Harper v. State of Arizona (Arizona Court of Appeals Case No. 1 CA-CV 15-0519, filed 12/27/2016)

In this employment law case, the Arizona Court of Appeals affirmed the Rule 12(b)(6) dismissal of the statutory and common law wrongful termination claims asserted by five former employees of Child Protective Services (CPS) against the State of Arizona. In 2011, CPS had a backlog of “unassigned” reports involving child abuse and neglect. The plaintiffs in this case, who were part of a team CPS assembled to review and dispose of the backlog, developed a protocol to dispose of unassigned reports that included designating some of those reports as “NI” (meaning “not investigated”). Once a report was designated “NI,” it was considered resolved. The plaintiffs, who alleged their superiors directed them to use the “NI” designation, were terminated by the state as part of the fallout from the firestorm of bad press and negative public backlash that ensued when the public learned CPS was using the “NI” designation to dispose of child abuse and neglect reports.

The court of appeals first addressed the former CPS employees’ wrongful termination claim under Arizona’s Employment Protection Act (the “EPA”). The EPA recognizes a claim for wrongful termination when the discharge violates “a statute of this state” or violates public policy as “set forth in or arising out of [a] statute.” A.R.S. § 23-1501(A)(3)(b). The former CPS employees argued they were discharged in violation of public policy as set forth in A.R.S. § 41-742(B)(4)–a statute that lists as one of the general “principles” underlying the Arizona State Personnel System that covered public employees who are adequately performing their jobs should be retained. The former CPS employees alleged it was against public policy to terminate them because they were competently performing their jobs. The court of appeals rejected this argument because it held the former CPS employees were not “covered” employees under the Arizona State Personnel System; each of the former CPS employees had been employed as a supervisor, which made them “uncovered” employees under the State Personnel System’s statutory scheme and rendered them ineligible for the protections provided to covered employees under the State Personnel System. See A.R.S. § 41-742(A)(2)(b).

The former CPS employees also claimed their terminations violated the public policy set forth in A.R.S. § 38-433. That statute makes it a class 2 misdemeanor for a person holding a position of public trust or employment to knowingly fail to perform a duty “which is required of him by law.” The former CPS employees asserted that because they were allegedly directed by their superiors to use the “NI” designation, if they had disobeyed that direction, they would have been guilty of violating A.R.S. § 38-443. The court of appeals rejected this argument, holding no law required CPS, the plaintiffs, or their supervisors to designate abuse and neglect reports as “NI.” Consequently, the court held the former CPS employees would not have violated A.R.S. § 38-443 by refusing to apply the “NI” designation because their supervisors’ orders to use the “NI” designation did not have the force of law.

The former CPS employees next argued the court of appeals “should recognize, as a matter of public policy, that state at-will employees may not be terminated by a public official for the purpose of providing the official political cover for a policy or decision that results in bad press or negative public opinion.” Rejecting this argument, the court of appeals said:

To be clear, Plaintiffs are asking this court to set aside the restrictions of the EPA and create, out of whole cloth, a new common law right protecting at-will employees against such politically expedient discharges. Plaintiffs cite no common law authority providing such a protection to employees. Indeed, we have found no case in Arizona or any other state providing such protection.

Declining to reach the former CPS employees’ argument that the restrictions in the EPA are unconstitutional, the court of appeals held that, even if the EPA had never been passed,”there is no cognizable basis for Plaintiffs’ novel claim.”

To read the court of appeals’ published opinion, click here.