Employment – Public Employee – Wrongful Discharge – Bowman

A Warren County fraud investigator for a local services department can sue her employer for wrongful discharge under a Bowman exception to the employment-at-will doctrine, based on allegations that her employer prevented her investigation of fraud cases and her cooperation with the prosecutor, and that her grand jury appearance contributed to her termination.

I sustain this demurrer as to count 1 brought under the Virginia Fraud Against Taxpayers Act. Defendant Ronald King was not plaintiff Judith McCloskey’s employer, and I believe Va. Code § 8.01-216.8 contemplates that any suit thereunder would be brought against an employer.
I overrule the demurrer to the extent it avers that a wrongful discharge claim cannot be brought against managing employees in addition to the employer itself. This claim sounds in tort and not in contract, and McCloskey can sue the managing employee who discharged her.

The seminal case here is Bowman v. State Bank of Keysville. Bowman and it progeny have identified three types of exceptions to the employment at will doctrine.

Type I arises when an employer violates a policy that enables the exercise of an employee’s statutorily created right. In this case, as an investigator in the fraud unit of DSS, McCloskey had the duty to investigate allegations of fraud, and once the commonwealth’s attorney is involved, to assist him in the prosecution of welfare fraud, Va. Code § 63.2-526(C). The duty to report alleged violations to the prosecutor rests upon the director. (The question remains whether the director has discretion as to which cases to report. It is arguable he does not. The last cited statute seemingly places the discretion as to which cases to prosecute on the commonwealth’s attorney. This would be in keeping with the way criminal prosecutions are ordinarily handled. I need not address the issue here.) I do not believe the allegations in the complaint here are within the Type I exception to the extent McCloskey claims she was fired because she insisted on reporting instances of welfare fraud to the commonwealth’s attorney.

However, plaintiff also alleges King inhibited or prevented her investigation of fraud cases and her cooperation with the commonwealth’s attorney in the prosecution of same and that her insistence on doing these things contributed to her termination. She also alleges her appearance before the grand jury contributed to her termination. The courts have viewed an employee’s statutory obligation the same as an employee’s statutory right. Plaintiff, as a fraud investigator, had an obligation to investigate fraud cases and to assist the prosecutor in the prosecution of those cases. She also would have had an obligation to testify before the grand jury if subpoenaed to do so as provided under Va. Code § 19.2-201 or § 19.2-208. To the extent plaintiff alleges her termination resulted from her carrying out these obligations, I believe she makes out a claim under this Type I exception to the employment at will doctrine. The summary judgment motion is denied in this respect.

The Type II exception comes into play when there is a public policy explicitly expressed in the statute and the employee was clearly a member of that class of persons directly entitled the protection enunciated by the public policy. In this case, I do find an underlying public policy designed to protect the “welfare of the people” in that it ultimately serves to prevent the depletion of governmental funds allocated to welfare programs by criminalizing fraudulent conduct that diverts those funds to person who are not entitled to assistance. I do not believe, however, that plaintiff falls within the class of persons protected by this public policy and the court sustains the demurrer and grants summary judgment to defendant.

Finally, the Type III exception, as in Mitchem v. Counts, 259 Va. 179 (2000), does not apply. There is no allegation that plaintiff was terminated for refusal to engage in criminal misconduct.

Plaintiff is allowed to go forward on count II under the Type II exception, subject to the limitations stated her.

McCloskey v. Warren County Dep’t of Social Servs. (Hupp, J.) No. CL 09000097-00, July 15, 2010; Warren County Cir.Ct.; Timothy E. Cupp, Jim H. Guynn Jr.; Blair D. Mitchell, Warren County Att’y. VLW 010-8-164, 4 pp.