Supreme Court reverses Fifth District to toss retaliatory discharge case against soybean company

Three former employees of a soybean supply company failed to prove they were fired in retaliation for providing information that led to a state investigation into underweight seed bags, the Illinois Supreme Court held Thursday.

In their 10-page opinion, the justices unanimously reversed the 2011 ruling of the Fifth District Appellate Court to affirm now-retired Washington County Judge Dennis Hatch’s dismissal of the retaliatory discharge lawsuit Wayne Michael, Alan Hohman and Craig Kluemke brought against Precision Alliance Group.

The Supreme Court explained the appeals panel erred in relying on one aspect of the circuit court’s ruling to reverse and remand for a determination on damages while ignoring his final decision in favor of the agricultural supply business with several facilities in the Midwest, including one in Nashville.

“For reasons that are unclear, the circuit court simply applied the wrong standard in this case,” Justice Ann Burke wrote for the high court, noting the appellate court’s reliance on that aspect – a finding of a “causal nexus” between the plaintiffs’ firings and the protected activity of blowing the whistle on the alleged wrongdoing stemming from the underweight bags– was therefore misplaced.

Hatch, following a bench trial, determined there was a causal nexus in the case under a test used for federal employment discrimination­­, but Burke said the state high court has “explicitly rejected” that three-part test as the standard for retaliatory discharge cases.

And even though he found a causal nexus in this case, Burke stressed Hatch ultimately found Precision Alliance Group had presented valid reasons for firing the plaintiffs and properly dismissed their lawsuit, one part of the lower court ruling she said the appeals panel– Justices Judy Cates and Richard Goldenhersh and now retired-Justice James M. Wexstten – “incorrectly ignored.”

“[W]e conclude that plaintiffs failed to prove the element of causation and, therefore, the circuit court correctly determined plaintiffs failed to prove a cause of action for retaliatory discharge,” Burke wrote. “Accordingly, we find that the circuit court properly entered judgment in favor of defendants and the appellate court erred in reversing that judgment.”

The Supreme Court heard arguments in this case– Wayne Michael, et al, v. Precision Alliance Group LLC – in September, when Julie L. Gotschall of Katten Muchin Rosenman in Chicago argued on behalf of Precision and successfully asked the justices to reverse the Fifth District and reinstate Hatch’s dismissal of the lawsuit.

Ferne P. Wolf of Sowers & Wolf in St. Louis represented the three plaintiffs in arguments. Her clients worked at Precision’s Nashville plant from 1998 to 2003. Hohman worked on the bagging line, Kluemke worked in the bagging room and warehouse and Michael worked in the warehouse and in shipping.

In late 2002, according to Burke’s opinion, Precision started experiencing a problem with underweight seed bags, an issue of importance to agricultural supply companies as Illinois law requires seed bags to be labeled by weight and for bags to actually weigh that amount.

In January 2003, Shawn Dudley, a Precision employee who worked on the bagging line, was fired “for engaging in horseplay,” the opinion states, noting he had tampered with a forklift by putting a block of sticky notes on the brake so it wouldn’t move when turned on.

Dudley allegedly said he would report the underweight bag problems if his application for unemployment benefits was denied. It was, and he then apparently got Hohman, Kluemke and Michael to help by secretly weighing bags and providing him with the details.

He turned the information over to a bureau of the Illinois Department of Agriculture, which showed up at Precision’s Nashville facility in February 2003 to investigate a complaint of underweight bags. It found underweight bags and issued stop sale orders, but ended its investigation without handing down any fines of penalties.

During the inspection, the opinion states, Matt Alcorn, the assistant plant manager, opened his own investigation into who had complained as the state department would not reveal who made the complaint. He ultimately concluded it must have been made by a current or former employee,

In March 2003, Hohman, like Dudley, was fired for engaging in horseplay with a company forklift. That same month, Precision’s corporate office eliminated 22 positions, including four at the Nashville plant, leading to the terminations of Kluemke and Michael.

Alcorn testified that among other reasons, he chose to dismiss Michael because he stood around talking too much and Kluemke had a bad attitude. Alcorn and other management staff claimed they didn’t know Michael or Kluemke had a role in the underweight bags complaint and only learned about their involvement during discovery in the case.

In its analysis, the Supreme Court explained that case law shows retaliatory discharge actions are typically allowed in two situations: where an employee is fired over claims for workers’ compensation benefits or in retaliation for whistleblowing.

To sustain such actions, Burke said an employee in either setting must prove, among other factors, a causal relationship between his or her activities and firing. The issue in deciding causation in retaliatory discharge case boils down to the employer’s motive in firing the employee, but employers are not required to provide their reasoning.

“If an employer provides a reason for the employee’s dismissal, that does not automatically defeat a retaliatory discharge claim,” Burke wrote, stressing that “the burden rests on plaintiff to prove each of the elements of the cause of action.”

In its ruling, the Supreme Court agreed with Precision that “the appellate court improperly relieved plaintiffs of their burden to establish their case” by reasoning that causation had been proved via the circuit judge’s causal nexus finding.

“The appellate court here misapprehended the significance of the circuit court’s finding of a ‘causal nexus’ and incorrectly ignored the circuit court’s ultimate determination that defendant presented valid, nonretaliatory, nonpretextual reasons for discharging plaintiffs,” Burke wrote.