Nebraska, like many jurisdictions, provides employees with a common law protection against employment termination in violation of certain public policies. Primarily, these protections allow employees to report violations of the law or engage in conduct where public policy mandates it should be freely allowed, without negative workplace consequences. Key to this doctrine is that no other law or statute provides an adequate remedy. A recent Nebraska Supreme Court case clarifies these principles and provides a good example of when such a claim can or cannot result in recovery for a suing employee.
In February of 2021, York Surgical Associates P.C. (“YSA”) was informed that the Office of the Inspector General (“OIG”) was opening an audit into their billing practices concerning their Medicare patients. YSA employed the Plaintiff, Ms. Dibbern, in an administrative capacity. Ms. Dibbern was tasked with Medicare coding for patient visits or procedures.
For the impending audit, YSA retained three attorneys who worked to determine the likelihood of exposure for the company. A second-phase internal investigation found that 73% of the claims under review by OIG were being ‘upcoded’, which could strongly suggest fraudulent behavior. ‘Upcoding’ is a term for when a medical provider increases the code number in order to receive a larger reimbursement than allowed.
Armed with this information, YSA’s counsel recommended that Ms. Dibbern should be terminated as she was the employee responsible for coding Medicare reimbursements. One of the owners then informed Ms. Dibbern of that recommendation, which she challenged, hoping to remain employed.
After the first phase of the internal investigation, Ms. Dibbern had requested to speak with the OIG investigator, but was denied, with one of YSA’s attorneys citing her demeanor as a primary concern. After the second phase internal investigation, Ms. Dibbern had contacted the OIG investigator directly to be interviewed. Three days later, another physician-owner of YSA instructed Ms. Dibbern that she could either resign or be terminated.
Ms. Dibbern later filed suit for common law ‘wrongful termination of employment in violation of public policy.’ During the course of litigation, Ms. Dibbern claimed that her desire to speak with the OIG investigator was to clear her name and to tell the truth. She further claimed that she was retaliated against for attempting to do so. At trial, the jury awarded monetary damages to Ms. Dibbern for lost past and future wages. YSA filed a motion for judgment notwithstanding a verdict which was denied. YSA then appealed to the Nebraska Supreme Court.
The Nebraska Supreme Court reversed and remanded the case with instructions for a judgment in favor of YSA. In its opinion, the Court clarified how a claim for wrongful termination of employment in violation of public policy can proceed. The underlying rule in Nebraska is that at-will employees can be terminated at any time with or without reason. However, there is a common law exception to this rule where such a termination runs contrary to public policy. In the past the Court has allowed this exception for retaliation for filing of workers’ compensation claims, for reporting criminal activity of employers, and for mandatory reporting. The Court distinguished the case at hand however, from the examples of successful public policy exceptions listed above. In the previous cases, there was no law which enshrined the public policy in question that provided its own remedy. In this case, the Court opined that the False Claims Act (“FCA”) is the statute which provides a remedy for individuals like Ms. Dibbern. The Court noted that that the purpose of the FCA is “to discourage fraud against the government and to encourage those with knowledge of fraud to come forward”. (318 Neb. 928.) Furthermore, the FCA provides a remedy for employees who are harmed by their employers for actions they take “in furtherance of the FCA” (318 Neb. 928.). As such, the FCA provides both the public policy under which Ms. Dibbern was trying to proceed, and a remedy, which she did not claim.
As a result, the Court found that Ms. Dibbern was attempting to invent a common law remedy where a statute already provided one. Citing concerns of duplicative remedies, the Court declined to recognize an additional exception to the general rule for at-will employee termination. The case was remanded with direction to enter judgment in favor of YSA.
ES Law’s employment attorneys keep up on new developments in all aspects of labor and employment and are ready to consult with business owners, HR personnel, and individuals regarding whether there may be valid claims resulting from separation of employment or other adverse action.
*Thank you to ES Law’s law clerk, Charles Leech, for researching and contributing to this article.*