Rickman v. Premera Blue Cross

Ericka Rickman served as director of Ucentris Insured Solutions from August

2004 until her termination in November 2009. Ucentris, a subsidiary ofPremera, is a

general insurance agency that sells a variety of health care insurance plans and risk

management products to individuals and businesses. Two distinct events transpired

relevant to Rickman's termination.

HIPAA Concerns

In mid-September 2009, Rickman learned about a likely merger between

Pacific Benefits Trust (PBT), a large association underwritten by Premera, and

Washington Grocers Trust, another association underwritten by another insurer. As a

result of the potential merger, Premera would lose PBT membership. Rickman

confirmed the merger with Robin Hilleary, director of Premera's small business

group. Rickman informed Hilleary that a Ucentris client asked a Ucentris "[c]aptive

agent"1 to look for non-Premera insurance in light of the merger. Clerk's Papers (CP)

at 187. In response, Hilleary said Premera was putting together a strategy to retain

membership and Rickman should advise Ucentris captive agents not to look

elsewhere for insurance on behalf of clients. Hilleary told Rickman that Pr9mera

planned to use Ucentris captive agents to transfer the memberships of preferred

groups from the merged associations into an association underwritten by Premera. I d.

Rickman had a "gut feeling" the proposed plan involved "risk bucketing," i.e.,

separating riskier policy holders from less risky holders for underwriting, which she

believed might violate HIPAA laws. CP at 271-72, 187. Rickman believed the plan

could disclose private policyholder information. Rickman expressed her concerns to

her supervisor, Rick Grover:

I met with Rick and I said, "Rick, I have a concern about a strategy that may be going on within Premera." I explained I didn't lmow the details other than it had a potential utilization of our agents to move membership[,] and it had HIP AA written all over it. I couldn't say that was illegal because I don't lmow actually what's going to happen, but we did not want to be a part of it.

CP at 271. Rickman suggested to Grover the plan should be reviewed by a superior to

determine its legality. Grover refused, noting that "we don't always tell everything to

[the supervisor]." CP at 188. Rickman told Grover this is the way she had always

done her business, but he said, "Well, there's a new Sheriff in town."2 Id. Later,

Grover forwarded e-mails to Rickman that confirmed Premera was contemplating a

1 Ucentris hires independent contractors, called "captive agents," to sell insurance products offered only by Premera and its subsidiaries. 2 Grover had recently become Rickman's supervisor.

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risk bucketing plan, which Rickman believed would violate HIP AA. Rickman

reported her concerns only to Grover and did not file a complaint with Premera's

compliance and ethics department.

Several days after Rickman voiced her HIP AA concerns to Grover, he

abandoned the risk bucketing plan, reasoning the plan favored Ucentris over

Premera's other distribution channels. Premera's underwriting department later

determined the risk bucketing plan was not illegal. However, in response to

Rickman's interrogatories, Premera answered, "The group quickly determined that

risk bucketing was not a lawful option for that particular situation." CP at 67

(emphasis added).

Conflict of Interest Concerns

Rickman's son, Taylor Vidor, had been a captive agent for Ucentris since 2005,

working as an independent contractor. Before Vidor was retained, Rickman disclosed

her relationship with Vidor to her former supervisor, who approved hiring Vidor.

According to Rickman, her former supervisor said Rickman did not need to make

further disclosures because '"[i]t's not an issue. He's a contractor."' CP at 260.

Rickman also disclosed her relationship to a former employee in human resources, but

the employee never responded, and human resources has no record of the

conversation. Rickman did not otherwise disclose her relationship in her annual

conflict questionnaires, to her new supervisor Grover, or to the compliance and ethics

department. Rickman testified that many other Premera employees have family

members ~ho work for or contract with Premera.

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Rickman v. Premera Blue Cross, 91040-5

In 2008, Rickman approved the promotion of Vidor from a captive agent to a

"[s]ubject [m]atter [e]xpert[]" (SME), at the recommendation of Ucentris managers.

