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146157 - Wurtz v Beecher Metropolitan District

Richard L. Wurtz,
     Charles A. Grossmann
(Appeal from Ct of Appeals)
(Genesee – Fullerton, J.)
Beecher Metropolitan District,
Leo McClain, Jacquelin Corlew 
and Sheila Thorn,
Nancy Vayda Dembinski


Richard Wurtz, an attorney, was the administrator of Beecher Metropolitan District, which operates water and sewer utilities for part of Genesee County; a five-member elected board oversees the district. Wurtz’s employment contract, which he drafted, provided that his employment would run from February 1, 2000 to February 1, 2010. The contract stated that Wurtz could only be terminated for cause, but it did not contain a renewal clause. In a deposition he gave after filing this lawsuit, Wurtz conceded that there was nothing in the contract obligating the district to continue employing him after February 1, 2010. The parties do not dispute that Wurtz was employed for the full 10 years, nor do they claim that the contract was violated.

In May 2008, Wurtz sent letters to the county prosecutor, county sheriff, and the Mt. Morris police chief, alleging that district board members Leo McClain, Jacquelin Corlew, and Sheila Thorn had violated the Open Meetings Act by meeting with a labor lawyer. The prosecutor responded that he did not believe that the allegations merited a criminal investigation. At a July 2008 meeting, Wurtz told the board that his benefits had not increased in two or three years, and that he would consider that the board was retaliating against him for his OMA complaint if other employees received an increase. The board passed a resolution adjusting Wurtz’s benefits to be consistent with those given to other employees, but at a public meeting on August 13, 2008, Wurtz stated that, as “an olive branch,” he was releasing the district from any obligations connected with that resolution.

The district was losing money; its accountants recommended that it had to increase revenues, decrease expenses, or both. In January 2009, Wurtz wrote to the board, offering to terminate his 10-year employment contract and become a “contract” employee for less pay. He also recommended that the district extend his employment to August 1, 2012. Ultimately, the board rejected a motion to adopt Wurtz’s proposal, with McClain, Corlew, and Thorn voting against.

In a May 2009 memorandum, Wurtz expressed his reservations concerning the board members’ upcoming trip in June to San Diego for the American Water Works Association conference and the effect on district taxpayers. While he believed that some of the board members’ reimbursement claims were excessive, he paid the bill. But in August, Wurtz met with the sheriff’s office about the board members’ reimbursement claims, leading to a criminal investigation of the board, including McClain, Corlew, and Thorn. (Although the prosecutor pursued charges against them, the trial judge dismissed charges against McClain and a jury returned “not guilty” verdicts in favor of Corlew and Thorn.) Wurtz’s August meeting with the sheriff’s office came in the wake of an aborted July 2009 meeting between Wurtz and the board, in which Wurtz wanted to discuss “mutually discontinuing” their relationship, but refused to meet when he learned that the board’s labor attorney would be present.

At a September 30 board meeting, Wurtz stated that, if the board did not extend his contract, he would consider that the board was retaliating against him for the investigation. At a November 2009 meeting, Thorn moved not to extend Wurtz’s employment contract and to begin a search for a new administrator. The motion passed on a three-to-two vote, with McClain, Corlew, and Thorn supporting the motion.

On January 19, 2010, Wurtz sued the district, McClain, Corlew, and Thorn. He claimed that the board’s decision not to renew his contract was retaliation for his reporting suspected violations of the OMA, the Freedom of Information Act, and other Michigan statutes. The board had violated Michigan’s Whistleblower Protection Act (MCL 15.361 et seq.); moreover, the board’s decision to end his employment amounted to a violation of public policy, Wurtz maintained.

But on the defendants’ motion, the trial court dismissed Wurtz’s claims, holding that, because the board simply allowed Wurtz’s employment contract to expire by its own terms, Wurtz had not suffered an adverse employment action – a requirement for a whistleblower claim. Arguments on the motion for summary disposition were heard on December 6, 2010. The issue appeared to be one of first impression, the trial court observed.

Wurtz appealed, and in a 2-1 published opinion, the Court of Appeals reversed the trial court, remanding the case to the trial court for further proceedings. The Court of Appeals majority held that, by drawing an analogy to federal law under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act, the non-renewal of a contact may qualify as an adverse employment action under the WPA. “Whether non-renewal amounts to an adverse employment action in a particular instance will vary from case to case,” the majority observed. The majority also held that Wurtz was not given sufficient opportunity to develop a record during discovery regarding this question; on remand, the trial court must allow “discovery with regard to whether other employees had their contract renewed, and with regard to what motivated defendants’ decision to not renew plaintiff’s contract in this case.”

The dissenting judge would have held that, as a matter of law, Wurtz had suffered no adverse employment action, and no additional amount of discovery would have helped develop his case. It is undisputed that the contract did not obligate the district to extend Wurtz’s employment, and the parties did not contend that either side violated the contract, the judge reasoned. While federal and state civil rights statutes cover discriminatory pre-employment or failure to hire conduct as actionable, the WPA does not, the dissent noted, so the majority erred in relying on federal civil rights cases.

The defendants appealed, and in an order dated June 5, 2013, the Supreme Court granted leave to appeal. The Court directed the parties to “address: (1) whether the plaintiff suffered an adverse employment action under the Whistleblower Protection Act (WPA), MCL 15.361 et seq., when the defendants declined to renew or extend the plaintiff’s employment contract, which did not contain a renewal clause beyond the expiration of its ten-year term; and (2) whether there was a fair likelihood that additional discovery would have produced evidence creating a genuine issue of material fact, MCR 2.116(C)(10), if the defendants’ motion for summary disposition had not been granted prior to the completion of discovery.”