the federal audit. Because we

affirm on that ground, we do not address plaintiff’s argument

on appeal regarding whether plaintiff was fulfilling an

important public duty when she complied with the auditor’s

requests during the federal audit.

The general rule in Oregon is that employment is “at

will,” which means that, “absent a contractual, statutory, or

constitutional requirement to the contrary, an employee may

be terminated without notice and for any reason.” Nkrumah

v. City of Portland, 261 Or App 365, 372, 323 P3d 453 (2014).

However, Oregon has recognized that employers may be liable

in tort to an employee for a discharge under “ ‘circumstances

in which an employer discharges an employee for

such a socially undesirable motive that the employer must

respond in damages for any injury done.’ ” Id. (quoting

Lamson v. Crater Lake Motors, Inc., 346 Or 628, 635, 216

P3d 852 (2009)). Those circumstances include “when the

2 In effect, the county’s argument presents an alternative basis for us to

affirm based on the “right for the wrong reason” principle. As a matter of our

discretion, we may affirm a trial court’s ruling on a basis that was argued by

the parties below but that was not relied upon by the court. Clemente v. State

of Oregon, 227 Or App 434, 440, 206 P3d 249 (2009). We may affirm on such

an alternative basis, however, only when (1) “the facts of record [are] sufficient

to support the alternative basis for affirmance”; (2) “the trial court’s ruling [is]

consistent with the view of the evidence under the alternative basis for affirmance”;

and (3) “the record materially [is] the same one that would have been

developed had the prevailing party raised the alternative basis for affirmance

below.” Outdoor Media Dimensions Inc. v. State of Oregon, 331 Or 634, 659-60, 20

P3d 180 (2001).

In this case, we conclude that we should exercise our discretion to affirm on

the alternative basis argued by the county. The parties litigated the issue below

and made arguments to the trial court in the context of the county’s directed verdict

motion made at the close of plaintiff’s case. Although the court did not grant

the directed verdict on that basis, the record is materially the same as it would

have been if the trial court had ruled on that basis.

Cite as 283 Or App 633 (2017) 641

discharge is for exercising a job-related right that reflects

an important public policy” or “when the discharge is for fulfilling

some important public duty.” Babick v. Oregon Arena

Corp., 333 Or 401, 407, 40 P3d 1059 (2002).

When, as here, the employee was not discharged but

effected a voluntary resignation, the plaintiff must establish

that he or she was constructively discharged.

“[T]o establish a constructive discharge, a plaintiff must

allege and prove that (1) the employer intentionally created

or intentionally maintained specified working condition(

s); (2) those working conditions were so intolerable

that a reasonable person in the employee’s position would

have resigned because of them; (3) the employer desired to

cause the employee to leave employment as a result of those

working conditions or knew that the employee was certain,

or substantially certain, to leave employment as a result of

those working conditions; and (4) the employee did leave

the employment as a result of those working conditions.”

McGanty v. Staudenraus, 321 Or 532, 557, 901 P2d 841

(1995) (emphasis in original; footnotes omitted). With regard

to the second requirement, the Supreme Court explained in

McGanty that

“[a]n objective test preserves the requirement that there

be a discharge, before there can be a wrongful discharge.

If an employee chooses to quit because of objectively tolerable

working conditions, it cannot be fairly said that the

employer has induced the employee to resign rather than

be fired. Objectively tolerable working conditions simply

are not an inducement to resign.”

Id. at 556 (emphasis in original; citation, internal quotation

marks, and brackets omitted). A constructive discharge is

not, in and of itself, a tort; rather, “it is simply an alternate

means of establishing the element of discharge in a claim

for wrongful discharge.” Handam v. Wilsonville Holiday

Partners, LLC, 225 Or App 442, 447, 201 P3d 920 (2009),

vac’d and rem’d, 347 Or 533, 225 P3d 43, adh’d to on remand,

235 Or App 688, 234 P3d 133, rev den, 349 Or 171 (2010).

For that discharge to be wrongful, the plaintiff must still

establish that the employer’s motive for the constructive discharge

was the plaintiff’s exercise of a job-related right or

an important public duty. Id.

642 Hernandez-Nolt v. Washington County

Plaintiff argues that she met the constructive discharge

test because she showed that (1) her working conditions

became immediately hostile following the federal

audit, including being asked to stay home from work, being

harassed by her new supervisor Rafaei, and being the target

of “derogatory” remarks by Alvarez, (2) management took

no corrective action after plaintiff informed it of the hostile

environment, and (3) plaintiff transferred to DAVS as

a result of that hostile environment and then took FMLA

leave to avoid returning to it.

Granting plaintiff those argued-for inferences, we

conclude that plaintiff did not present any evidence at trial

from which a trier of fact could reasonably infer she was

constructively discharged by the county in December 2003

because of her conduct during the federal audit of HS in

March 2002. The only evidence of a hostile work environment

that plaintiff presented occurred immediately after

the federal audit and ended in September 2002 when plaintiff

was taken off of the FSS case files. Plaintiff did not testify

about any intolerable conditions at HS that occurred

between September 2002 and April 2003 when she transferred

to DAVS. Plaintiff was not experiencing the hostile

work environment she claimed existed at HS during her

four months at DAVS and during her three months of FMLA

leave. However, upon her termination from DAVS, plaintiff

neither found out what her working conditions would be if

she returned to HS, nor did she attempt to apply to work in

a different county or department. The only evidence plaintiff

presented about the objective working conditions at HS in

December 2003, when she resigned, was that Alvarez and

Potter still worked there.

Giving plaintiff the benefit of all reasonable inferences

from the evidence, as we must, the only inference that

the record reasonably permits is that, when plaintiff resigned

from the county in December 2003, she subjectively believed

that she could never work with Alvarez and Potter again.

However, plaintiff presented no evidence from which any

reasonable inference could be made about plaintiff’s objective

work conditions at HS in December 2003. Plaintiff did

not present evidence of the work conditions that she experienced

during the seven months prior to her departure from

Cite as 283 Or App 633 (2017) 643

HS in April 2003 (or why they were intolerable), or evidence

about what her work conditions would be if she returned to

HS in December 2003. See Doe v. Denny’s, Inc., 327 Or 354,

360, 963 P2d 650 (1998) (holding that the plaintiff’s wrongful

discharge claim failed because “she cannot identify any

act or statement by her employer that created or maintained

an intolerable working condition that she would be forced

to endure if she remained on the job”). In sum, plaintiff did

not present any evidence that she was discharged by the

county in December 2003—that is, plaintiff presented no

evidence from which a reasonable inference could be drawn

that Alvarez or Potter were intentionally creating or maintaining

an objectively intolerable work environment at HS in

December 2003—or that plaintiff resigned from the county

as a result of that environment at HS. McGanty, 321 Or at

556 (a claim of wrongful discharge requires “that there be a

discharge, before there can be a wrongful discharge”).

It was plaintiff’s burden to present sufficient evidence

on that issue such that a reasonable factfinder could

find in her favor and, on this record, she did not. Accordingly,

we conclude that the trial court did not err in granting a

directed verdict for the county.

Affirmed.