CP at 182-83, 261-62. Vidor received additional compensation as an SME. When

another SME stepped down, Vidor assumed his workload and Rickman approved an

increase in Vidor's commission from 5 to 10 percent, twice the amount some other

SMEs received. Rickman did not consult with Premera or further disclose her

potential conflict of interest.

On September 11, 2009, around the same time Rickman raised her HIPAA

concerns, someone filed an anonymous complaint against Rickman with the

compliance and ethics department, alleging a conflict of interest existed because of

her son's involvement with Ucentris. The complaint highlighted that Rickman had

elevated Vidor to an SME position, that Vidor had input on which captive agents

received leads, and that the general feeling in the office was that befriending Vidor

curried favor with Rickman.

Nancy Ferrara investigated the complaint and ultimately recommended

Rickman be terminated. Ferrara concluded that Rickman's actions created the

appearance of favoritism by condoning familial relationships at Premera and that

Rickman did not properly disclose her relationship to compliance and ethics or human

resources, especially before approving Vidor's SME promotion and increasing his

commission. Ferrara also concluded Rickman exercised poor judgment and showed a

lack of integrity because she was not forthcoming during the investigation. In her

2013 deposition, Ferrara later said she had no knowledge of Rickman's HIPAA

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concerns during the investigation or at the time of her recommendation. Grover stated

he agreed with Ferrara's recommendation, and he terminated Rickman in November

2009. There is some question, however, whether Grover and Ferrara had different

reasons for Rickman's termination.3

Procedural Background

In December 2010, Rickman filed suit against Premera in Snohomish County

Superior Court, alleging Premera had wrongfully discharged her in violation of public

policy. Premera moved for summary judgment, which the trial court granted. The

court found the clarity element of the tort of wrongful discharge was readily

established based on HIPAA and Washington's UHCIA. However, the court ruled

that Rickman failed to identify a genuine issue of material fact existed as to the

jeopardy and absence of justification elements of her claim. As to the jeopardy

element, the court held that Rickman could not establish that other means of

promoting the public policy were inadequate because Premera had a robust internal

reporting system. Relying on Dicomes v. State, 113 Wn.2d 612, 782 P.2d 1002

(1989), the court further held that Rickman acted unreasonably by failing to apprise

herself of the details of the "risk bucketing" plan to determine whether it was in fact

3 Ferrara indicated she believed Rickman was discharged for poor judgment and lack of integrity, not because of a conflict of interest. CP at 115 (Ferrara testified, "[T]he fact that Ms. Rickman did not disclose her son on the conflict of interest was not the reason that she was terminated necessarily. It was really due to judgment and lack of integrity."). Grover indicated Rickman was discharged for the conflict of interest discovered during the investigation and for her lack of disclosure. CP at 83 (Grover testified, "[T]he immediacy of the termination was the conflict of interest.").

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Rickman v. Premera Blue Cross, 91040-5

illegal, and that public policy was not in jeopardy because Premera did not implement

the plan.

As to absence ofjustification, the court found that Ferrara's recommendation to

terminate Rickman was made without knowledge of Rickman's HIP AA concern.

Therefore, the court reasoned Rickman failed to show a genuine issue of fact existed

as to whether she was fired for raising HIP AA concerns. Rickman appealed.

The Court of Appeals affirmed. Rickman, noted at 183 Wn. App. 1015, slip op.

at 15. The court reasoned Rickman failed to satisfy the jeopardy element for two

reasons. First, the court held that Premera's internal reporting "system provided an

available adequate alternative means by which Rickman could have reported her

concerns." Rickman, slip op. at 15. Relying on Cudney v. ALSCO, Inc., 172 Wn.2d

524, 259 P.3d 244 (2011), the court said the jeopardy element is unconcerned with

whether Premera's internal reporting system provided Rickman any remedy for

termination postreporting. Id. at 14. Second, the court held Rickman could not

establish that her alleged whistle-blowing activity was protected because she failed to

report her concerns in a reasonable manner, not having confirmed the facts or

illegality of the plan. The court did not address causation or absence ofjustification.

