Haggerty v. Hathaway, No. 435-12-12 Bncv (Howard, J., Mar. 8, 2013)

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                                                VERMONT SUPERIOR COURT

SUPERIOR COURT                                                                                         CIVIL DIVISION
Bennington Unit                                                                                        Docket No. 435-12-12 Bncv


Leo Haggerty
Plaintiff

v.

William Hathaway, Brenda Hathaway, and
Town of Bennington Rescue Squad, Inc.
Defendants



                                       Decision and Order Re: Motion to Dismiss

                                                            Procedural History

       Defendant Rescue Squad filed a motion to dismiss on December 31, 2012. Plaintiff
opposed the motion to dismiss on February 1, 2013. The Rescue Squad responded to the
opposition on February 11, 2013.

                                                           Factual Background

       The facts as alleged by plaintiff and if proven would be that Leo Haggerty, Plaintiff, was
employed with the Town of Bennington Rescue Squad as a driver and emergency medical
technician. On February 1, 2011, Plaintiff went to the Southwestern Vermont Medical Center
(SVMC) because of chest pains. Brenda Hathaway worked at as a nurse at SVMC and for the
Rescue Squad. On February 2, 2011, Brenda Hathaway accessed Plaintiff’s private medical
information in violation of the Health Insurance Portability and Accountability Act (HIPPA). On
February 9, 2011, Plaintiff filed a formal complaint against Brenda Hathaway with SVMC.
SVMC later reprimanded Brenda Hathaway for violating HIPAA.

        On February 10, 2011, the Rescue Squad removed Plaintiff from their normal schedule.
William Hathaway, the executive director of the Rescue Squad, later terminated Plaintiff’s
employment. In a letter dated April 22, 2011, William Hathaway informed Plaintiff he was
terminating his employment for driving too quickly and filing a HIPAA complaint against a
Rescue Squad employee. Plaintiff sues Defendants for wrongful termination and tortious
interference with contractual relations.
                                               Standard of Review

        The Court disfavors and rarely grants motions to dismiss. See Bock v. Gold, 2008 VT
81, ¶ 4, 184 Vt. 575. The Court uses motions to dismiss to evaluate the law in a pleading. Powers
v. Office of Child Support, 173 Vt. 390, 395 (2002). Accordingly, the Court will only grant a
motion to dismiss when there are “no facts or circumstances, consistent with the complaint that
would entitle Plaintiff to relief.” Bock, 2008 VT 81, ¶ 4. “[T]he threshold a Plaintiff must cross
in order to meet our notice-pleading standard is ‘exceeding low.’” Id. (quoting Henninger v.
Pinellas County, 7 F. Supp. 2d 1334, 1336 (M.D. Fla. 1998)). For this motion, the Court assumes
the truth of all facts offered by the non-moving party. Id. at ¶ 4.

                                           Analysis and Conclusions

        The issue is whether the plaintiff can plead grounds for wrongful termination based on
retaliatory firing for reporting a HIPAA violation.1 In Vermont, a plaintiff may sue for a
discharge in violation of public policy. See Adams v. Green Mountain R.R. Co., 2004 VT 75, ¶ 5,
177 Vt. 521. The public policy exception applies to more policies than those defined by the
legislature. Id. Public policy includes “community common sense and common conscience,
extended and applied through the state to matters of public morals, public health, public safety,
public welfare, and the like.” Id. (internal quotations omitted). The Vermont Supreme Court has
not ruled on whether reporting a HIPAA violation is protected by public policy.