Rickman petitioned to this court for review, which we granted. Rickman, 182 Wn.2d

1009.

ANALYSIS

Our decisions in the companion cases of Rose and Becker recognize that the

strict adequacy analysis this court has sometimes embraced is inconsistent with the

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history and purpose of the tort of wrongful discharge. Rose v. Anderson & Grain Co.,

No. 90975-0, slip op. at 20 (Wash. Sept. 17, 2015); Becker v. Cmty. Health Sys., Inc.,

No. 90946-6, slip op. at 5 (Wash. Sept. 17, 2015); see, e.g., Thompson v. St. Regis

Paper Co., 102 Wn.2d 219, 232, 685 P.2d 1081 (1984). Those decisions announce a

return to Thompson, in which we adopted the public policy tort in recognition that the

at-will doctrine gives employers potentially "unfettered control of the workplace and,

thus, allows the employer to take unfair advantage of its employees." Thompson, 102

Wn.2d at 226. Thompson observed that allowing an exception to the at-will doctrine

serves to equalize the imbalance of power that exists in an employment relationship.

Id. Our adoption of the common law tort thus signified that the at-will doctrine can

no longer "be used to shield an employer's action which otherwise frustrates a clear

manifestation of public policy." I d. at 231.

Thompson characterized the public policy tort as "narrow," meanmg the

employee has the burden of proving the dismissal violates a clear mandate of public

policy. Id. at 232. This means "a court may not sua sponte manufacture public

policy but rather must rely on that public policy previously manifested in the

constitution, a statute, or a prior court decision." Roberts v. Dudley, 140 Wn.2d

58, 65, 993 P.2d 901 (2000); see also Thompson, 102 Wn.2d at 232 (noting we

determine the public policy from "'the letter or purpose of a constitutional, statutory,

or regulatory provision or scheme'" or "'[p]rior judicial decisions"' (quoting Parnar

v. Americana Hotels, Inc., 65 Haw. 370, 652 P.2d 625, 631 (1982))).

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In the years immediately following Thompson, the tort of wrongful discharge

became the subject of an academic treatise by Professor Henry Perritt. See HENRY H.

PERRITT, JR., WORKPLACE TORTS: RIGHTS AND LIABILITIES§ 3.14, at 75-76 (1991). In

Gardner, we looked to Professor Perritt's treatise to embrace "a more refined"

analysis, in light of the unusual facts of that case. Gardner v. Loomis Armored, Inc.,

128 Wn.2d 931, 940, 913 P.2d 377 (1996). The Perritt test segments its analysis into

four parts: (1) "the existence of a clear public policy (the clarity element)," (2) "that

discouraging the conduct in which the [plaintiff] engaged would jeopardize the public

policy (the jeopardy element)," (3) "that the public-policy-linked conduct caused

the dismissal (the causation element)," and (4) that "[t]he defendant [has not]

offer[ ed] an overriding justification for the dismissal [of the plaintiff] (the absence

ofjustification element)." !d. at 941.

Gardner recognized a plaintiff may prove "jeopardy" either because his or

her conduct directly relates to the public policy or because it was necessary for the

effective enforcement of that policy. !d. at 945; see also Korslund v. DynCorp Tri

Cities Servs., Inc., 156 Wn.2d 168, 193-95, 125 P.3d 119 (2005) (Chambers, J.,

dissenting) (describing Gardner); Cudney, 172 Wn.2d at 540 (Stephens, J.,

dissenting in part) (same). In Rose and Becker, we clarified that the jeopardy

analysis appropriately considers whether available alternative remedies are

intended to be exclusive but does not require an employee to prove that bringing a

tort claim is strictly necessary to vindicate public policy. Rose, slip op. at 14-15,

19-20; Becker, slip op. at 5; see also Wilmot v. Kaiser Alum. & Chem. Corp., 118

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Wn.2d 46, 53-66, 821 P.2d 18 (1981) (analysis focuses on whether the alternate

adequate enforcement mechanism is mandatory or exclusive); Hubbard v. Spokane

County, 146 Wn.2d 699, 717, 50 P.3d 602 (2002) (finding zoning code inadequate

remedy due to its short statute of limitations); Smith v. Bates Tech. Colt., 139

Wn.2d 793, 811, 991 P.2d 1135 (2000) (finding Public Employment Relations

Commission inadequate to vindicate public policy).

The courts below dismissed Rickman's tort claim based on the strict

adequacy standard of proof we abandoned in Rose and Becker. We must now

consider whether her claim survives under the more traditional analysis of

Thompson and Gardner.

Rickman Establishes Genuine Issues of Material Fact as to Jeopardy

"We review de novo a trial court's decision to grant summary judgment."

Lakey v. Puget Sound Energy, Inc., 176 Wn.2d 909, 922, 296 P.3d 860 (2013). We

affirm an order of summary judgment only when there are no genuine issues of

material fact and the moving party is entitled to judgment as a matter of law. See CR

56( c); Qwest Corp. v. City of Bellevue, 161 Wn.2d 353, 358, 166 P.3d 667 (2007).

We review the evidence in the light most favorable to the nonmoving party and draw

all reasonable inferences in that party's favor. CR 56( c); Qwest Corp., 161 Wn.2d at

358.

As noted, a plaintiff establishes the jeopardy prong by demonstrating either

of the following: "his or her conduct was ... [(1)] directly related to the public

policy or [(2)] necessary for effective enforcement." Rose, slip op. at 17. Premera

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asks us to treat its internal code of conduct (Code) the same way we treat statutes

for purposes of the jeopardy analysis. Premera argues the Code's internal

reporting system provides an adequate alternate means to enforce public policy.

We reject Premera's position.

Premera has not presented, nor could we locate, any authority for the

proposition that a private employer's workplace policy should be accorded equal

status to a duly enacted statute. There are obvious differences between internal

self-regulations and a statutorily mandated system for addressing public policy

violations. We reject Premera's argument that its internal reporting system should

be the sole avenue to address violations of public policy in its workplace.

We also reject Premera's argument that HIPAA and Washington's UHCIA

adequately protect public policy. First, Premera does not argue that any available

remedies under the statutes are exclusive. See Rose, slip op. at 20-21; Becker, slip

op. at 5. Second, Rickman claims she helped prevent an illegal risk-bucketing

scheme, not that one occurred in violation of federal and state law. It is not clear

that HIPAA or Washington's UHCIA contemplate remedies where a discharged

employee thwarts an unlawful act. A complaint may be filed with the secretary of

the United States Department of Health & Human Services Office for Civil Rights

when a person believes a covered business is "not complying" with HIP AA. 45

C.P.R. § 160.306(a); see also id. at (b)(2) (complaint must "describe the acts or

omissions believe to be in violation"). Similarly, Washington's UHCIA provides

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enforcement and remedies when a health care provider "has not complied" with the

law. RCW 70.02.170(1 ).

In addition to considering the adequacy of alternate means available to

enforce public policy, the trial court found Rickman could not meet the jeopardy

prong because she did not show her actions were reasonable. The trial court relied

on language in Dicomes that predates Gardner. Premera argues this Dicomes

based analysis is a "threshold assessment" for the tort of wrongful discharge.

Suppl. Br. ofResp't at 7-8. We disagree. Dicomes does not provide a litmus test

for a claim of wrongful discharge. We have never adopted as an element of the

four-part Perritt test, or of wrongful discharge generally, a requirement that the

plaintiff confirm the validity of his or her concerns before taking action.

Instead, the reasonableness of the plaintiffs conduct relates to whether the

plaintiffs conduct furthers public policy goals. See Gardner, 128 Wn.2d at 945

(finding employees must show "they engaged in particular conduct," which

"directly relates to the public policy"); Thompson, 102 Wn.2d at 232 (finding the

employee must demonstrate the dismissal violates a clear mandate of public

policy). This inquiry may be satisfied by showing "the employee sought to further

the public good, and not merely private or proprietary interests." Dicomes, 113

Wn.2d at 620; compare Bennett v. Hardy, 113 Wn.2d 912, 924-25, 784 P.2d 1258

(1990) (allowing a claim when the employee hired an attorney to protect herself from

discrimination, an act for which she was later fired), with Farnam v. CRISTA

Ministries, 116 Wn.2d 659, 672, 807 P.2d 830 (1991) (finding the employee did not

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seek to further the public good because she knew the employer's conduct did not

violate the law).