        The majority of courts that have addressed this issue conclude reporting a HIPAA
violation is protected by public policy. See, e.g., Glandon v. Keokuk Cnty. Health Ctr., 408
F.Supp.2d 759, 770–71 (S.D. Iowa 2005); Wallace v. Mantych Metalworking, 2010-Ohio-3765,
937 N.E.2d 177, at ¶¶ 41–46 (Ohio Ct. App. 2010); Wisdom v. Wellmont Health Sys., No.
E2010-00716-COA-R9-CV, 2010 WL 5093867, *5 (Tenn. Ct. App. Dec. 10, 2010). The Ohio
Court of Appeals held: “[a]n employer that violated an employee’s right to keep his medical
information confidential and fires the employee when he discovers the violation jeopardizes the
public policy favoring confidentiality.” Wallace, 2010-Ohio-3765, ¶ 44. Similarly, the
Tennessee Court of Appeals denied summary judgment on a wrongful termination claim where
“plaintiff has shown that she spoke out at a meeting with the state inspector about violations of
HIPAA (clear statutory provisions involving patient privacy rights), which had occurred at the
hospital, and she was fired within two days.” Wisdom, 2010 WL 5093867, *5. The Western
District of Missouri also rejected a defendant’s argument that reporting HIPAA violations was
not protected by public policy because HIPAA did not create a private right of action. See
Kusgen v. Lake Reg’l Health Sys., No. 2:11-CV-4255-FJG, 2012 WL 2119975, *2 (W.D. Mo.
June 11, 2012).

        In contrast, a minority of courts bar claims for wrongful termination based on retaliation
for reporting a HIPAA violation. See McComb v. Morgan Stanley & Co., No. 07-1049, 2008 WL
942796, * 4 (W.D. Pa. April 7, 2009). The Western District of Pennsylvania addressed this
question and granted summary judgment to the defendant because the plaintiff “fail[ed] to refer

1
 Plaintiff argued whether Plaintiff was an at-will employee is a disputed material fact. The Court finds this dispute
immaterial for the purpose of this motion. If Plaintiff had an employment agreement that required dismissal for
cause, then he would still be protected from a discharge that violated public policy.

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us to any specific statute, constitutional premise, or decision from this Court to support his
position.” Id. The court offered little reasoning for its conclusion.

         In this case, the Court finds reporting a HIPAA violation is protected by public policy.
The Vermont Supreme Court directs us to protect the common conscience, public health, and
public morals by common sense. See Adams, 2004 VT 75, ¶ 5. Society goes to great lengths to
protect the privacy and confidentiality of medical records. In addition to HIPAA, Vermont also
recognizes an individual’s privilege to prevent the dissemination of personal medical information
in court proceedings. See V.R.E. 503; 18 V.S.A. § 1852(a)(7) (Patients’ Bill of Rights for
confidentiality of records). Ensuring individuals can exercise these rights without fearing
retaliation falls under protecting the common conscience. Accordingly, the Court sides with the
majority of other courts and finds retaliation for reporting a HIPAA violation can support a claim
for wrongful termination.2

       The Court finds the alleged facts, if proven, could lead a jury to find in favor of Plaintiff.
See Bock, 2008 VT 81, ¶ 4. Accordingly, the Court must deny the motion to dismiss.

                                                       Order

         The Court denies Defendant’s motion to dismiss (Motion No. 2).

Dated at Bennington, Vermont on March _____________, 2013



Superior Judge David Howard




2
  The Court also rejects a possible distinction between reporting HIPAA violations of one’s own rights versus the
rights of a third-party. As far as the Court can determine, only one case has made this distinction and that court gave
little reasoning. See Norton v. N.Y. State Dep’t of Corr. Servs., No. 12-Civ-1263 (CM), 2012 WL 5873644, *7
(S.D.N.Y. Nov. 19, 2012) (“Obviously, if the facts are as Defendants insist, Plaintiff’s interest was entirely personal
and hence not protected…”). On the other hand, courts in Ohio and Connecticut suggest the distinction is
unimportant. See Russo v. Healthwise Med. Assocs., 42 Conn. L. Rptr. 343 (Conn. Super. Ct. 2006); Wallace, 2010-
Ohio-3765, ¶¶ 41–46. The Court finds the reasons for protecting reporting HIPAA violations apply with the same
force regardless of whether the employee reports violations of the employee’s rights or of a third-party’s rights.

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