Rickman has presented sufficient evidence to find she acted in furtherance of

public policy. She believed Premera's risk-bucketing plan would disclose the

private information of policyholders, violating a clear mandate of public policy

under HIP AA. Following Premera's workplace rules, Rickman reported her

concern to her supervisor, Grover. CP at 271, 314 (Premera' s Code expects

associates to report suspected violations of any applicable laws to their

supervisors.). Her supervisor told her to disregard her concerns. Viewing the facts

of this case in the light most favorable to Rickman, she did not act unreasonably or

raise the concerns to benefit her private or proprietary interests. We reverse the

Court of Appeals decision insofar as it affirmed dismissal of Rickman's public

policy tort for failing to establish the jeopardy element.

The Court of Appeals did not address the trial court's separate reason for

granting summary judgment. The trial court agreed with Premera that Rickman

failed to meet her burden of production on the absence of justification element of

her claim. Premera argues there is no genuine issue of material fact that

Rickman's discharge was the result of her conflict of interest or poor judgment

involving her son's position. This argument seems to blend the separate issues of

causation and overriding justification, as it focuses on whether Rickman's HIPAA

concerns were the real reason for her termination.

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We recognize that causation in a wrongful discharge claim is not an all or

nothing proposition. The employee "need not attempt to prove the employer's sole

motivation was retaliation." Wilmot, 118 Wn.2d at 70. Instead, the employee must

produce evidence that the actions in furtherance of public policy were "a cause of

the firing, and [the employee] may do so by circumstantial evidence." !d. This

test asks whether the employee's conduct in furthering a public policy was a

'"substantial"' factor motivating the employer to discharge the employee. Id. at

71.

The "absence of justification" element examines whether the employer can

"offer an overriding justification for the [discharge]," Gardner, 128 Wn.2d at 941

(emphasis omitted), "despite the employee's public-policy-linked conduct," id. at

94 7. Once a plaintiff presents a prima facia case of wrongful discharge in violation

of public policy, the burden of proof shifts to the employer to show the termination

was justified by an overriding consideration. See id. at 947-50; see also Wilmot,

118 Wn.2d at 70 (The employer must "articulate a legitimate nonpretextual

nonretaliatory reason for the discharge."); accord Hubbard, 146 Wn.2d at 718.

The Court of Appeals did not address this argument, having dismissed

Rickman's claim based on its jeopardy analysis. We therefore remand to the Court

of Appeals to consider this alternate ground for the trial court's order of dismissal.

We reverse the Court of Appeals. Consistent with our analysis in Rose and

Becker, the jeopardy element of the tort of wrongful discharge does not require a

Rickman v. Premera Blue Cross, 91040-5

showing of "strict adequacy." Rickman presented sufficient evidence to create a

genuine issue of material fact on the prima facia elements of her claim. We remand for the Court of Appeals to address whether the trial court's order of summary judgment should be affirmed on the alternate ground that Premera met its burden of proof that it had an "overriding justification" for Rickman's discharge.

Plaintiff Erika Rickman brought this suit against her former
employer, Premera Blue Cross, for wrongful discharge in violation of public policy. Rickman alleges she was terminated in retaliation for raising concerns about potential violations of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), Pub. L. No. 104-191, 110 Stat. 1936, and its Washington counterpart, the Uniform Health Care Information Act (UHCIA), ch. 70.02 RCW. The trial court dismissed Rickman's suit on Premera's motion for summary judgment, concluding Rickman could not satisfy the jeopardy element of the tort because Premera's internal reporting system provides an adequate alternative means to promote the public policy.
The Court of Appeals affirmed.